Well, Spring has sprung – and as the biological process of tree growth begins again in our hardwood forests, we are still hoping to see some “growth” occur in the market demand for some of our more valuable hardwood species as well. Not to sound like the proverbial broken record, but as the months of 2019 roll by, we are still waiting on a resolution – or at least some progress toward resolving – the US trade dispute with China that has been going on for almost one year at this point. However, despite what seems to be consistently mediocre news about hardwood price trends over the last 9 months, there are some bright spots on the horizon, and a quick recap of 2018 may help set the stage for what lies ahead.
The March 29, 2019 issue of the Hardwood Review Weekly (HRW) publication (Volume 34, Issue 28) reports that, despite the significant drop in Chinese demand (as well as other export markets), 2018 was still a good year for the US hardwood industry as it ended up being the second strongest export year on record. Though hardwood exports were down approximately 9% from 2017, 2018 saw export volumes totaling about 1.73 billion board feet – pretty impressive given that Chinese demand tailed off significantly for the entire second half of the year.
The HRW also tells us that there are some “early signs of improvement in the Southern region” which is usually a bellwether for a general nationwide improvement (though our Appalachian and Northeastern US markets are still sluggish.) Of positive note is that Chinese “inquiries” for southern products is beginning to increase again, and in general, a survey of the industry done by HRW leads to its prediction that “export sluggishness will wear off by the second half of 2019, and that domestic demand will be steady.” We are certainly hoping that is the case.
The Appalachian Hardwood Region (basically OH, WV, PA, and southern NY) is currently witnessing better log supply conditions but, ironically, that is creating a labor shortage for some mills (since some downsizing had occurred due to the decrease in demand). That aside, Ash log prices have softened a bit and it is believed that the enormous amount of ash that has been harvested in advance of the Emerald Ash Borer is finally reaching its optimum supply level. Despite that, ash lumber prices have increased slightly since the beginning of the year and are now currently holding steady. Cherry has continued to slide, largely due to the continued softening of demand from China. Hard maple prices continue to be steady and strong, and some buyers have reported that they expect demand to begin increasing even more so before the summer months arrive. Soft maple is getting mixed reports, with some buyers saying its supply is still limited but improving due to weather conditions starting to cooperate, and others saying that they’ve had some trouble recently selling their supply on a consistent basis. Red oak prices have remained somewhat steady since their February decline, and mixed messages for both increased demand and over supply are being reported at this point.
The two graphs that follow (Lumber Prices by Species and the Index of Selected Species Lumber Prices) demonstrate the swings we are seeing in the hardwood markets that are continuing through this year so far. The top graph will show individual species trends, and the lower graph show the composite index of lumber prices for all 5 species in equal proportion.
With fluctuating markets still the norm in our hardwood region, landowners can still benefit from sound, professional advice from foresters who know the local markets. Please call any of our foresters if you are interested in selling your timber – you will be glad that you did!
As always, if you have timber you may be interested in selling, and want a long-standing professional forestry firm representing your best interests in the process, please don’t hesitate to call any of our FORECON offices. Our foresters would be very happy to speak with you about the markets, and more importantly, your goals and objectives for your land.