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US South Stumpage Price Trends by Region: May/June 2015

US South Stumpage Price Trends by Region: May/June 2015

In most of the South, stumpage price trends have been responding to the hot and dry summer weather by remaining stable or falling slightly as supply flows freely. The lone standout, however, is the West-South region, which has experienced abnormally-high rainfall since April. Prices in this area are mostly higher; pine and hardwood pulpwood prices are up by roughly 6 percent.

The East-South remains the highest-priced region for smaller-dimension pine species. Pine chip-n-saw is 13 percent above the Southwide average, and pine pulpwood is 30 percent above the average. Conversely, the East-South is also the lowest-cost region for hardwood species in the South; hardwood sawtimber is 11 percent below the Southwide average, and hardwood pulpwood is 18 percent below the average.

The West-South is the highest-priced region for hardwood products, as hardwood sawtimber is 6 percent higher than the Southwide average and hardwood pulpwood is 25 percent higher than the average. In addition, pine sawtimber in the West-South is 9 percent higher than the Southwide average. While the price of pine pulpwood increased 6 percent in the May/June 60-day period, prices for smaller-dimension pine are still 6-7 percent below the Southwide average.

In the Mid-South, where markets for timber are less developed, hardwood sawtimber is the only timber product that sells at a higher price than the Southwide average; prices in this region are 5 percent higher than the average. Pine sawtimber is 11 percent below the Southwide average and pine pulpwood is 24 percent below the average. 

South_Stumpage_Spring_2015

The graphs above demonstrate the timber price disparity that can occur between bordering geographic areas. A host of factors influence supply and demand of timber, which combine to affect price. Demand in any given location wood basin is influenced by the size and type of consuming facilities that operate within a roughly 75-mile radius--sawmills, panel mills, pulp and paper mills, pellet mills, and biofuels or biochemical producers. Supply is sometimes, however, driven by factors other than demand. For instance, if demand for pine sawtimber is high, the available supply of hardwood pulpwood will increase, as hardwood pulpwood is a by-product of pine sawtimber harvests. Weather also has an impact on regional timber supplies, as an area that receives prolonged, above-average rainfall might be forced to limit forest outputs due to poor ground conditions.

Timber prices in each region of the South are heavily influenced by local market conditions, and these conditions are continually changing. For instance, note the temporary East-South increase (and subsequent decrease just one quarter later) in pine sawtimber prices beginning in December, 2014. Also, note the increase in hardwood sawtimber prices within the West-South during the same timeframe. Within just six months, this region has experienced a roughly 16 percent increase in hardwood sawtimber pricing and has, at the same time, overtaken the Mid-South as the highest- priced market for this product in the South. 

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