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Log Prices & Trends – November 2016

By Steve Bowers, OSU Extension – Timber Harvesting Specialist

Holy raindrops, Batman! All the talk about drought these past couple years and we have a record rainfall in October. That would be a good news/bad news scenario. The good news is it caused the local mills to scramble for wood in what is typically a reasonably dry month. Bad news is landowners couldn’t access their wood through the mud puddles.

More of this good news/bad news stuff: Doug-fir values saw very little change in price the past year or so. The ever-present decline in values for the summer months did occur, but changes were so insignificant that we have, for the most part, seen values flat-line these past several months. The prior 2 seasons, variances in Doug-fir prices was over a third. This year, we’ve seen changes in the 7-8% range. Good news for you warm-weather loggers.

So why no big swings these past several months? Election cycles often make individuals pause for reflection. Depending on the outcome, businesses attempt to read the tea leaves and act accordingly. In regards to our recent election results, it might be construed that a more business-friendly administration now controls things and business might be on the upswing. But behavioral economics (emotions, not actual economic indicators) can take us only so far. Real economic indicators have to be in place to see sustained supply and demand for our wood products and the verdict might still be in deliberation.

So we think log values are going to remain in a somewhat holding position until everything shakes-out. During the summer, Doug-fir values in Lane County were in the $650-$675/ MBF range for long logs. We said it before, but it warrants repeating: over the past few years, we’ve seen premium values for the “long log” go from 32 feet to 36 feet in a number of mills: longer logs, more taper – less scale, more lumber. At the time of this report, Doug-fir is in that $675-$685 range with 2saw running near $700/MBF. Count on short logs being $100-$125 less.

When Mary’s River in Corvallis closed their doors last year, we lost our only local cedar buyer. However, we do have a sort yard with locations in Philomath and east of Eugene, so all is not lost. And believe it or not, if a person had some volumes of large diameter, clean wood, they could consider trucking it to Washington. Long-log cedar (there’s that 36 foot thing again) is running in the $1150/MBF range. Short log values decline significantly. Redcedar has been strong, is strong, and will likely stay that way for the foreseeable future. And buyers are actively seeking these logs.

12”+ incense cedar values in Douglas County mills is running close to $700. Drop down to the 6” – 11” log and you’ll see values about $150/MBF less. Incense is being purchased in the valley, but at lower values than Douglas County roughly in conjunction with the cost of trucking it to the Roseburg mills. Again, incense is in demand.

Hardwoods have been relatively steady of recent months. A visit to the hardwood mill here in Eugene and you see some sparse inventories due to the heavy rains and steady demand. Camp run alder is running a little better than $500 or just over $70/ton: your choice. Buyers are seeking alder at the current time.

Chips. Why do you ask? Today, there is an excess of chips, both conifer and hardwood. Local buyers are paying in the mid 20s for conifer chips, pretty-much a mere residual from a timber harvest. Values might be a few dollars more north of here, but trucking costs more than eat up the difference. Better to stick with firewood, but we are seeing somewhat of a decline in firewood values due to excessive supply (a lot of folks are out of work and cutting firewood) and demand is falling-off, particularly new homes and the fact certified stoves are a prerequisite to insure your home.

Export values are basically on-par with domestic prices, but remember, you need long-logs and somewhat larger diameter requirements. The 2saw type log is the one folks are seeking and it is tough for them to compete with local mills if in proximity to the harvest operations (trucking trumps any increase in value). Like we say all the time: there’s a good chance the closest mill will be the best mill.

One last report. Poles have declined ever-so-slightly. Historically, pole values are a steady-eddie in large part to the increased time between harvest and end-use. Poles less than 70 feet are bringing in the $800+/MBF range and 70’+ material is just under $1000. Remember, there is some competition in the pole market, so make sure you check them out. Basically, one will pay a little more, but with somewhat tighter requirements and the other a little less, but a lesser quality log can make-the-grade.

There you go. Values are pretty good at the current time, but I don’t think I’d hold-out for too much more. After the holidays and the new-year, we might see a harbinger of future values. The past couple years log values have peaked sooner than previous years (January/February versus March/April). Look for a return to the good-ol-days. If not, contact your local agent and give ‘em the what-for.

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~ by grandl on November 15, 2016 .



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