ForiskForecast for Stumpage Prices: What Do We Expect?

9 04 2012

In 2011 for the second consecutive year, Forisk’s localized pine sawtimber forecast hit within 4% of actual on average at the state-level.  South-wide, Forisk’s regional pine sawtimber average of $26.57 per ton exceeded Timber Mart-South’s actual price of $23.97 for 2011 by 4.7%.  The just published 2012 ForiskForecast takes on 11 states in the US South and Oregon’s and Washington’s Douglas-fir and hemlock markets in the Pacific Northwest.

Our research develops three economic and forest industry scenarios.  The baseline and “low growth” forecasts expect more of the same, with relatively flat to negative pricing in 2012 for pine sawtimber, with modest strengthening in 2014 as housing returns.  Higher sawtimber prices require more than simply increased housing starts; prices require a suitable balance of forest industry capacity to lumber demand and production, with sawmills exceeding 85% utilization for six to twelve months to “reset the floor.”  Pine pulpwood markets vary across the US South, as those states with concentrated pulp mills and “viable” bioenergy projects – as specified in Wood Bioenergy US – show strong pulpwood stumpage markets.

Meanwhile, other market activities provide opportunities to supplement needed demand, including active export markets and the expansion of the Panama Canal.  Forisk developed a “high growth” scenario that accounts for both strong economic and housing market growth, and potential increased log export activity from the US South by state.  This scenario expects pine sawtimber strengthening in 2012-2013, with prices in 2014 $2.86 per ton higher than the baseline forecast.

To learn more about the 2012 ForiskForecast, click here.

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