We’re halfway through 2020 and what a wild ride it’s been for all Americans. Luckily for this industry, forestry jobs and services are considered essential, so many of us have been able to continue working. However, with the continual pressure of Chinese tariffs and decreased consumer demand at home, we’ve gotten a lot of reports that many mills across the U.S. are dramatically slowing production.
COVID-19 along with wet weather has created a situation where wood mills are full of inventory and don’t need to buy additional inventory. Which means that, in much of the world, they’ve lowered quotas or even stopped taking wood altogether. A lot of loggers, especially those struggling financially, could see the same market forces at work that squeezed them out of business in 2008.
So, what should landowners do in times like these? Follow your management plan and harvest mature timber. If you’re supposed to harvest, then harvest. If you’re supposed to thin, thin. Whatever your management plan say do, do it. Why? Well…
In 2008 a lot of landowners held onto their mature timber (ready to be harvested) due to suppressed markets and did not pursue a timber sale for almost a decade. Which means they held onto a mature investment for nearly 10 years without replanting and allowing a new investment to grow. A lot of landowners in the Southeast and West Coast even saw catastrophic events destory their mature investment. The impacts of holding on to mature inventory were two-fold:
- Landowners who would’ve otherwise replanted and thinned a new crop of timber lost a decade of new growth
- Available forest inventory artificially exploded due to landowner’s unwillingness to sell and timber prices have remained flat
Ironically, when a large percentage of landowners don’t harvest their mature timber, as they chose to do between 2008 and now, the market is negatively impacted to an even greater degree due to the spike in unharvested or excess inventory. And since supply and demand is usually on full display in timber markets, a greater supply means that there is lower demand. Couple this lagging effect from unharvested timber with a lower consumer demand and Chinese tariffs and you’ve got a recipe for static timber prices or in some cases, lowered prices.
Below, you can find relatively current 2020 timber prices and comments regarding different timber markets around the U.S.
Timber Prices Q3 2020
| STATE | REGION | PPW | PST | CNS | HPW | HST |
|---|---|---|---|---|---|---|
| Alabama | – | $5.00 | $19.50 | $14.00 | $7.00 | $41.50 |
| Arkansas | – | $3.50 | $20.30 | $10.70 | $12.30 | $0.00 |
| Florida | North | $15.00 | $25.00 | $22.00 | $2.50 | $0.00 |
| West | $10.00 | $28.00 | $22.00 | $8.00 | $15.00 | |
| Georgia | Northwest | $7.00 | $19.00 | $16.00 | $8.00 | $32.00 |
| Central | $8.25 | $26.00 | $17.00 | $7.00 | $35.00 | |
| Southeast | $20.00 | $28.00 | $24.00 | $9.00 | $14.00 | |
| East | $11.00 | $24.50 | $18.75 | $9.50 | $32.50 | |
| Louisiana | – | $7.00 | $25.00 | $13.00 | $6.00 | $33.00 |
| Maine | – | $2.29 | $19.02 | $0.00 | $10.18 | $34.25 |
| Mississippi | – | $5.00 | $18.50 | $13.00 | $10.00 | $40.00 |
| North Carolina | – | $7.75 | $23.25 | $18.00 | $3.50 | $37.50 |
| South Carolina | North | $8.75 | $26.50 | $19.00 | $6.50 | $26.00 |
| East | $8.50 | $22.50 | $18.00 | $3.00 | $22.00 | |
| West | $9.00 | $25.00 | $17.75 | $9.00 | $31.50 | |
| Central | $8.50 | $23.50 | $16.50 | $9.00 | $28.00 | |
| Tennessee | – | $5.00 | $16.00 | $10.00 | $4.00 | $48.00 |
| Texas | Northeast | $3.50 | $20.30 | $10.70 | $12.30 | $0.00 |
| Southeast | $6.00 | $23.00 | $10.00 | $5.00 | $25.00 | |
| Virginia | – | $7.50 | $18.25 | $14.50 | $3.00 | $18.00 |
| West Virginia | – | $7.75 | $0.00 | $0.00 | $6.00 | $0.00 |
Comments