Mississippi Timber Price Report

July/August 1999
Timber Market Comments

 

Sawtimber

The sawtimber stumpage markets in July/August generally extended the market conditions we saw in May/June. The pine lumber market experienced a significant decline in July, in part due to the July 4 break normally taken by many sawmills and in part attributed to the unusually hot weather hampering construction. Despite the pine lumber market slip, southern pine 2x4 # KD lumber prices in late August remained about 15% higher than they had been during the same period a year ago. These prices and good pine lumber demand due to a good housing market kept pine sawtimber the best part of our standing timber market.

Several reporters commented that sawlog markets were good but that tracts with high percentages of pulpwood were in less demand. Pine sawtimber prices for the period remained good and by the end of August contacts were reporting more sales coming to the market. As August ended, buyers were reporting that they were looking to buy more standing timber as fall and winter approach. One forester commented that some mills in his area (central Mississippi) had cut some winter tracts this summer and would be looking for more stumpage to "restock" standing timber inventories.

Many consultants reported that their clients have been holding their timber off the market this summer but that more are now inclined to market their tracts this fall. Many reports received for this issue showed 6 or more bids. Generally, pine sawtimber prices held steady statewide in the $440 to $460/MBF range.

Many foresters continued working on thinning plantations and other management activities in July/August. Most pine mills reported they were satisfied with their current log inventories.

A standing price of $360/MBF was reported in south Mississippi for spruce pine sawtimber.

On the hardwood side, hardwood lumber markets remained active with demand for #2 and #3 red oak good but demand for #1 lumber (often sold for export) "below par". Ash lumber demand was reported to be picking up and poplar lumber was moving well. Lumber prices were slowly improving but prices across the board are lower than they were at this time last year.

Standing mixed hardwood sawtimber average prices moved a bit lower and oak sawtimber prices held steady statewide. Some mills reported that they were building log inventories for winter operations and were expecting to continue through the fall.

 

Pulpwood

The pulpwood market remained slow in July/August. Some reporters described it as "awful" and most contacts I talked with asked when we might get some improvement in the pulpwood market? That improvement will come soonest when the rainy season begins, as it normally does, but longer-term recovery of pulpwood demand is dependent on the recovery of the pulp and paper sector currently suffering from too much production capacity for the current market.

Pulpwood demand was reported improving a bit by some contacts, but prices have stayed low.

 

Other Comments

Some contacts reported beetle activity but were not sure if southern pine beetle was the culprit. The U.S. Forest Service report on the southern pine beetle (SPB) situation was published in June. According to USFS, beetle populations are high in Alabama and the Piedmont of South Carolina, but are "static/low" in other states (including Mississippi). Trapping has revealed "an unprecedented low level of SPB activity in the western gulf states." Based on the report, Mississippi SPB infestations should be "static/low" or "declining/low" in 1999. This is good news but it remains a good idea for forest landowners to check forest periodically for sign of southern pine beetles.

A review of our timber market of the first half of 1999 indicates that the volume of timber being harvested this year is about the same as 1998 but prices are generally lower. Pine sawtimber stumpage prices have held even compared to 1998's average but other product prices have dropped. Mixed hardwood sawtimber and oak sawtimber average prices for the first half of 1999 were 10% and 4.5% lower, respectively than 1998's yearly averages. Pulpwood prices were also lower. Pine pulpwood prices for January through June, 1999 were 18% lower than 1998's yearly average and average hardwood pulpwood prices were 28% lower. These figures confirm what many landowners have realized this year, our sawlog markets have been fairly steady buy pulpwood markets have been very poor.

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View the Standing and Delivered prices for July/August 1999.

As always, your comments, pros and cons are welcome.

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