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Forisk: Southern sawtimber prices should rise

ATHENS, Ga. — Increasing demand for wood raw materials indicates higher pine stumpage prices for forest owners and investors, according to data from Athens, Ga.-based Forisk Consulting.

Forisk forecasts sawtimber prices for the South strengthening 4.6 percent into 2012 and 5.5 percent into 2013 as lumber production increases with housing starts. Alternately, pine pulpwood, the lower valued raw material used for pulp, OSB and bioenergy, gains 1.4 percent and 2.7 percent into 2012 and 2013 South-wide, with high variance across the 11 states covered in Forisk’s models. The ForiskFORECAST emphasizes the limits of regional or national forecasts for timber markets, and the critical importance of assessing timber prices locally.

In 2011, states such as Georgia, Louisiana and Mississippi show sawtimber prices exceeding $30/ton, and Florida and Louisiana surpassing $11/ton for pine pulpwood. Prices change annually across and between states in the 10-year forecast as local mills adjust to end-market demands. The benefit to forecast users of this bottom-up approach was evident in 2010.

“In 2010, Forisk’s sawtimber forecast was within 4 percent of actual prices, and within 1 percent for key end-use markets such as paper and paperboard,” said Dr. Tim Sydor, Forisk’s forest economist. “The key is understanding and updating the local, state-specific relationship – the elasticity – between wood demand and prices.”

Source: Forisk Consulting

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