Winter 2023 (Dec. 2023) issue of Pennsylvania Forests

Guest author Thad Taylor shares insights in the Winter 2023 (Dec. 2023) issue of Pennsylvania Forests
(The Pennsylvania Forestry Association’s quarterly publication.)

(photo by Travis Cunningham - Oak Tree)

Whether you fondly recall climbing and playing in a majestic white oak tree in your youth, resting under the shade of its outstretched branches, or watching your local wildlife forage for the prized food source its acorns offer, you or someone close to you recognizes a large white oak tree when you encounter one. This article will share some recent history and perspective related to prices for white oak forest products.

According to the most recent Summary Report of Pennsylvania’s forests, published by the U.S. Forest Service in September, 2023, the volume of white oak sawtimber in Pennsylvania has increased 22% since 2004. Meanwhile, the number of white oak trees has decreased 16% during the same period, a characteristic of maturing white oak forests. According to the report, the trend is similar for chestnut oak in Pennsylvania. You’ve likely read recent articles about demand for white oak barrels, or the changing landscape of tariffs and duties for U.S. bourbon exports and its impact on domestic distillers, or beverage companies’ concern for the sustainability of America’s white oak resource, given how eastern forests’ species composition has continually changed following European settlement. While forest ecology and species dynamics are complex topics, obtaining and analyzing ten to 35 years of forest products pricing data is much more straightforward.

Many of our forest landowners appreciate the rise in white oak timber stumpage prices during the past several years. From 1989 to 2023, prices for northwestern Pennsylvania white oak standing timber have appreciated faster than the price for domestic “green” #1 common grade white oak lumber. It’s important to note our local timber stumpage prices are influenced by a host of global demand factors, including foreign tastes and preferences for interior furnishings, in addition to orders for barrel staves and cooperage.

In the chart to the right, you’ll notice foreign demand for U.S. white oak logs and lumber can move somewhat independently from the domestic price for un-dried (green) white oak grade lumber. Although these white oak products coexist in the same overall global marketplace, price influences for individual products and market segments are nuanced. Therefore, the unit-price for U.S. exports of white oak logs rose in 2022 and 2023, even though its volume fell and the unit-price of white oak lumber exports also fell. The reason is that many foreign hardwood lumber markets react to high prices for white oak lumber by purchasing white oak logs and veneers instead of lumber.

While northwestern Pennsylvania white oak timber pricing was referenced in the first chart, now let’s look at comparative prices across the Commonwealth. You’ll notice the average price in Pennsylvania’s southeastern quadrant is usually higher than that of the other three quadrants. This relate to comparative regional advantages in transportation (proximity to ports and several major interstate highways), terrain, and logging and sawmilling costs – all of which eventually inform pricing and competition for standing timber. And, while these regional average prices are never meant to suggest the precise value of your unique forest property, these trends do help illustrate general market direction, over multi-county areas.

For perspective’s sake, it’s also worth taking a moment to look at white oak timber prices in the context of other timber species. Below, you’ll see how white oak standing timber prices compare to black cherry and red oak, for both northeastern and northwestern Pennsylvania. Despite unimpressive pricing relative to other key species in the early 1990s, white oak standing timber prices have enjoyed handsome improvement over time.

(Click and drag arrow for comparison.)

No matter your region, or the composition of your forest, this article hopefully offers some insight regarding white oak’s position in the market landscape. It’s a terrific reminder that promoting and maintaining species diversity throughout your forest is one of the best strategies for balancing long-term forest health and market relevance.

Permission to Reprint Granted to FORECON Inc
Winter 2023 (Dec. 2023) issue of Pennsylvania Forests

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