July - Sept 2014
The Word on the Street
By Jason E. Jensen, CF
Markets have fluctuated during the past quarter but still remain strong. Grade lumber markets, particularly grade red oak, have taken a couple of drops in price. The railroad tie market has taken a couple of increases that has balanced the markets out. Stumpage prices seem to have balanced out and remained stable when compared with the last quarter. Demand for railroad ties remains very strong, as does markets for stave quality white oak and walnut. Pallet markets are very good as well. Pine markets exist although they aren't as strong as we'd like to see them. Overall markets are still strong. As in the past couple reports, if you're a landowner considering a timber sale, now is a good time to contact a forester and start the process of initiating a sale. In addition to utilizing a forester, take the selection of your logger very seriously. The logger will determine the future value of the timber resource on your property. Fortunately we have over 400 loggers that have completed Professional Timber Harvester training and 13 that have taken the extra step of becoming Certified Master Loggers.
One of the biggest factors influencing our timber prices and markets in Missouri is the housing market. While the housing market has recovered some (back to 2008 levels), we still haven't seen a truly robust recovery. The question to be answered is why? There are many economic factors involved in housing markets. Unemployment rates continue to decline which on the surface is a
positive sign. However participation in the workforce continues to decline as well. This is not a healthy situation for the long term health of the economy in the U.S. Decreased participation in the workforce is also one of the factors involved in the decrease in unemployment. In other words don't just assume that because unemployment decreased that everyone found jobs. Some have found jobs but some have also quit looking. This is not healthy for our economy and will result in a shortage of workers in the workplace over time.
Numbers of first time home buyers continues to be lower than the long term average. While there are several reasons for this, the biggest factor is a lack of good paying jobs. The lack of good paying jobs means that potential first time home buyers either can't afford or don't have adequate savings to purchase a new home. This also results in the lack of family formation. If people aren't getting married then they're not going to be buying a home. This is further reinforced by the big increases in the new construction of multi-family housing (apartment complexes). Multi-family housing has been the bright spot in the housing market and reflects most of the increases in the housing markets that we are seeing today.