Southern timber prices rose in final months of 2003
ALBANY, Ga. (AP) — Prices for Southern-grown timber increased to their highest levels in nearly three years during 2003’s final quarter, but experts aren’t sure if it was simply a market blip or the beginning of an upward trend, a consultant says.
Marshall Thomas, president of Albany-based F&W Forestry Services Inc., said prices for all timber products increased 5 to 10 percent over the previous quarter. F&W provides sales and management service to private timberland owners in 10 Southern states.
The increases are based on sales of pulpwood and saw timber at 11 locations in Alabama, Arkansas, Florida, Georgia, the Carolinas, Texas and Virginia.
“The economic things that affect stumpage prices are looking better now,” Thomas said. “The economy is healthier, the dollar is weaker, which benefits all manufacturers … and the weak dollars is also impacting Canadian dumping down here.”
Bob Izlar, director of the University of Georgia’s Center for Forest Business, said low prices in recent years dealt a serious blow to the industry.
“It’s been brutal, from the tree that the tree farmer grows all the way to the multinational corporation that’s trying to sell a product made from the tree — lumber, plywood or pulp and paper,” he said.
Forestry is one of the Southeast’s top industries and the region leads the nation in timber production. Unlike other areas, most of the Southern timber is grown on private land.
“In Georgia, South Carolina, Mississippi, Louisiana and parts of North Carolina, it’s a huge factor in the economy,” Izlar said.
Tree farming is Georgia’s top agricultural industry, supporting 170,000 jobs and generating a $25.4 billion economic impact, according to the Georgia Forestry Commission.
Thomas said the recent slump was the worst he’d seen in years.
“A lot of loggers went out of business,” he said. “A lot of landowners held their wood off the market. The ones who did sell received greatly reduced revenues from what they were getting five years ago.”
The slump also eliminated an incentive to thin forests of inferior trees at 10 to 15 years — usually a source of revenue before the remaining trees reach full “economic maturity” at 25 to 35 years, Thomas said. Thinned trees are sold for pulpwood.
“It’s turned intermediate thinnings from a fairly decent source of cash … to an almost marginal source,” he said.
The thinnings allow more sunlight to reach the forest floor, creating a better environment for wildlife and outdoor recreation, he said.
Thomas said he hopes a recent decision by the World Trade Organization will help keep the price momentum going.
The WTO upheld steep antidumping tariffs that the United States had imposed on softwood lumber imports from Canada.
The United States imported nearly $6 billion of softwood lumber from Canada in 2002, about a third of the American market.
When U.S. officials conducted an investigation, they found that Canadian lumber was being sold at prices below the cost of production, a practice known as dumping.
U.S. and Canadian officials are continuing talks aimed at resolving the trade dispute.
“I’m a free trade guy, but it has to be fair,” Thomas said. “When they (the WTO) came back and said, ‘Those guys are sticking it to you,’ it made me feel better about our position.”
Thomas said the dumping is continuing, but at least the weaker U.S. dollar makes U.S. producers more competitive.
“It will be interesting to see if the improving economy and the weakening dollar can work together to hold prices up in the coming spring and summer,” he said.