Market Roundup - Spring 2016
With winter coming to a close now is a good time to do a quick roundup of how the timber markets performed. It certainly was a crazy winter ! A lack of snow cover combined with very few days/nights with below zero temperatures led to challenging conditions in the woods. It was really hard to efficiently harvest the timber, especially where conditions tended to be wet. An added challenge were markets at or nearing capacity in the low grade category - ( pulp, biomass chips, firewood). However, it wasn’t all negative. Fortunately here at Stillwater Forestry LLC , our logging contractors were able to complete most of the timber sales we had planned for our clients. They also paid some very competitive prices for the timber that was harvested.
Below is a quick summary for each of the categories of timber that we sell
Hardwood saw logs, pallet and veneer were all very strong this winter. The prices paid by the mills were extremely competitive and remained consistent throughout the winter. It all boiled down to the mills not getting enough wood. The poor weather and market conditions for pulpwood/firewood has led to many of the mills experiencing less than sufficient log inventories coming into the spring mud season. The inventories for logs continue to remain low. This is good for anyone with hardwood logs to sell.
At the beginning of the winter, every pine and spruce mill both here in the states and over the border , were aggressively looking for logs. The shutdown of a third of the production at the giant pulp mill in Jay Maine, back in the end of the summer put a damper on softwood harvesting. Without a market
for pulpwood many of the cable skidder and CTL loggers in Western Maine and throughout central NH and northern Vermont were not able to cut softwood at a sufficient enough capacity to feed the sawmills with logs. As the old saying goes “ a logger, here in New England, cannot live on logs alone” . They need a market for pulp to make the whole thing work. the pulp is just too large a component of our forests here. For those contractors who were set up for whole tree chipping – it was a bit easier because they were able to turn their softwood pulp into biomass chips. They may not have liked the price, as its significantly less than the price paid for pulp, but none the less they are able to keep going. This situation led to fairly good prices for both spruce and pine all throughout the winter. In fact some of the highest prices we saw some of the highest prices in years paid for White Pine logs – which pleased many of our clients. However, at the time of this writing most of the softwood sawmills are full and are now restricting deliveries.
The low grade markets for wood were a challenge this winter. As the winter progressed prices dropped and quotas on deliveries were implemented. Despite this , the logging contractors we work with had good working relationships with their end markets that enabled them to keep moving wood – despite the circumstances. The overcapacity of pulp was due in large measure to the of a number of smaller pulp mills in Maine – which in turn led to an abundance of closer ( hence cheaper) wood fiber for those pulp still remaining. The lack of demand for the primary producers for firewood and biomass chips was due to the much higher than average temperatures experienced this past winter combined with the extremely low prices for oil. The reality is when oil is less than $50 a barrel its cheaper to use it for heating than it is to use wood.
With this crazy winter coming to a close we look ahead to the summer months. Its our own assessment that the markets for pulpwood and biomass will continue to be on extremely tight quota, when it comes to deliveries , and the prices will remain low. The logging contractors we work with, have strong enough established relationships and move enough volume that they should be in a decent enough position to weather these challenges. Hardwood logs look to be strong – right on through the summer. With inventories low, as we write, the mills will be looking to paly catch up as soon as the woods dry out and logging commences. This can only benefit those landowners with hardwood saw timber. So, if you have a woodlot with hardwood saw timber to sell, now is a great time to give the experts at Stillwater Forestry LLC a call. We can put together a stress free timber sale for you this upcoming summer. It will make you the income you deserve while improving your forest for the future.