Forestry Report

It is with a great sense of sadness that I have to report that stumpage prices continued their retreat of last year, declining from both the fourth quarter and the same quarter last year (price graphs, pages 6 to 9). That makes it a trend, and it is not a good one.

Unfortunately, 2022 ended with a slowing economy, dour forecasts, declining stumpage prices, and lumber-adjusted housing starts well under 1.2 million (a benchmark for demand). Other than that, we are just fine. The trees are still growing, our land is not shrinking, and we still have one of the most robust markets for trees in the world. But I think the next six months may not be a lot of fun.

La Niña weather conditions are forecast to continue into 2023, according to the National Oceanic & Atmospheric Administration (NOAA), bringing wetter conditions to the Northwestern U.S., where they are sorely needed, but unfortunately, this means drier conditions across the Southern U.S.

Weather or markets—that is the question. We are seeing somewhat of a cooling of timber prices across our operating region. At the same time, housing starts are down somewhat and lumber prices are, too (see page 7). So that’s probably why prices are down, right? I’m not so sure.

Southern timber prices waffled over the winter, but almost all are up significantly from one year ago. Northern prices are following a similar trend on average but are more volatile in local areas and for some species.