July - Sept., 2007
Missouri's Neighbors
South-wide average stumpage prices declined slightly for four out of the five major products this quarter. Only mixed hardwood sawtimber eased upwards. Dry weather in the eastern South has cut demand along with curtailed lumber production in the wake of weaker housing markets.
Hardwood sawtimber prices increased slightly for the quarter as well as the same period a year ago. Average hardwood pulpwood prices showed a decline this quarter of over 8 percent, about $0.50 per ton; however, still up over 10.5 percent from last year's average.
The TMS Forest Business Optimism survey showed that our reporters' confidence in the growth of the forest industry economy remained moderate in the 2nd Quarter, about the same as last quarter. Overall optimism scored 54 in both periods. However, this quarter the middle-of-the road lost ground and responses were more evenly distributed. A year ago reporters were more optimistic at 64 in the 2nd Quarter of 2006.
Optimism about the housing markets remained steady. Most respondents still expect a dip followed by a recovery over the next twelve months.
Confidence in a growing Biomass Market remained strong. About 82 percent expect slow but steady development of biomass markets in the South.
In Tennessee, the market has been poor for a while and the summer sure doesn't help much. The soft housing market in the United States has kept demand lower for a number of species and products. The bright spots continue to be White Oak and Walnut. Export to Europe for White Oak and the flooring market for Walnut has each of these species in high demand and high prices. The dollar has been weaker favoring US exporters in the global economy, even though the slumping US housing market has had an effect on the worldwide demand for hardwood lumber used to produce furniture and other finished goods being sent back to the US market.
Source: Timber-Mart South, Tennessee Forest Products Bulletin