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How Wood Demand from Bioenergy Affects Forecasted Pulpwood Prices in the South

This post includes an excerpt from the feature article in the September/October edition of Wood Bioenergy US (WBUS) written by Brooks Mendell and Amanda Lang. The article illustrates the incremental impact of wood bioenergy markets and the critical impacts of project-specific assumptions.

Every six months, Forisk analyzes the relationships between state-specific timber prices, wood demand, end product production and select macroeconomic variables to update the Forisk Forecast models. These relationships provide a means for ranking local timber or wood markets based on where prices or wood costs respond “faster” or “slower” due to changes in housing, local competition, local mill efficiency and local forest supplies.  A key driver of pine pulpwood prices remains the project and market-specific assumptions related to wood bioenergy.

The Forisk Forecast models total pine pulpwood demand from three categories:

  1. Paper and paperboard, which includes all paper, containerboard and cardboard types produced in the U.S.
  2. Oriented strand board (OSB), which tracks increased production of a key building product tied to housing markets.
  3. Wood use for bioenergy, which includes current demand from open and operating facilities, as well as projected use from Forisk’s screening of all announced wood bioenergy projects in the U.S.


On average for the U.S. South, 71% of the increase in pine pulpwood stumpage prices is associated with increased demand from viable wood bioenergy projects (Figure 1).  Pine pulpwood demand from bioenergy is projected to increase by 302% in the U.S. South by 2023 while average pine pulpwood prices are projected to increase 32%.  At the state-level across 11 states pine pulpwood stumpage prices are projected to increase anywhere from 1% to 100%.

20141020 ppw prices

WBUS Market Update:  As of October 2014, WBUS counts 460 announced and operating wood bioenergy projects in the U.S. with total, potential wood use of 137.2 million tons per year by 2023.  Based on Forisk analysis, 301 projects representing potential wood use of 88.4 million tons per year pass basic viability screening.  To download the free WBUS summary, click here.

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