Page 19 - Tree Line - North Carolina Forestry Association - Fourth Quarter 2020
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Though we are more than a year removed from the weather challenges of 2019’s first quarter, the prevailing sense of uncertainty is now having a similar effect: Many procurement teams simply aren’t actively buying nearly as much timber because they don’t have a clear indication about future demand trends for end products.
Stumpage prices across North Carolina are once again suppressed as demand is poised to remain subdued for the next several months.
• Sawtimber: Despite record-high prices for many finished lumber products, the situation is really a result of the market being caught off guard. As noted above, the enormous drop in demand that so many forecasted never really happened, and mills that remained open through the lockdown ran at capacity to meet strong demand. Prices for sawtimber crept down in the second quarter, suggesting that there was plenty of available supply for those manufacturers able to run through the worst of the uncertainty.
• Pulpwood: As the nation scrambled to buy a year’s worth of toilet paper in the early spring, demand has not been an issue for pulp markets. In fact, pulpwood harvests from southern timberlands have increased as manufacturers have tried to keep production levels high and consuming pulp/paper mills have looked to offset the decrease in residual chip supplies typically generated from full production sawmills. While demand has been strong, there has also been ample supply, which has kept stumpage prices in check.
Timberland owners are now dealing with three challenging dynamics:
1) repercussions of the oversupply of both sawlogs and pulpwood that date back
to the Great Recession; 2) slack demand
in the current market, which is keeping downward pressure on prices, and;
3) near-record levels of market uncertainty and a high-stakes election on the horizon.
Many landowners simply pulled their tracts off the market during the Great Recession in hopes of riding out the worst of the downturn. We know this move directly contributed to the oversupply that has kept prices low over the last decade. With timber margins poised to get thinner
Fayetteville Technical Community College
Landowner Services
We consult closely with landowners and develop and carry out detailed plans to achieve their goals.
Harvesting Services
With our stable of trusted contract loggers, we expertly arrange the perfect team for all harvesting jobs.
Buyers of Land and Timber
As renowned timber management experts, we are pleased to advise landowners about their timber resources.
Our vast network of mills and our timber marketing experience helps us maximize landowners’ stands.
Managing Services
Timber Marketing Services
4311-D Ludgate St., Lumberton, NC 28358 910.739.2885 or 866.847.2250 Lumberton, NC Division • 910.739.2885 Augusta, GA Division • 706.650.7650
ncforestry.org / FOURTH QUARTER 2020 17
