Continuing the strong demand trend from 3Q2021, the weighted average price for southern timber once again surged to a new 14-year high in 4Q. Stumpage prices were up +5 percent quarter-over-quarter (QoQ) and +21 percent year-over-year (YoY). The last time Forest2Market’s Southwide weighted average stumpage price was this high was in 4Q2007, just before the onset of the Great Recession.
In 4Q2021, Southwide pine pulpwood prices declined -7 percent QoQ despite two of the three regions experiencing price increases for this product. Prices in the East-South inched down -2 percent, but prices in the Mid-South rose +10 percent while prices in the West-South jumped +17 percent.
However, hardwood pulpwood was the real standout product in 4Q, and demand was strong in all three regions as Southwide prices were up +38 percent QoQ. Prices in the East-South were up +5 percent, +74 percent in the Mid-South, and +19 percent in the West-South QoQ.
On a Southwide basis, pine chip-n-saw (CNS) prices dropped -15 percent QoQ as prices for this product decreased in every region. Prices in the East-South were down -10 percent, prices in the Mid-South dropped -11 percent, and prices in the West-South ticked down -1 percent QoQ.
Conversely, Southwide pine sawtimber prices jumped +14 percent QoQ as prices for this product increased in every region. Prices in the East-South were up +5 percent, prices in the Mid-South surged +22 percent, and prices in the West-South jumped +7 percent QoQ.
After experiencing an uptick in 2Q and 3Q2021, Southwide hardwood sawtimber prices reversed course in 4Q and dropped -5 percent. Prices in the East-South were down -21 percent and prices in the West-South dropped -39 percent. However, prices in the Mid-South surged +26 percent QoQ.
Total precipitation across the South was well below normal in 4Q2021, which provided some relief for harvesting operations in certain areas that were washed out by constant rainfall in 3Q. Even though we’ve just kicked off 1Q2022, precipitation levels have already increased markedly in recent weeks—especially in South Carolina, Georgia and Alabama. If the trend continues, it could limit harvesting activity and timber availability for the remainder of 1Q, which would apply upward pressure on stumpage prices.
Finished lumber prices surged in 4Q2021 due in part to pinched trade flows from Canada. Per Forest2Market’s southern yellow pine (SYP) lumber price composite, prices jumped to $1,008/MBF in 4Q, which is significantly higher than the historical floor price of roughly $350/MBF. Demand for pine sawtimber remains strong, however, as southern mills continue to run at a rapid pace to fill orders and take advantage of the high prices.
While the regional timber market has been oversupplied for a decade, stumpage prices across the South continue to inch higher on a QoQ basis. Southern timber prices are likely to remain volatile in the coming months. If you are not a subscriber to our Stumpage 360 database, now is the time to stay ahead of your local market with the power of transactional data.