January - March, 2010
News from our Neighbors
Nebraska reports that the market is active for most species and grades key to the region. Business intensity is concentrated on green stocks, as resale operations and secondary manufacturers strive to restore inventories. In the meantime, sawmill production is down. Some mills remain idle. Many more are running reduced production schedules. Inadequate log supplies are often cited as the reason, but the primary culprit preventing production expansion is access to additional working capital. Today’s market energy is supply-drive circumstance. Nothing has yet occurred to measurably increase demand.
From Tennessee, some better market news. Pulpwood prices are up because of the poor weather this winter. The pulp mills have been low on log inventory as we feared since last fall. There are reports of some mills paying as much as $50 per ton for hardwood pulpwood at some distance from the mill. This has had an adverse affect on the supply of hardwood sawlogs and tie logs as it has become more economical to throw the marginal logs into the pulpwood pile at the logging site. Sawmills are looking for logs especially since the winter has been tough for log supply. Tie buyers are looking for ties and the prices are steady.
In the South, strong markets of pulpwood and sawlogs have prompted increased logging activity. However, inclement weather is problematic for harvesting timber. Furthermore, the extended downturn in the wood products business has decreased the number of qualified loggers. In addition, there has been a limited volume of timber sold the past year, restricting log availability further. The result is low log decks at the mills, and green lumber production remains at historically depressed levels as a result. For many grades and thicknesses, buyer interest is outpacing supplies, pressuring higher prices. On the other hand, activity of kiln dried stocks is more controlled. End users are reluctant to purchase beyond short-term needs.
Sources: Nebraska Forest Service, Tennessee Department of Agriculture-Division of Forestry