11/30/2007
Lumber Prices Not Expected to Recover Before Late 2008.
Reuters today summarizes the findings of a number of analysts who expect lumber prices to remain suppressed well into 2008. Some analysts suggest that the slump in the U.S. housing market could begin to turn as early as mid-2008. Recovery in lumber prices is expected to lag this indicator, however, given the oversupply in housing stock that is expected to persist. The article also notes that the October cash price for SPF reached $220/thousand board feet, a historic low when adjusted for inflation.
11/26/2007
Declines in Housing Starts Lead to Mill Closures, Downtime, and Timber Sales without Bids.
Linking declines in timber prices to the decrease in housing starts, the Seattle PI reports that Northwest mills are scaling back production and some Forest Service proposed timber sales have gone without receiving any bids. As a result, there are concerns that harvest volumes and timber revenues will fall below target levels at least until 2009. Similar concerns are leading to mill closures in B.C., the Vancouver Sun reports. They note that the combination of factors above is compounded there by the weakness of the US dollar, with every one percent gain in the value of the Canadian dollar results in a loss of $170 million (CDN) to the B.C. forest industry.
11/21/2007
Loggers on Forest Service Land May Qualify for One Extra Year to Pay Off Contracts.
Florida Congressman James Oberstar announced Monday that the Forest Service will allow an additional year for loggers to pay off contracts to log on USFS lands. The congressman notes that this decision was made in response to the downturn in the housing market, as many of the contracts were let during periods of peak demand for lumber. Loggers are advised to contact their contracting officer to determine if they are eligible for the contract extension.
11/20/2007
Changing Estimates of Stand Damage Related to Hurricane Katrina.
In recent reporting by CBS news, Wayne Tucker of the Mississippi Institute for Forest Inventory argues that damage estimates produced by the University of New Hampshire and Tulane overstate the damage resulting from the storm. That earlier study relied primarily on remote sensing data, while MIFI established over 150 randomly located survey plots for on the ground measurement. They propose that early estimates of over 3 billion board feet of lost production, and that the actual quantity of storm damaged timber is much closer to 1 billion board feet. The article also notes that federal funds allocated for replanting have only started to be disbursed, largely due to problems with the compensation model being used to evaluate landowner's losses.
11/19/ /2007
Significant Declines in Softwood Mill Numbers Yet Overcapacity Problems Remain.
The USFS Forest Products Laboratory reports that the number of large permanent softwood lumber mills in the US has declined from 1311 to 990 over the last 15 years, while employment has declined from 115k to 93k jobs during the same period. Updating their 2005 research, the report titled "Profile 2007: Softwood Sawmills in the United States and Canada" documents 19 million m3 in unused capacity in these remaining mills. This overcapacity problem is projected to continue due to cyclical downturns in housing, while the potential for positive long-term improvements for Southern Producers are seen as mountain pine beetle outbreaks continue to impact production in the western states and British Columbia.
11/16/ /2007
Beetle Killed Stands Create Opportunity for Small & Non-Traditional Businesses
The Denver Post reports that a surge of Lodgepole pine moves onto the market following damage from the Pine Bark Beetle, alternative uses ranging from cabinetry products displaying blue-stained lumber to biomass plants and wood-pellet fuel production are picking up some of the excess. In the face of continued Canadian price pressure on traditional products, significant investments are being made in log-home production facilities and pellet plants. The article notes that although there is growth and investment in these sectors, the supply of small-diameter beatle killed wood continues to outstrip demand.
11/13/2007
Slight Uptick in Prices Does Not Help Canadian & U.S. Producers
According to G. HOEKSTRA. of the Prince Goerge Citizen,
there has been a slight lumber price increase in the wake of
mounting temporary sawmill closures in Canada and the U.S.,
but nothing in the order of magnitude that would make mills
profitable, industry observer L. Cater said Tuesday. "I
don't think anyone's making any money," observed Cater,
the publisher of Madison's Lumber Reporter in Vancouver. Even
though prices have improved slightly, lumber producers in Canada
are still facing a high Canadian dollar and low prices. Lumber
producers are also required to pay 15 per cent export tax on
shipments to the U.S., the B.C. Northern Interior's major market.
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