As we enter the final month of the second quarter, following is a brief report on markets, news, and other developments that impact forest landowners in F&W’s operating regions. The information in this report is based on a recent survey of F&W managers.
Southeastern managers report that timber markets are mostly normal for this time of year but that timber sales activity is slowing down and prices are average to declining. Managers note that it is typical for prices to fall in the late spring and summer as dry conditions allow mills to fill with inventory and maintenance and downtime are typical around the Fourth of July. However, several cite labor issues, inflation, and, in particular, the increase in fuel prices as having an impact. Several managers note it appears that mills aren’t responding to the fuel price increase, putting a significant burden on the backs of loggers. However, the manager in Alabama notes that stumpage prices in his region are still generally higher than just before the pandemic. But he also notes that the announced closure of the WestRock mill at Panama City is expected to add pressure to the pine fiber markets in the Florida Panhandle and southern Alabama, with ripple effects in the general region. He says this is “largely attributed to the lack of resource in the region thanks to the devastation left by Hurricane Michael three years ago.” In other developments, the Florida manager reports that a new log line at Resolute Cross City, west of Gainesville, Fla., should go live this month after numerous delays due to supply chain issues. And the Virginia manager said sawmill updates and the new Roseburg Forest Products mill in North Carolina will have an impact on markets in the southern part of Virginia.
Managers in the West Gulf region report mixed markets: above and below normal. The manager covering northeast Mississippi, western Tennessee and southwest Kentucky says timber sale activity is normal for this time of year and prices are increasing. He notes that a new chip-n-saw mill is expected to open locally in the fourth quarter and that hardwood mills need wood. But he adds the Packaging Corporation of America mill has been closing on Fridays. In Texas, the manager says that full mill inventories, high fuel costs, and localized mechanical issues have resulted in mill shutdowns in his area. He adds, "Pulpwood quotas have made thinning operations very difficult. Many area loggers are shutting down operations due to quotas and fuel prices."
In the Northeast, managers report that markets are functioning normally for this time of year with average timber prices. The manager based in Midstate New York notes that logs have slowed due to generally good logging weather and increased mill inventories. He adds, "Sawmills are reporting issues with lumber inventories increasing because of difficulties with trucking." He says mills have increased prices to help with trucking but it is still not enough. The manager based in Upstate New York reports that regional hardwood sawmills are slowing purchases as their yards are full. He adds: "Veneer markets are slowing down, as is typical for the summer months, and hardwood logs are holding with no increases and hopefully no decrease in demand or price in the near term. Sugar maple is still selling well at good prices. Black cherry and oak are not in demand and prices reflect that. Pulpwood is in demand as regional mills need fiber. Softwood log markets are still strong despite the approaching summer."
F&W Forestry Services, Inc.
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