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Log Prices & Trends – May 2017

By Steve Bowers, OSU Extension – Timber Harvesting Specialist

The spring “Log Prices & Trends” has always been my favorite report. It’s the old “hope springs eternal” thing: this is the year we’re gonna make-it. This will be the summer when prices are at their zenith versus nadir … come-on-baby let the good times roll!

Well, I got good news and I got bad news. Bad news: while things are looking pretty good at the moment, nothing lasts through the summer. Good news: this is the last Treeman Log Prices & Trends and more capable hands will be guiding you from here-on-out. Such sentimentality, so we best proceed.

Doug-fir has been north of $700 for the past few months and it looks as if it’ll remain at these levels at least beyond the time you’re reading this report (a change from the past few spring issues). We’ve seen values up to $750/MBF at select mills and a person could still garner this kind of money with a little more volume and a better-quality 2 sawlog. The further north you go, the better the prices, but not at levels the average landowner could recover trucking. Like we say: there’s an excellent chance the closest mill will be the best mill.

Reasons for better money north involves export values to a large degree: the closer you get to Longview, the better the chance export values can compete with domestic mills. Export remains competitive with that larger diameter/better quality #2 Sawlog. The past few years, we’ve seen many domestic mills requiring a 36’ log versus 32′ in order to obtain a premium price for “long logs.” These length requirements pretty-much parallel export specs, thus the decision on selling export versus domestic is more a function of trucking distance and $/MBF rather than more volume/less money for domestic versus less volume/more money for export.

White woods are also in demand, but at significantly lower values than their Df counterpart, being valued in the mid-$500 range. And remember, the large diameter hemlock/grand fir is in less demand than the 6-11 inch log. And while we’re bottom-trolling here, chips remain below $30/ton, though they have risen one or two dollars/ton from our last report. So stand improvement will likely remain a below-cost operation.

Incense cedar prices remain steady. Douglas County is the final destination for much of the incense in the area and they are paying close to $700 for a 12” long log and $100 less for under 12”. Sellers can opt for a sort yard in the mid part of the valley, get less/MBF, but save on trucking. The decision then becomes pretty site specific, with trucking being the deciding factor.

You cannot say that for redcedar. Mills south of here are buying redcedar, but values are less and trucking is nearly as much as if you were hauling to northern destinations. And like Doug-fir, the further north you go, the better the prices. Sort yards here in the Valley are paying $1350/MBF for long logs. That is about $50 higher than our last report. Redcedar is worth some bucks, but remember the concept of elasticity of demand: substitutes (incense cedar for one) will replace redcedar if values get too high, so things might get a little better, no one can say for sure, but we can say for sure there is a ceiling for any commodity. We witnessed this when eastern birch replaced red alder some years back. We’re now seeing this in fencing boards with incense and Doug-fir now being made available in-place of redcedar.

Poles remain steady and in demand. Shorter poles (less than 55’) are at $850/MBF and “transmission poles” (greater than 75’) are right at $1000. Remember, poles have specific requirements, so don’t do any cutting prior to seeing a buyer. And another thing: you’re roads may not be able to accommodate moving this material. Longer/wider curves, both horizontal and vertical clearance, is required to get them out of the woods. There’s always something…

Prices and trends for this spring have been closer to those of a number of years ago versus the past 3 or 4 years. The recent past has seen Doug-fir values reach their peak in late January or February, then a precipitous decline to fairly stable summer values. By the time you received the spring report, it was already too late. Not this year, but we cannot guarantee how long it will last.

We can say that the business environment coming from Washington is better than it has been in the past. And we are also a big believer in behavioral economics: if people believe it, there’s a chance it will happen regardless of actual quantitative parameters (real numbers). But with that said, keep in mind the big picture: we have a ton of debt – public and private, and wages have been stagnant for years. The resources are not there for a sustained and rising housing market, so act while you can. Summer prices are looking ok at the moment, but we would not bet on them improving over what you see in this report. Thank you … good luck to all … we’ve got a few stumps to make, so time to get to some “real” work!

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~ by grandl on May 15, 2017 .



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