The nightmare of 2020 continues. After the wettest winter in recorded history,North Alabama timber markets were hit by shutdowns mandated by the government’s esponse to the virus. This was especially difficult with hardwood pulpwood.With the exception of Westrock in Stevenson, every other purchaser of hardwood pulpwood, north of I-20, shut down from late April through the end of July.They have slowly started to open their scales since August 1st.Delivered prices have plummeted from $5.00 to $10.00 per ton. At least they are buying wood again. Hardwood tie logs have remained steady in purchasing and pricing. Hardwood sawtimber has been down from record highs. Yellow poplar, in particular, has dropped dramatically. White Oak is slightly down but Red Oak has recently risen. Overall, hardwood appears to be recovering.
On the pine side, pulpwood remains steady in price and demand. Although there were temporary outages due to market worries and the IP mill at Rome, GA burning.The outlook for this product remains steady though slow. The pine lumber market has hit 15-year highs. Unfortunately, this hasn’t trickled down to suppliers or land owners. An oversupply of standing sawtimber brought on by 12-years of low prices and low production allows the manufactures to hold delivered prices down. That coupled with mill shutdowns caused by virus or mechanical problems has kept inventories high on the mill woodyards. We believe this situation will ease going into winter and we’ll see some upside to pine stumpage prices.
Overall, we believe that timber markets are slowly recovering. There are still some problems, and this gentle upturn remains fragile. If interest rates remain low, housing starts continue to increase, and schools and businesses continue to reopen we should see demand for lumber and paper increase slowly but surely.