Since the last newsletter, we have seen record setting rainfall during the early summer of 2006, and 50-degree days during the month of December.  This unusual weather has an impact on the timber market, but the affects vary based on region.

Generally, prices for white pine have decreased except for in the Maine region, however, this needs to be kept in perspective as prices for white pine and red oak were at all time highs in 2004.  There is a debate as to the cause of the lower white pine prices.  Some will say that it is due to slower housing market, while others will say that the prices are simply self-correcting to where they should be.

Higher fuel prices have obviously increased operating costs, which in turn will affect stumpage prices.  Higher operating costs have not been off-set by higher gate prices, therefore, the difference tends to be made up by lower stumpage prices.

High quality sugar maple and black cherry are still in high demand, and red oak appears to have stabilized after dropping from the 2004 record highs.

Foreign competition and weather are playing havoc with mill inventories.  What was considered a low inventory in the past, may now be considered an acceptable inventory level.

The closure of the Berlin Pulp Mill has certainly had a ripple effect on the chip market; however, the opening of the Portsmouth, NH plant has helped to reduce the effect.  Firewood is still in demand; however, firewood demand cannot completely replace the market lost due to the closing of the Berlin mill.

The next 3 to 4 years will be very telling for the timber industry.  Smaller mills tend to be closing while the bigger mills are getting bigger.  Overall, the capacity to produce lumber has not been affected; however, it is more concentrated in fewer, more productive and efficient sawmills.

It is expected that for the first part of 2007, timber prices will stay pretty stable; however, if fluctuations occur, they will occur quickly.



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- Last updated on 19 August 2008-
New England Forestry Consultants, Inc.
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