Each quarter in our Forisk Research Quarterly (FRQ), we review our forecast performance over the past five years against actual outcomes. This forecast scorecard allows both our clients and us to understand our historical performance, which helps inform our future outlook. Our forecasts are simplified representations of a complex industry. Real-world results naturally differ from our expectations. To acknowledge this uncertainty, we use scenarios that provide alternatives to our Base Case (our most likely view of the future).

2024 Forecast Review

Now that the full-year 2024 industry and price data are finalized, we have an opportunity to review the price outlooks from the last seven years to see how our expectations for 2024 evolved.

Southern sawtimber prices consistently fell short of expectations due to continued increases in timber supply. While we adjusted forecast models over the past decade to reflect evolving market conditions, even our most pessimistic estimates for southern pine sawtimber prices exceeded the 2024 actuals. Last year, according to Timber Mart South, pine sawtimber prices across the South averaged $26.43, representing an 8% total increase over seven years. Prior to the pandemic in 2020, our forecasts anticipated higher housing and lumber consumption by 2024, which would have supported increased southern timber prices. Since 2021, our “Slow Case” (low) forecasts moved closer to the actual 2024 prices (Figure 1). Over the past seven years, our lowest scenario forecast for 2024 never deviated more than 7% from the actual price.

In the Pacific Northwest, sawlog prices are typically more volatile than in the U.S. South. Since 2015, the year-over-year change in delivered prices for Washington #2 Douglas-fir sawlogs ranged from $7/MBF to $134/MBF. Last year, according to the Washington Log Market Report, the average price was $710/MBF. Interestingly, our forecast range for 2024 Washington sawlog prices included $710/MBF in all but two of the last seven years (Figure 2). Both our forecast from last year and the one from six years ago anticipated higher 2024 prices, even in our more conservative scenario. Notably, from 2020 through 2022, Forisk’s Base Case 2024 price forecast was within 5% of the actual price.

 

To learn more about the Forisk Research Quarterly (FRQ), click here or email Nick DiLuzio at ndiluzio@forisk.com.