US South timber prices during the first quarter of 2017 continued to decrease from last year, with nearly all pulpwood and pine log products dropping -6 percent. Pine chip-n-saw was the lone product that experienced a slight increase in price.
On a Southwide basis, pine pulpwood prices dropped to $9.64/ton during 1Q2017 (-6.1 percent), and two out of three regions saw prices decrease for pine pulpwood. The West-South experienced the largest drop to $7.65/ton, or -10.1 percent, and the East-South dropped to $12.09/ton, a decrease of -9 percent. The Mid-South was the only region to show an increase in price, which was a substantial +4.9 percent to $8.40/ton.
Hardwood pulpwood prices took an equally large drop, tumbling -6 percent during 1Q to $6.87/ton. The Mid-South region plunged -8.7 percent to $7.20/ton; the East-South plummeted -8.2 percent to $4.73/ton; and the West-South slipped by -.5 percent to $9.52/ton.
Pine chip-n-saw prices increased to $18.14/ton, a rise of 3.9 percent Southwide. The West-South region saw the largest decrease, as prices fell -6.4 percent to $15.13/ton. The East-South region slipped to $19.50/ton, a -1.3 percent drop, and the Mid-South region jumped to $18.24/ton, an increase of 11.9 percent.
Pine sawtimber followed suit with both pulpwood products, declining -6 percent to a Southwide average of $26.24/ton. Mid-South and East-South pine sawtimber prices both slid -5.5 percent, down to $24.73/ton and $24.80/ton, respectively. Prices in the West-South dropped -7.5 percent to $28.62/ton.
While GDP increased by 0.7 percent in 1Q2017—a lower rate than it had increased in previous quarters—the Atlanta Federal Reserve recently projected that the US economy is on track to grow at an annual pace of 4.3 percent in 2Q. Growth at this rate could play into demand for pulp and sawtimber in the coming months. The recently-announced US tariffs on lumber imports from Canada may also spur demand for sawtimber logs in the US South. However, even if demand for pine sawtimber increases as 2017 progresses, there is still an oversupply of large logs available on the market and stumpage prices could remain muted.