MARKET UPDATE
February 2006
In Southern Maine it has been and remains a challenging
year in which to harvest forest products. Record precipitation and
a warm winter has made it difficult for loggers to operate heavy equipment
and not damage soil. Conditions have resulted in very limited production
in most of our working area through the first half of the winter.
Combine this with decent markets for wood products
and overall demand for most round wood is good.
Demand for high grade hardwood logs is strong. Both
hard maple and soft maple remain near all time highs. Red oak has
recovered somewhat from last years low, but is still off peaks from
what was seen a couple of years ago. Other species are in demand and
buyers are paying prices in mid to upper part of recent ranges.
Veneer demand and prices track the hardwood sawlog
situation. Maple and yellow birch are very strong with other species,
still off recent peaks.
White pine log prices are good. Inventory at some
mills is increasing and those mills will have comfortable volumes
to carry them through mud season. Other mills are not so fortunate.
Some have simply suffered bad breaks, others with reputations for
scaling or grading problems are paying the fiddler for past sins.
There has been some recent softening in demand for
pallet grade white pine and hemlock sawlogs. Most buyers of these
products are smaller producers. Some of these small mills are beginning
to put suppliers on quota for these products.
Pulpwood of all types is in short supply and there
is upward pressure on prices. Pulpmills have been producing near capacity.
Combine that with poor logging conditions and supplies are tight.
Simple supply/demand economics should result in price increases in
the short term.
Firewood markets are booming and contributing to
strong demand for hardwood. As we all know, the price of oil, gas
and other energy sources are high. Anyone who can burn wood, is. Firewood
dealers are saying many consumers are ordering wood for next winter
now.
News: A biomass energy plant being constructed by
Public Service of New Hampshire in Portsmouth is scheduled to come
on line this summer. Projections are that it will consume between
400,000 and 450,000 tons of woody biomass per year. This is a significant
volume of wood, equivilent to about 200,000 cords. This new market
will have a major impact on markets for low grade wood in Southern
Maine and New Hampshire. The logging equipment used to harvest biomass
is large. It takes careful tree selection and layout of skid trails
to avoid excessive damage to residual stems. Operators need to have
the proper incentives and training to cut out higher value product
before chipping the low value portion of the stem. With these factors
in mind we see this as very good news for landowners.
Rene Noel
TOP OF PAGE
MARKET UPDATE
February 2001
Winter has provided nearly ideal logging conditions.
Demand for softwood dimension lumber is down. Stumpage prices for
spruce, fir, hemlock and red pine are down as a result. Recently demand
for white pine logs has decreased. Buyers are holding prices for ongoing
sales but offers for new sales are down. Hardwood is holding up better
with demand for high grade sawlogs and veneer still good. Prices are
off record levels of a few months ago but are still very good.
Mill inventories for all species and products are
medium to high. Recent storms have made logging somewhat more challenging
but I do not anticipate mills having any difficulty maintaining inventory
levels until spring breakup.
What will happen in the longer term is hard to predict.
If winter ends on a stormy note and we have a normal spring, wood
inventories will reach their usual low point in late spring or early
summer. The condition of the economy will then determine demand and
the direction of stumpage markets. If winter ends on a mild note and
we have a warm dry spring we may see a repeat of the glut in wood
supply experienced in 1999.
For our clients we fell behind in selling wood because
of the glut of tree growth plans brought on by the December 31 deadline.
That has turned out to be a blessing in disguise as we have not sold
a lot of wood into a declining market. At this time we are doing improvement
cuts and thinnings and harvest that are mostly of hardwood. We are
holding back on selling softwood sawtimber of all species. We expect
summer to bring normal stumpage markets and are preparing to sell
this softwood timber in late spring or early summer.
CONTINUED WARNING!!!! There continues to be stumpage
buyers and loggers from away who are working the southern Maine/New
Hampshire. Some have questionable reputations. Some have even been
indicted by the state Attorney General for fraudulent business practices.
To succeed, they are obviously personable and have good sales techniques.
Don't fall for a good sales pitch, and advise your neighbors not to
either. From what I've seen, they do a lousy job in the woods and
the prices they offer are not competitive.
To get the best prices for your timber you need to
get prices from several buyers or sell by sealed I recommend you hire
the services of an independent forester and have him or her, mark
the trees to be sold, scale the volume of wood they contain and sell
them for the best prices and supervise the harvest. A few high-sounding
prices do not mean much. It is the prices, combined with how the cut
trees are utilized and getting paid for everything that makes for
the biggest bottom line. Research has shown that landowners who hire
foresters usually end up with more money even after paying their forester.
They also end up with a better, more productive woodlot.
Rene Noel
TOP OF PAGE
