Data Sources for Analyzing Timber Markets in the U.S.

22 05 2013

If a tree falls in the woods, will someone buy it?  Who?  What will they use it for?  How much will they pay for it?  How many other trees will they need this year?  Next year?  A rigorous timber market analysis (TMA) process helps prioritize questions, aggregate data, conduct analysis and communicate results and recommendations.  Much of the data required for TMA in the United States is readily available.  The following list includes a sample of free and fee-based data sources for supply, demand and price data:

Forest Inventory and Analysis (FIA) data from the U.S. Forest Service.  The FIA Program includes a “continuous forest census” to help project how U.S. forests are likely to change over the next 10 to 50 years. Specific data from the FIA Program includes, for example, inventory, growth and removal data for hardwood and pine. The USDA Forest Service manages the FIA Program in cooperation with state and private forestry organizations. The McSweeney-McNary Forest Research Act of 1928 created the FIA Program, which initiated the first forest inventories in 1930.

Timber Product Output (TPO) data from the U.S. Forest Service. The TPO Database includes a standard set of consistently coded data variables for each U.S. state and county related to forest harvesting and tree removals.  Specific data includes, for example, the volume of roundwood products harvested, logging residues left behind, and the wood and bark residues generated by primary wood-using mills. The latest data available from the TPO Database is dated 2009. When using TPO data, Forisk often projects the base numbers to the current year by applying annual changes in wood demand.

Wood Demand data from the Center for Forest Business at the University of Georgia.  The Wood Demand Research Program collects wood use data from participating mills on a quarterly basis. In addition, the Program publishes Forest Industry Shapefiles that track all forest industry facilities.  These shapefiles are updated two times per year and can be used with GIS/map-making software.

Timberland owner data from Forisk Consulting. Forisk tracks hundreds of the largest private timberland owners and managers in the United States that own 10,000 acres or more. This is part of Forisk’s ongoing research program of timberland investment vehicles and is updated annually.

Wood bioenergy project data from Wood Bioenergy US. Forisk analyzes the U.S. wood bioenergy sector through tracking and screening all announced and operating wood-using bioenergy projects in the United States. In addition, WBUS tracks and analyzes project development over time. This is part of Forisk’s ongoing wood bioenergy research program and the WBUS database is updated every two months.  The project lists provide a means for evaluating the relevance and implications for wood bioenergy to specific timber and wood markets.

Several organizations provide regional and local stumpage and delivered price information.  State forestry and natural resource departments sometimes track sales from public and/or private lands.  A good example is the Oregon Department of Forestry.  One source specific to the U.S. South is Timber Mart-South.  Managed by the independent, non-profit Frank W. Norris Foundation located at the Warnell School of Forest Resources at the University of Georgia, Timber Mart-South publishes quarterly and annual reports of stumpage and delivered prices in the US South. Timber Mart-South has surveyed and reported timber prices since 1976.

Timber markets are uniquely local.  Decision-supporting analysis of timber markets depends on a process of systematically evaluating and tracking local wood raw material markets for investing in and managing timberlands and wood-using facilities.

Forisk will cover these and other data sources during “Timber Market Analysis” on August 12th in Atlanta, a one-day course for anyone who wants a step-by-step process to understand, track, and analyze the price, demand, supply, and competitive dynamics of timber markets and wood baskets. For more information, click here

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Thoughts from 2011 UGA Timberland Investment Conference

30 03 2011

From the desk of Dr. Tim Sydor, Forest Economist:

The 2011 Timberland Investment Conference, hosted last week by the University of Georgia’s (UGA) Center for Forest Business at Lake Oconee, attracted over 350 participants from all aspects of the timberland investment spectrum. Here are my thoughts on select topics covered at the Conference:

The condition of housing markets in the US captured everyone’s attention on the first day.  Rightly so.  As the final use for numerous timber products, housing explicitly drives wood demand and prices for lumber and logs. I noted in particular two points from presentations by Harvard’s Joint Center for Housing Studies, the Federal Reserve Bank of Dallas and the Terry College of Business at UGA.  First, the panel estimated an “overhang” of 3 to 3.5 million housing units. This overbuilt inventory includes foreclosed and soon-to-be foreclosed homes, which could dampen any market recovery. Two, there exists an “overhang” of unrealized demand for housing on the order of 2 to 2.5 million units (also known as pent-up demand) stemming from delayed housing formation due to the recent recession and poor job markets.

Optimistic and pessimistic assessments in the forest industry use these points selectively to support conclusions of why a housing recovery is or is not on the horizon. From my view, the estimates of both “overhangs” are sufficiently close to each other to indicate that modest economic growth and activity is all that is needed for stronger employment and the clearing of excess inventory over the next few years.  Also, this same view would discourage any policy that slows the resolution of unhealthy and, where necessary, underwater mortgages.

Export markets to China of logs and lumber shined as one of the bright spots in the industry outlook. Log exports increased 600% since 2008 (wow!). Dr. Jack Lutz put this into context, noting that the associated volume was equivalent to the annual use at a single large sawmill. Hardly a game changer.  However, as an economist, I always look to the margin and found the activity encouraging.

What spurred recent Chinese demand?  Presentations shared multiple theses.  One, the Chinese Government increased plans from building 3 million affordable housing units in 2010 to 10 million units per year until 2015. Two, Chinese log importers felt compelled to react to uncertainty associated with Russian log export taxes (which have been in effect at the same 15 Euro/cubic meter since April 2008).

For me, it remains important to keep this development in perspective. Log exports are increasing to the country (China) where government expenditures keep demand growing for housing. These exports, to some degree, substitute for logs from another country (Russia) whose government chose to curb log exports to support its own lumber industry.  Net result?  The US, in the short term, increased its role as a Chinese source for wood raw materials.