Improving Log Markets

Spring 2013

Finally, after wallowing at low levels for four years, the log market has come to life and prices are moving upward! Although log values are far from 2006 historic highs, most species are returning to a price where landowners can feel good about selling timber and addressing the forest health needs.

Many factors are contributing to the amped-up market. Increased housing starts, an active construction, repair and remodel market, and limited imports from Canada are fueling demand, so lumber prices have significantly increased—up 43% in the last year (Random Lengths Index) —which has resulted in sawmills adding production.

On the local level, log buyers are under the gun to increase log flows, and consequently, allow their companies to add shifts. This situation has created aggressive log pricing and more enthusiasm in the market than we have seen for many years. And though recent log prices have shown just modest movement (see the log price table), it is expected that prices will continue to trend upward. Numerous sources are predicting that we will see prices in the mid $400s for Douglas-fir later this spring, and cedar will continue to be hot.

But even with the welcome news of this turnaround, timber owners face harvesting challenges. For example, since the last strong log markets there are fewer loggers and, at times, a shortage of log trucks. A successful harvest will require advance planning to secure a good logger. Attempting to find a qualified logger on short notice will likely be disappointing.

Log prices should continue to trend upward as the economy recovers and the backlog of unsold homes is reduced, thereby providing landowners with opportunities to actively manage their land to ensure a healthy forest and a healthy bank account.

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