January - March, 2007
News from Missouri's Neighbors
Nebraska reports that there are competitive market conditions for species and grades of lumber. Demand for items such as hard maple and red oak is limited, backing up inventory through the supply chain to the sawmill. The buildup is pressuring prices. The demand for soft maple remains solid, particularly for Sel and Btr grades. The strong demand from domestic and off-shore markets is driving a brisk business for white oak. Log decks are low across much of the territory. Even though weather conditions have been more conducive to logging in recent weeks, poor pulpwood markets could constrict future logging activity.
Tennessee reports that the market has been mixed, some species are hot and others are nearly dead. Red oak upper grades are very difficult to sell at almost any price and hard maple is very slow. White oak and walnut are very much in demand, just cannot get enough of either to meet possible orders. The lower grade markets are not as good as they were, but steady. The tie market continues to be very strong.
The slumping housing market is the primary reason for the slowing of lumber demand. Housing starts were at a high of 2.265 million units in January 2006 and have dropped to 1.408 million units a year later, a drop of 38 percent. Diesel is about the same as it was a year ago and has only recently begun to creep upward !!
The winter has not been a difficult one from a weather standpoint, not much cold weather, warm in fact a few times during the last few weeks. The mills in the eastern part of the state seem to have plenty of logs and as you go further west, they have fewer. Wet weather has hurt some mills, but doesn't seem to have caused any unwanted shutdowns.
Timber Mart South's latest reports states that south-wide average stumpage prices dipped further for both pine sawtimber and chip-n-saw in the 4th quarter of 2006. Pulpwood prices increased slightly. Prices for all five major products were below the averages of one year ago.
Stumpage prices for both mixed hardwood sawtimber and hardwood pulpwood recovered slightly this quarter from declines earlier in the year. Both averages were about $0.50 per ton above prices last quarter, while still below prices of one year ago.
Sources: Nebraska Timber Talk, Tennessee Forest Products Bulletin, Timber Mart South.