Page 15 - Georgia Forestry - Issue 4 - Fall 2021
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Lumber prices have also spiked during the pandemic. Pulpwood prices have improved, but solid wood prices remain stubbornly flat.
“Solid wood product prices took a big drop back in 2008 and just really haven’t recovered,” Griffin says. “We just haven’t seen stumpage prices rise significantly where we’re selling the wood to the dif- ferent manufacturing facilities.”
While Griffin says he “continues to press” the mills, there hasn’t been much movement. Over the past decade, there has been consolidation as foreign and institu- tional investors have purchased many mills. That has changed the business.
While Stone says consolidation among sawmills has taken away competition (which makes it easier for mills to hold the line on pricing), there is also an oversupply of trees, a commodity item. The problem began when construction slowed during the global financial crisis. He estimates that it will take seven to 15 years to work through that backlog.
“There are more trees now than there ever have been,” Stone says. “Therefore, there’s more raw material out there for them to choose from. They control the price.”
The competitive environment has changed, with mills selling their land to timberland investment management organizations funded through pension funds or institutional investors.
“It’s a lot of competition, and you have to be savvy,” Griffin says. “You have to reach out and touch a lot of people to build networks and relationships that in turn build trust.”
Fortunately, over their almost 100 years in business, Superior Pine’s leaders have built durable relationships that should help the company navigate climate issues, low prices or any other challenges that lie ahead.
“I’ve been working with [Supe- rior Pine] through three different presidents,” Nimmer says. “To this day, I would say that you could trade with them without a contract and without a lawyer involved. You can just shake hands. Their word is their bond.”
LES SHAVER IS A BUSINESS REPORTER WITH MORE THAN 20 YEARS OF EXPERIENCE. HE HAS WRITTEN FOR A NUMBER OF PUBLICATIONS AND COVERED A VARIETY OF INDUSTRIES, INCLUDING DEFENSE, AUTOMOTIVE, COMMERCIAL AND RESIDENTIAL REAL ESTATE.
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