Timberland Investment
90.0K views | +44 today
Follow
Timberland Investment
Timber Industry | Deals & Transactions | Investment Rationale | Financial Performance | Investors | Asset Managers
Curated by Sam Radcliffe
Your new post is loading...
Your new post is loading...
Scooped by Sam Radcliffe
Scoop.it!

US South Stumpage Price Trends by Region: July/August 2016

US South Stumpage Price Trends by Region: July/August 2016 | Timberland Investment | Scoop.it
Stumpage prices during July/August were a mixed bag, with all softwood products dropping slightly along with hardwood pulpwood. Hardwood sawtimber was the lone product that experienced a small gain in price. On a Southwide basis, pine pulpwood, pine sawtimber and pine chip-n-saw fell slightly during July and August. Hardwood pulpwood had the biggest drop of -5 percent, while hardwood sawtimber saw modest a gain of +1 percent. 
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

US Regional Roundwood Prices Trend Down in 1H2016

US Regional Roundwood Prices Trend Down in 1H2016 | Timberland Investment | Scoop.it

Despite some disparate regional data, delivered prices for roundwood followed a general downward trend based on Forest2Market’s 1H2016 data. Favorable weather conditions and low fuel costs during the last four months have freed up supply and nudged prices lower. With the exception of the Northeast/East Canada region, supply has not been an issue on a national basis. The following data compares 1H2016 price averages to the same period last year for our four primary operating regions: US South, Pacific Northwest (PNW), Lake States and Northeast/East Canada.
***
Delivered prices for conifer pulpwood decreased in all regions, while supply results were mixed. The Northeast/East Canada market experienced the largest decline, primarily due to mill closures throughout the region.
***
Hardwood pulpwood market performance generally mirrored conifer performance; delivered prices decreased in all regions while supply results were mixed. The largest price decreases occurred in the Northeast/East Canada and Lake States regions.
***
US South sawtimber markets in 1H2016 declined compared to a year ago. Lumber prices were depressed by roughly $36/thousand board feet (MBF), equating to a 10 percent decrease during 1Q2016 that put further downward pressure on sawtimber prices.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

A Look at Lumber Prices and a Timber ETF

A Look at Lumber Prices and a Timber ETF | Timberland Investment | Scoop.it
The Guggenheim Timber ETF (NYSEArca: CUT), which features exposure to global companies that own or lease forested land and harvest the timber for commercial use and sale of wood-based products, is off 6.5% year-to-date. If some predictions about lumber price declines are accurate, CUT could be in for some more trouble.

Lumber prices have been strong to this point in 2016 and although the commodity is overlooked relative to gold or oil, it is viewed by some savvy market veterans as an accurate gauge risk appetite and sentiment. The problem for CUT and timber stocks is that lumber prices could be turning lower.

“The relative weakness has triggered a bearish crossover between the MACD indicator and its signal line (shown by the red circle), which could be an early indication of a move toward the long-term support of the 200-day moving average ($257.98). Bullish traders may want to remain on the sidelines for the next several weeks to see if the support levels near $260 can hold,” according to Investopedia.

The improved housing number provides support for the timber market as home construction makes up 40% of U.S. lumber demand. Consequently, traders and analysts believe the recent surge in housing activity could extend the rise in lumber prices.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Value of productive forestry land jumped 13.5% in 2015

Value of productive forestry land jumped 13.5% in 2015 | Timberland Investment | Scoop.it
Sales of UK investment forestry have increased three-fold in the past five years to £137m, according to a joint report by Savills and Scottish Woodlands.

The average value of productive forestry land increased nearly 13.5% in 2015 year-on-year to £8,615/ha.

Prime spruce plantations are still fetching top prices but the market is becoming increasingly segmented, say agents.

Nearly 52,000 acres changed hands in 2015, but like farmland, factors such as location and access are having a more significant bearing on prices paid than before, as well as timber species and plantation age.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Global timber market prices continue to decline

Global timber market prices continue to decline | Timberland Investment | Scoop.it
Prices for global timber have declined dramatically over the past two years with the Global Sawlog Price Index (GSPI) falling 21.6%, according to Wood Resources International. Challenges in the global market, from Asia to Europe, putting a damper on demand include a variety of fundamental economic issues as well as the strengthening U.S. dollar.

For the fourth quarter the GSPI fell 4.8%. Prices have fallen the fastest in Europe with the European Sawlog Price Index (ESPI) dropping to its lowest level, US$91.00/m3, since the first quarter of 2009, says Wood Resources.

The U.S. lumber market continues to grow, however, with consumption up nearly 5% and import volumes were also 10% higher. The strong domestic market along with weaker demand from Asia could also mean lower prices for U.S. consumers as availability increases.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Roundwood Price Update: YTD US Regional Report

Roundwood Price Update: YTD US Regional Report | Timberland Investment | Scoop.it

Conifer Pulpwood

Delivered prices and the supply of conifer pulpwood increased in all regions with the exception of the Northeast/East Canada region, where mill closures in Maine have resulted in decreased prices and supply (Figure 1). The South maintained its low price position compared to the other regions and, while the South and Pacific Northwest (PNW) were in close proximity to each other in 2014 ($32.97 vs. $36.97), prices in the PNW increased $4.50 per ton (12.2%) compared to the South’s increase of only $0.51 per ton (1.5%).
***
Hardwood Pulpwood

With the exception of the PNW, hardwood pulpwood prices and supplies increased in all regions with the Lake States exhibiting the most significant growth (Figure 2). Delivered prices in the Lake States increased $7.85 per ton (16.8%) compared to 2014, and delivered supply increased 19.9%. While prices currently appear to be coming down in the Lake States, the YTD 2015 average has not declined as fast as the run-up in prices during 2014, which was a consequence of severely depleted mill inventories during that time period.[2] While supply has increased and inventories have recovered close to their norms, the YTD delivered price remains elevated compared to the same period last year. In the other regions, price increases were generally smaller, ranging from $0.11 to $0.41 per ton.
***
Conifer Sawtimber

Delivered sawtimber prices and supply in the South region have remained fairly constant (Figure 3). YTD 2015 delivered prices averaged $345.92 per thousand board feet ($42.55 per ton), increasing only $1.34 per thousand board feet ($0.17 per ton, or 0.4%) over 2014’s average price. Harvest activity increased slightly by 2.8%.

In the PNW, both export and domestic prices decreased along with supply compared to the same period last year. Domestic prices fell $41.61 per thousand board feet (-6.3%), as delivered supply decreased 11.5%. Export prices fell almost three times the rate of domestic prices, declining $114.29 per thousand board feet (-16.4%), as delivered supply decreased 25%.
***

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

BMO Comments on Southern Log Prices: Questions Recent Southern Timberland Pricing

Sam Radcliffe's insight:

Let me go one step further: recent timberland prices are supported by real discount rates in the 5-6% range, but the cash flow projections generally assume substantial pine sawtimber real price recovery. If that recovery does not happen then timberland discount rates are actually in the 3-5% range, an unpopular position that I have held for more than a year now.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

US South Roundwood Price Update: 8-Year Snapshot

US South Roundwood Price Update: 8-Year Snapshot | Timberland Investment | Scoop.it

In 3Q2011, the last time we reported on multi-year delivered prices for US South roundwood, the market for pine sawtimber, pine pulpwood and hardwood pulpwood over the timeframe was volatile. This volatility was the result of the Great Recession of 2008 and the market uncertainty that developed over the roughly 24 months that followed.
***
As market volatility began to wane in 2011, the prices reflect a slow return to stability; for example, delivered hardwood pulpwood prices returned to their 5-year trend levels ($33) by 3Q2011.


Fast-forward four years and prices for these products have remained reasonably stable. Though all are on upward trends, the only standout has been hardwood pulpwood.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Mississippi timber prices hover around 2014 levels

Mississippi timber prices hover around 2014 levels | Timberland Investment | Scoop.it
Mississippi’s timber industry is holding steady this year from 2014 as both the U.S. housing market and the demand for lumber continue to improve gradually.


State average stumpage prices for hardwood sawtimber declined sharply in the second fiscal quarter of 2015 from the first quarter, while pine sawtimber prices increased. Hardwood sawtimber is down compared to a year ago, while pine sawtimber is slightly higher.


Prices averaged $25 per ton for pine sawtimber, $14 per ton for pine chip-n-saw and $8 per ton for pine pulpwood. Mixed hardwood sawtimber sold for $33 per ton, while hardwood pulpwood averaged $9 per ton.


James Henderson, associate professor of forestry with the Mississippi State University Extension Service, said pine sawtimber prices vary widely across the state depending on location, but current overall averages are hovering near where they were at this time in 2014 despite increased demand. “We have more standing timber in the state now than we did before the Great Recession started in 2006,” Henderson said. “Increased supply will keep downward pressure on prices.”

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Lumber Prices Head Upward Along With Homebuilding

Lumber Prices Head Upward Along With Homebuilding | Timberland Investment | Scoop.it
Prices for lumber futures contracts are beginning to rise, after drifting down for months. China's homebuilding contraction and a winter hiatus knocked down prices, but they should jump dramatically as U.S. homebuilding surges.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Climbing Hardwood Prices Floor Home-Building Industry

Climbing Hardwood Prices Floor Home-Building Industry | Timberland Investment | Scoop.it

The U.S. housing market is facing a new headwind — a jump in the cost of hardwood prices. The hike also is escalating the price of wood pallets.

Against the backdrop of rising raw materials prices, most of the American hardwood flooring manufacturers have been forced to raise prices on finished goods. Some announced hikes at the beginning of the summer, while others increased prices in September.

Hardwood prices actually began their long climb in early 2013. Since then, they have reached record highs. According to the Bureau of Labor Statistics, hardwood prices are now over 40 percent higher than they were in 2009. Several factors have fueled this dramatic surge in prices.

First, overseas demand, particularly from China, has swelled over the past few years. Second, the U.S. housing recovery has helped boost domestic hardwood demand. Although annual housing starts are well below their demographically driven normal level of 1.5 million units, they’re still twice as high now compared to 2009.

Finally, on the supply side, the Great Recession upended the lumber industry. Mills closed and workers struggled to find employment in other professions. Although demand is returning, it takes time to reopen mills and attract workers back to the industry.

At the same time, adverse weather conditions have taken a bite out of supply. Also, there was a wetter-than-normal spring this year, and lastly, access to timberland has been limited. As a result, hardwood availability is struggling to match the swelling tide of demand, said Charlie McCarren, economist with the Pricing & Purchasing Service at IHS, in an interview with My Purchasing Center.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

US timberland prices gain, despite lumber slowdown

US timberland prices gain, despite lumber slowdown | Timberland Investment | Scoop.it


Timberland in the US accelerated its price growth, despite some lumber market concerns centered on China and the domestic market, which prompted one of the top forestry groups to warn on profits.


US timberland prices were 7.2% higher in the April-to-June quarter than a year before, nudging 0.2 points higher than the rate of annual appreciation recorded for the January-to-March period, the National Council for Real Estate Investment Fiduciaries (NCREIF) said. Factoring in income of 2.6%, the total return from forestry land over the year was 9.9%, the highest figure in nearly six years, although still behind the 17.2% achieved from farmland.


The performance "reflects a combination of strong export demand from China for logs and lumber and a healthy domestic demand in the US for timber products", said Mary Ellen Aronow, chair of the Ncreif timberland committee. However, Ms Aronow, a senior forest economist at Hancock Timber Resource Group, acknowledged some challenges to these factors, saying noting "some hurdles still facing the recovering US housing market, and a cloudy outlook for Chinese demand".


Earlier this week, Plum Creek Timber, which controls 6.7m acres of US forestry, cut its forecast for full-year earnings to $1.05-1.25 a share, from $1.30-1.50 a share, citing a market recovery in 2014 which "has been more muted than we and other industry participants initially expected".
***
Wood Resources International reported earlier this month that US lumber markets began falling in the spring, with "lumber prices falling over 10% so far this year", with "weaker log export markets in Asia" a big factor.


"Demand for wood in China has declined somewhat because of a slowing in the construction sector, which has increase log inventories in the ports and on vessels waiting to unload logs," Hakan Ekstrom, principal of Wood Resources International, told Agrimoney.com. However, he added: "I see this as a temporary blip on the long-term upward trend in demand for wood raw material - logs, lumber and wood chips."


more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Real Estate Is Going Higher. Just Ask Lumber.

Real Estate Is Going Higher. Just Ask Lumber. | Timberland Investment | Scoop.it

When it comes at the cost of lumber, one can glean a lot of useful information about the state of the home building market, particularly in the United States. It turns out that market for wood provides robust confirmation of trends or at times can signal a market top or bottom or pending reversal of fortune in particular sectors of the housing market.
***
Lumber has traded in a range between $214.40 and $338.70 per 1,000 board feet since the beginning of 2015. It closed last week around $325. As the weekly chart of lumber futures that trade on the Chicago Mercantile Exchange highlights, the price of lumber has appreciated since September 2015. The move in lumber has been slow and steady with the commodity making higher highs and higher lows. The weekly historical volatility, a measure of the variance of the lumber market, currently stands at 17.44%. Considering this metric was at almost 38% in February 2016, and was at over 40% in October 2015 and June 2015, the current level price volatility in lumber is comparatively low. Lumber is now trading at close to the highest price since 2014, but the price of wood has crawled higher. Higher lumber prices are a confirmation of a trend that we see in the housing markets across the United States.
***
The price of wood peaked in 2004 at $464 per 1,000 board feet and began a multi-year slump. While the housing market crashed in 2008, lumber had already been falling for four years by the time the mortgage-backed securities issues caused massive headaches for homeowners and banks alike. Lumber futures had dropped to under $300 by 2007 while the buying and lending merry-go-round continued to send home prices to astronomical heights Lumber was screaming at markets that the housing bubble was about to burst. While markets were reeling from the aftereffects of the financial crisis of 2008, the price of lumber bottomed in early 2009 amidst a flurry of mortgage defaults as property prices dropped below loan values. The lumber price has appreciated steadily since, even as foreclosures and the aftermath of the crisis played itself out.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Timber Price Movements in the US South during January/February 2016

Timber Price Movements in the US South during January/February 2016 | Timberland Investment | Scoop.it
During the January/February 2016 period, pine stumpage prices rose throughout the US South while hardwood prices saw little movement. On a Southwide basis, pine sawtimber realized the biggest increase (+3.5 percent) rising to $26.42/ton. Pine chip-n-saw and pine pulpwood both ticked upward as well (+3 percent and +1.7 percent respectively) while hardwood sawtimber and pulpwood prices held steady (both <1 percent).
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Housing Starts, Southern Yellow Pine Prices Surge in February/March

Housing Starts, Southern Yellow Pine Prices Surge in February/March | Timberland Investment | Scoop.it

February 2016 housing starts were at a seasonally-adjusted annual rate (SAAR) of 1,178,000, or 5.2 percent above the revised January estimate of 1,120,000. This number is also 30.9 percent above the February 2015 rate of 900,000. Additionally, single-family housing starts were at a rate of 822,000, which is 7.2 percent above the revised January figure of 767,000.
***
After some initial zigzagging, the price of southern yellow pine lumber has trended up during 1Q2016; it finished week 12 at nearly $361/mbf, which is nearly 11 percent above its January 2015 starting point of $326/mbf. Based on this data, it’s evident that housing starts helped to buoy the price of SYP during February.

 

On the other hand, existing home sales for February were disappointing: The National Association of Realtors wrote yesterday that existing home sales dropped 7.1 percent to an annual rate of 5.08 million units, the lowest level since November, 2015. This is a potentially troubling sign for America's economy, which has otherwise looked somewhat robust thanks to steady housing numbers.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Does it take prices to make volumes move? A comparison of timber market functioning in Finland and Lithuania

Does it take prices to make volumes move? A comparison of timber market functioning in Finland and Lithuania | Timberland Investment | Scoop.it
Forest ownership structure is known to have implications for forest management and the production of forest products and services. The ownership structure, as well as the degree of state regulation of forestry, could thus be expected to affect the functioning of timber markets. Hence, in the presence of strict prescriptions for forest management, the self-regulating mechanisms of timber markets – governed by the economic principle of supply and demand – could be inhibited. Using Finland and Lithuania as contrasting cases, we found empirical evidence for the existence of such a self-regulating mechanism in timber markets that are liberal in terms of state regulation of forest management, but not in those under strict state regulation. The results highlight how price increases (reductions) generally anticipate high (low) sales volumes or at least volume increases (reductions) in the Finnish case, suggesting that timber markets here self-regulate toward the equilibrium. Such patterns were not found in the Lithuanian case. The inability to respond to – and take advantage of – price signals could hamper the economic viability of forest ownership in timber markets constrained by regulation, and thus also impede efforts to mobilize wood to satisfy a foreseen increased demand.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Import Value of Logs and Lumber to China Falls 25% in 12 Months

Import Value of Logs and Lumber to China Falls 25% in 12  Months | Timberland Investment | Scoop.it
Seattle, USA. China imported softwood logs and lumber valued at 498 million dollars during the month of November in 2015. This was 26% lower than the same month in 2014 and the third lowest monthly level in three years. As recently as April 2014, the import value was at an all-time high of almost 900 million dollars, reports the Wood Resource Quarterly (WRQ).


The reduction in house construction in China has resulted in a substantial decline in the importation of forest products during 2015, reports the Wood Resource Quarterly. The total value of imported softwood logs and lumber has fallen 25% and import prices have declined almost 30% that past 12 months.


The reduced demand for both overseas and domestic wood products in 2015 has been a consequence of the slowdown in the Chinese economy, which has not only reduced construction activities but also consumer spending on home remodeling and furniture.


Not only have log and lumber imports plummeted the past year, but so has the price paid for imported products. In November 2015, the average costs of imported softwood logs were down 30% from their peak in April of 2014 to reach their lowest level since early 2009. The biggest price drops during 2015 were for logs from New Zealand, Australia and Russia. According to the WRQ (woodprices.com), domestic log prices have fallen much less than import prices during 2015, with Chinese fir sawlog prices declining less than six percent from the 1Q/15 to the 4Q/15.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

US South Stumpage Market Trends: YTD 2015 Results and Historic Data

US South Stumpage Market Trends: YTD 2015 Results and Historic Data | Timberland Investment | Scoop.it

Sawtimber, Chip-n-Saw

A comparison of 2015 YTD average prices over the same period in 2014 shows that sawtimber prices increased while chip-n-saw prices softened.

  • Chip-n-Saw (CNS) currently averages $19.18/ton, which represents a $0.30/ton or 1.5% decrease.
  • Pine Sawtimber currently averages $28.04/ton, which represents a $0.31/ton or 1.1% increase.
  • Hardwood Sawtimber currently averages $39.12/ton, which represents a $0.66/ton or 1.7% increase.

Pulpwood

Pulpwood prices decreased YTD 2015 over 2014 averages.

  • Pine pulpwood currently averages $11.34/ton, which represents a $0.51/ton or 4.3% decrease.
  • Hardwood pulpwood currently averages $9.77/ton, which represents a $0.18/ton or 1.8% decrease.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Why Lumber Prices Are Falling--Summer 2015

Why Lumber Prices Are Falling--Summer 2015 | Timberland Investment | Scoop.it

Lumber prices have taken a dive this summer, falling 21% from a February high of $380 per MBF to an August low of $307 per MBF (Figure 1). Composite prices are near the lowest level they have been in three years. This reversal is a result of several market forces that have collectively put downward pressure on prices.


1. Prices began climbing in 2012 as the housing market started to recover. Because a significant amount of sawmill capacity was shuttered during the recession, supply was constrained (mostly due to lack of kiln capacity) and prices increased. As more capacity came online, however, this pattern had to shift.


2. Housing start numbers have been solid in 2015, but a deeper look at the numbers shows that multiple family units are responsible for the higher housing start numbers, and multifamily units do not require as much wood as single family units.


3. Because of the currency exchange rate—the Canadian loonie is at an 11-year low against the US dollar—imports from Canada are flowing across the border as less expensive Canadian lumber has the market advantage. Domestic producers have been forced to lower their prices to remain competitive.


4. The strong US dollar has also diminished lumber exports, further weakening prices as exporters looked for domestic buyers at lower prices.


5. Extreme heat shortened hours on construction sites in some areas, slowing rates of completion.


6. Wholesalers, cautious in the absence of strong market indicators, are buying conservatively.

more...
3Aubrey Heard's curator insight, October 15, 2015 8:44 AM

The housing market of the U.S. is decreasing, which causes the lumber market to also decrease. I never thought about this influence and the effect it could take on many businesses especially in rural regions. 

Scooped by Sam Radcliffe
Scoop.it!

State website provides information on timber prices

State website provides information on timber prices | Timberland Investment | Scoop.it
The Arkansas Forest Resources Center is debuting a newly redesigned Arkansas Timber Price report, now available online.
The report provides statewide average stumpage prices for pine pulpwood, pine chip-n-saw, pine sawtimber, hardwood pulpwood, mixed hardwood sawtimber and oak sawtimber products. The generalized prices in this report provide interested landowners with a reference for market conditions.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Montana Quarterly Log Prices

Montana Quarterly Log Prices | Timberland Investment | Scoop.it

Under the sponsorship of the Inland Northwest Forest Products Research Consortium, the Bureau maintains a system to provide current mill-delivered prices for logs in Montana. These prices are based on quarterly surveys of Montana timber-processing plants. Sawlog prices are reported quarterly by product type and species. Past specialty log price reports are also available.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Lake States Inventory Level Issues and their Causes

Lake States Inventory Level Issues and their Causes | Timberland Investment | Scoop.it
Mill inventory issues are nothing new in the Lake States. Forest2Market has been tracking fiber inventories and benchmarking prices in the Lake States for nearly three years. Over this time, the data shows that maintaining adequate system-wide inventories has been difficult across all species and products. As a result, price has increased significantly, making the Lake States the highest wood cost region in North America. The seasonality of wood supply in the region is the most significant factor mills take into consideration when planning for a consistent supply. While the specific inventory plan at each mill depends on a variety of other factors as well, the wood production system must not only generate a sufficient volume of supply, but the timing of the volume coming to market is also critical.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Stumpage Market Trends in the US South: Sale and Harvest Data

Stumpage Market Trends in the US South: Sale and Harvest Data | Timberland Investment | Scoop.it
In 2014, stumpage prices increased for all roundwood products across the US South. Recovery in the US economy and strong export demand for hardwood sawlogs pushed prices higher. In addition to price increases, interesting trends in sales and harvests emerged.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Is another housing bubble sneaking up on us?

Is another housing bubble sneaking up on us? | Timberland Investment | Scoop.it
Nick Timiraos points to an interesting IMF chart today. It breaks the world into two sorts of countries. The first, which includes the US, UK, Spain, and others, saw a big housing bubble during the aughts and a big housing bust during the Great Recession. The second, which includes Canada, Germany, and others, had only a modest runup in housing prices during the aughts and a correspondingly small decline during the Great Recession.

So what's happening now? Well, countries that already had a housing bubble continue to struggle. Housing prices today are more than 20 percent below their 2007 peak. And the other countries? Well, they're having their own housing bubble now, with prices nearly 30 percent higher than their previous peak.
more...
No comment yet.