March 15, 2011

Saw timber prices to recover in 2012-2013 in US-south

An increasing demand for raw woody biomass could be a sign of higher pine stumpage prices for forest owners and investors.

Between 2012 and 2013 Forisk Consulting, dedicated to analyzing the supply and demand characteristics of local wood and timber markets, forecasts saw timber prices for US states located in the south of the region strengthening 4.6% and 5.5%, respectively, as lumber production increases with housing starts.

Alternately, pine pulpwood – the lower valued raw material used for pulp, OSB and bioenergy – are predicted to gain 1.5% and 2.7% into 2012 and 2013 south-wide, with high variance across the 11 states covered in Forisk's models.

In 2011, states such as Georgia, Louisiana and Mississippi could see saw timber prices exceeding $30 (€21.5) per tonne, and Florida and Louisiana surpassing $11 per tonne for pine pulpwood. Prices change annually across and between states in the 10-year forecast as local mills adjust to end-market demands.

'In 2010 Forisk's saw timber forecast was within 4% of actual prices and within 1% for key end-use markets such as paper and paperboard,' says Tim Sydor, Forisk's forest economist. 'The key is understanding and updating the local, state-specific relationship – the elasticity – between wood demand and prices.'

The 'ForiskForecast: Pine Sawtimber and Pine Pulpwood' predicts annual pine saw timber and pulpwood stumpage prices across the south of the US and by state through 2020, and forecasts the production of lumber and paper and paperboard, as well as the demand for wood from emerging bioenergy markets.

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