Did ya miss us? 😊 It’s been quite a while since we’ve published a lumber market update. No real good excuse for that, only that we had gotten EXTREMELY busy accommodating an extraordinary amount of service requests for timber sales, inventories, and appraisals – all because the hardwood market was so robust! Overall, that’s a good thing, but our apologies for the lapse in coverage of what has become a significant time period for hardwood timber in our operating areas.
After a market lag during most of 2020 primarily due to COVID-related restrictions, we began to see a significant increase in demand for hardwood stumpage in early 2021. Some of that was attributed to export markets getting back on track, and some was attributed to domestic demand increasing for furniture, flooring, moldings, and cabinetry; it seems the “work-from-home” mandates influenced a revival in home office updates and general home remodeling. This market uptick has been clearly evident in our hardwood lumber markets, as they are tracked systematically on a weekly basis among a wide geographic area.
It is evident (see chart below) that the markets have been on the increase over the course of the last year. Since January 29, 2021, every species being tracked by the Hardwood Review (www.hardwoodreview.com) has had some sort of increase occur, with cherry and basswood seeing the most anemic of changes (38% and 24%, respectively), while white ash (87%), hard maple (72%), soft maple (54%) and hickory (56%) have seen the most significant upward changes. Red oak has seen a more tempered change (31%), as has poplar (46%).
As for the low-grade markets, every category previously tracked have all seen significant increases over a one-year time period as well; pallet lumber (70%+), cants (75%+), railroad ties (25%+), and frame stock (40%+).
As mentioned above, these lumber markets have pushed stumpage markets higher. Though occasional bottlenecks continue to occur, stumpage sales continue to be successful, with quality timber selling very well across almost all of the main species.
Key Market Comments – General Observations
The Hardwood Review (www.hardwoodreview.com) provides excellent commentary on our hardwood lumber markets. The latest issue (January 28, 2022) indicates that a variety of industry contacts had reported that 2021 “was a record year for sales and profits, and 2022 has started strong for most.” One of the most pleasant “surprises” was that it wasn’t just one or two species that performed well – the price of nearly every hardwood species improved, and some significantly.
Some mills are still experiencing labor shortage issues, while others have seemed to find a workable balance at the moment. Its been reported that “log supplies have generally improved across the Appalachian region,” as logging conditions have improved due to a cold streak that has helped stabilize skidding and transportation circumstances.
There are some reports that black cherry is beginning to stabilize a bit, and ash demand continues to climb, as does the demand for hickory. Hard and soft maple continue to see solid demand, though lumber pricing has seemed to level off in the last several weeks, as has poplar. Red oak prices have flattened as well, but white oak demand is still robust. Furniture and cabinetry sales remain strong, with the downside to sales not being tied to available lumber as much as the shortage of cabinet hardware supply. Housing starts, for the most part, remain steady and strong. We continue to remain optimistic that 2022 will be a very good tear for our hardwood markets!
The chart below presents lumber price changes by species over the period of January 29, 2021 through January 28, 2022 in terms of percent change versus actual quoted dollars. Since actual pricing can vary slightly from one reporting source to another, we feel this is the best way to illustrate what the market is doing over time.
As steady demand continues, bid sale activity remains active and the sales of high-quality timber are bringing good results. If you are interested in selling your timber, or just have questions about the process or even where to start, don’t hesitate to give our foresters a call. Please be patient as the demand for timber sales services continues to be quite high!