Today’s Log Prices Continue to Lag Behind Current Finished Lumber Prices

Demand for wood and wood products is unrelenting. Resulting in lumber prices reaching historic high levels and daily climbing ever higher. The shares of publicly traded lumber manufacturers, distributors and retailers wood suppliers continue to soar. While oddly enough, trees themselves remain dirt cheap in places like Louisiana, where timber supplies are plentiful. The stumpage fee, or what lumber sawmills pay to landowners for trees, for Louisiana pine sawtimber on March 31 was $22.75 per short ton, this according to the latest data from price provider TimberMart-South. That’s the lowest since 2011. An abundance of harvest-ready trees has kept stumpage fees extremely low across the U.S. South, home to half of the country’s production. Harvest-ready trees exceed sawmill capacity throughout the southern U.S. Since it’s so expensive to transport heavy logs, supplies go to sawmills in the area and the fees are highly localized in the region, where many timberlands are privately owned. In Alabama, the stumpage fees are slightly higher than Louisiana at $23.34 per short ton. But they’ve barely budged since 2016 and are half the price fetched in 2005. Forest Economic Advisors estimates capacity for mills in the U.S. South at 23.6 billion board feet. As much as 1.5 billion board feet of new capacity is expected to come online over the next year or two.

FEA compiles the Wood Markets News from various 3rd party sources to provide readers with the latest news impacting forest product markets. Opinions or views expressed in these articles do not necessarily represent those of FEA.
Original Source:
Lumber Prices Soar, But Logs Are Still Dirt Cheap