July - September, 2009
Regional Updates
Neighboring Nebraska reports that market conditions are better for producers than at the start of the second quarter. However, stable pricing and increased continuity in business resulted from supply correction. A substantial portion of the supply adjustment stemmed from sawmill production idled for the summer months. Plans called for production to resume by fall in anticipation of better business performance. However, the market has not improved; demand is flat, and there are no indications that an upturn is imminent for the near-term. In a broad view, prices are holding steady, but include moderate upward and downward movement as determined by supply/demand imbalances.
Many suppliers are encouraged by a slight improvement in shipments of green and kiln dried hardwood lumber. Cautious purchasing by domestic and international secondary manufacturers and distributors has reduced inventories, not only at that end of the supply chain but throughout the hardwood supply pipeline. Sawmill operators lowered log inventories due to limited demand for developing lumber. As a result, many logging contractors exited the business, and landowners have delayed timber sales. Therefore, hardwood timber, log, and lumber supplies have contracted. Now, buyers are replenishing inventories, increasing orders and shipments. The uptick in purchasing has pressured green lumber pricing for certain species, grades, and thicknesses, though upward movement is mostly coming from the extreme low end. On the other hand, markets are soft for crossties and other industrial timber products, with activity confined to established buyer/seller business.
Tennessee notes that there is still not any real good news to report, lumber does appear to be moving at least, even though lumber prices remain low. There have been adjustments for some log species, such as Ash, that has increased for the upper grades. Pulpwood prices remain steady, with the paper market remaining poor. Ties have continued to decrease in price as yards fill up and some meet their quotas for the railroads. Some rails have stopped taking ties for this year as things slow down for them as well. Stave logs for the few stave mills continue to be good and steady, even though slower because of the warm weather and need to control inventory for stain and degrade problems. The industry has an amazingly positive attitude and is determined to hang in there and make it through these down markets.
Timber-Mart South notes that south-wide average stumpage prices decreased for all five major timber products for the second straight quarter. Again, four out of five prices were lower than one year ago. Market activity was very slow across the South.
Source: Nebraska Timber Talk, Tennessee Forest Products Bulletin, Timber-Mart South