In the forest industry, we study timber markets and the underlying data to understand relationships and risks. For timberland investing and the procurement of wood, systematic frameworks and proven processes help us analyze and compare markets and wood baskets to make operational and capital allocation decisions. This reflects our priority at Forisk: to deliver decision-relevant research, education, and client support.

Customizing Forecasts

Recently, our team completed a localized analysis of county-level growth-to-drains across the U.S. South. Growth-to-drain analysis compares the annual growth of timber to annual harvest volumes to provide a measure of market demand relative to supply. This type of research provides a means for ranking and stacking timber markets, while accounting for key risks to timberland investors and wood consumers. It also supports our ability to deliver on-demand Custom Market Forecasts for clients seeking to track and evaluate specific timber markets.

Most day-to-day decisions in the forestry industry affect operational activities and tactical moves required to run businesses and lead teams. However, a small number of choices related to strategy and capital deployment set in motion investments that commit the firm for years and decades. Where do we prioritize our timberland acquisition activities? Where do we add, buy, or upgrade our wood-using capacity? Custom Market Forecasts also help answer these types of questions.

Timber Market Analysis

Our Timber Market Analysis (TMA) class teaches a process and set of tools for those looking to engage with the data more directly. The philosopher Seneca said, “Without a ruler to do it against, you can’t make crooked straight.” We need useful frameworks, benchmarks, and values against which to test ideas and make decisions.

When analyzing timber markets and wood baskets for forest industry, bioenergy, and timberland investments, a key topic is the “riskiness” and viability of nearby wood-using facilities. Timberland investors want to confirm that announced mills get built and existing mills remain open. Procurement managers want to assess the health of current and potential competitors for wood raw materials. And new wood-using projects – such as greenfield sawmills or bioenergy projects – want to confirm the health and sustainability of local timber supplies, labor pools, and markets for residuals. At the end of the day, the health of local wood demand drives metrics associated with forest sustainability and investment returns.

The TMA process prioritizes questions, aggregates data, conducts analysis and communicates results and recommendations. This process has evolved through hundreds of engagements and dozens of research studies focused on breaking down local wood baskets and timber markets for a range of questions. It relies on available inputs and consistently applied analytical frameworks.

This post includes themes covered in the (virtual) “Timber Market Analysis” course on October 16^th and 17^th, whichwalks through a process to track and analyze the price, demand, supply, and competitive dynamics of local timber markets and wood baskets. Early registration ends October 2^nd. For more information, click here.