This is the third in a series related to Forisk’s Q2 2015 forest industry analysis and timber price forecasts for the United States.

Before studying trends and projecting forward, we look back and evaluate the performance of previous forecasts and earlier models. How are Forisk’s 2015 forecasts from January tracking relative to 2015 actuals as of Q1? So far, YTD actuals through Q1 lagged Forisk projections across the board, driven by slower-than-estimated increases in housing starts and the associated lower levels of wood demand and lumber production. Annualized, actual housing starts came in at 856,000, or 27% below the 2015 outlook as of January. Since Q1 housing starts tend to be “light” due to the weather, we can compare the January outlook to the Census’ seasonally adjusted figure of 1.04 million, which still falls nearly 12% below the 1.18 million projection. Previously, we posted a revised housing starts outlook for 2015 of 1.13 million.

With respect to pine stumpage prices in the U.S. South, actual Q1 prices for sawtimber and chip-n-saw lagged Forisk’s 2015 projections by ~5% each while pulpwood tracks 10% below the 2015 forecast so far. Analyses of eleven individual state-by-state forecasts relative to Timber Mart-South actuals shows that Forisk 2015 projections are, on average so far, $0.68 per ton higher than the actual pine sawtimber prices and $0.08 per ton higher than the actual pine chip-n-saw prices as of Q1 2015.  For pine pulpwood, Forisk’s 2015 estimates for eleven state-level prices differed by $0.48 per ton on average as of Q1.

For the Pacific Northwest, delivered softwood prices reported by Wood Resources International and the Oregon Department of Forestry were 12% lower than Forisk 2015 projections so far for domestic #2 delivered Douglas-fir along the Oregon/Washington coast, and 8% lower for domestic #2 delivered hemlock logs for the same region. Across categories in Oregon and Washington, Forisk 2015 projections tracked $64.87 per MBF above Q1 actuals.

 

To learn more about the Forisk Research Quarterly (FRQ), click here or contact Brooks Mendell at bmendell@forisk.com, 770.725.8447.