Forest2Market Monthly News

July Poll

In the current market, what is most affecting log price in your region?
Trade policies
Supply of logs
Demand for lumber
Results From June's Poll

Based on forest inventory data available in SilvaStat360, U.S. forest growth currently exceeds removals. What is the situation in your area?
The Disconnect Between Log Prices and Lumber Prices in the US South

By Joe Clark
Southern yellow pine (SYP) lumber prices are at record highs. While this trend is benefitting southern sawmills, many timberland owners operating in the US South are asking the obvious question: Why are log prices in local markets not reflecting those of a surging lumber market?

Log Prices in the US South vs. the Pacific Northwest

By Joel Swanton
In a recent blog post, we discussed the disconnect between log and lumber prices in the US South. While Southern yellow pine (SYP) lumber prices are at record highs, log prices in local markets are not reflecting the surging demand for lumber. In fact, sawtimber prices have remained flat to declining in certain markets throughout the southeast since the economic crisis of 2007. But the situation is very different in the Pacific Northwest (PNW), another timber-rich region of the US.

Southern Yellow Pine Lumber Prices Spike to Record High in June

By John Greene
Just as quickly as southern yellow pine (SYP) lumber prices spiked to a new record high of $576/MBF in early June, they retreated in week 24. Forest2Market’s composite southern yellow pine lumber price for the week ending June 15 was $553/MBF, which is still an extremely high price compared to recent history. Week 24’s drop represents a 4% decrease from the previous week’s all-time high of $576/MBF, and a 44% increase from the same week in 2017.

Sawmill TQ: A More User-Friendly and Timely Sawmill Benchmarking Service

By Bryan Beck
Sawmill benchmarking allows mill management to objectively identify competitive strengths and weaknesses and opportunities for improvement in key areas such as productivity, sales realization, log to lumber recovery and manufacturing costs. When a mill facility’s internal data is compared to actual data from similar mills, mill management, sales, and procurement staff can then begin to fine tune operational and procurement strategies to improve performance and increase profit.

British Columbia Log and Timber Supply Update

By Kéta Kosman
In May, Madison’s was invited to attend and present at the Forest Resources Association (FRA) Western Regional Meeting at Harrison, British Columbia (BC). The meeting was attended by a number of forest operators in the Pacific Northwest (PNW) from both sides of the Canada/US border. A lot of the meeting’s focus was on the coastal areas, but there were significant updates on the situations in BC’s interior, Washington, Oregon, Idaho and Montana.

Canada Pushes Back, Announces Duties on US Wood Products Imports

By John Greene
Nearly a year after the U.S. Commerce Department announced duties on imports of Canadian softwood lumber, the ongoing global trade saga continues in the wake of the G7 summit in early June. In recent weeks leading up to the summit, President Trump announced new tariffs of 25 percent on steel and 10 percent on aluminum imports from Canada, Mexico and the European Union. Canadian softwood lumber producers have been paying duties on their shipments to the US for nearly a year, spending more than $200 million in 2017, and hundreds of millions more is expected in 2018.

Eucalyptus Price Trends in Brazil

By Marcelo Schmid
In August 2017, I wrote a blog post on the wood fiber market in the Brazilian state of Minas Gerais and concluded that it would face a shortage of wood in the near term. The article hit a nerve within the regional forest industry because the statement contradicted the widely-held, "common sense" belief at the time: that there was a surplus of wood in the Minas Gerais market, and new forest investment in the state would likely not pan out.

Pennies Matter: What Does a 1% Supply Chain Savings Look Like?

By Pete Coutu
We often evaluate performance by determining whether a particular process, product or service is in the top quartile or top 10 percent of its peer group. Benchmarking, in this respect, is an effective way of evaluating current performance. But how do we take top-tier performance to the next level and achieve truly superior performance? By focusing on the details, on the pennies, and on incremental gains. In the raw material supply chain, how does a company gain an additional 1% in efficiency to reduce cost? With the application of reliable, granular data.

US Housing Starts Reach 11-Year High in May

By John Greene
US housing starts surged to an (almost) 11-year high in May—their highest level since July 2007—thanks to gains in both single-family and multi-family home construction driven by the Midwest region. However, the risk of escalating trade wars has recently spooked Wall Street as well as the housing sector; May denoted the second straight monthly drop in new building permits, which suggests that housing market activity may be flat lining.

US Forest Industry Performance: May 2018

By Joe Clark
Total industrial production (IP) rose 0.7 percent in April (+3.5 percent YoY) for its third consecutive monthly increase. After modestly negative annual adjustments to IP published in March, the rates of change during prior months were revised further downward, on net, by 1PP; for 1Q2018, output is now reported to have advanced at an annualized 2.3 percent (previously 4.5 percent).