Wildfires, Housing Have Lasting Effect on Timber Prices
CHARLOTTE, N.C. --(Business Wire)-- Wildfires scorching more than 500,000 acres this year in Florida and Georgia caused prices of wood products to drop, and prices are expected to remain below the area's historic levels for months, according to experts in the forest products industry.
Scott Twillmann, senior timber market analyst for Forest2Market (F2M), said Friday that pine pulpwood prices in Northern Florida and Southeastern Georgia have been severely impacted on two fronts.
The glut of salvage wood from fires caused prices to fall for both chip-n-saw and pulpwood in the region, allowing area mills to fill their log yards quickly, Twillmann said. In addition, the depressed conditions in the residential construction sector continue to lower chip-n-saw pricing. These two factors have combined to lengthen the depressed market conditions in the coastal Florida and Georgia region.
"The fires that this region experienced last spring had an immediate short-term impact on pine pulpwood prices but overall demand from the pulp industry continues to be relatively strong," Twillmann said. "Conversely, persistent weakness in lumber markets will keep log prices below historical norms."
The fires forced the prices of pine pulpwood to fall 60 percent from April to May. The historic average price for the timber product is around $9 per ton. After the fires, tract by tract prices for salvage wood fell between 50 cents and $1 per ton.
Pine pulpwood prices are forecast to rise again by November, and they are expected to average between $7 and $8 per ton until the end of 2007.
"Despite the drop in prices, land owners should have a window in the coming months to maximize their revenue as pulpwood prices rebound," Twillmann said. "However, abysmal residential construction markets will continue to have an impact on chip-n-saw prices well into 2008."
Although the wildfires burned through hundreds of thousands of acres, it only destroyed about 2 percent of the pine sawtimber in the Northern Florida and Southeastern Georgia timber market, he said. Yet it has impacted all timberland owners in the region in terms of pricing.
Forest2Market has developed sophisticated analytical tools to accurately forecast timber prices throughout the South. For more information, visit www.forest2market.com.