U.S. lumber prices starts to increase again, compared to last months when prices were as low as the $400/MBF range.
Scott Reaves, Director of Forest Operations at Domain Timber Advisors, tells Lesprom Network: “We believe major dynamics contributing to the increase of lumber prices to record highs were the substantial demand for housing and remodeling coupled with pandemic driven supply chain disruptions. In large part, this was due to the lack of available labor and necessary time for mills to increase production.
Last quarter, we witnessed prices fall into the $400’s/MBF as the surge in demand from late 2020 and early 2021 abated (somewhat dampened by high prices) and mill production intensified. We expect prices to rise into the $700’s/MBF as demand persists (likely in response to the falling prices).
We expect demand for lumber to continue through the rest of this year and beyond due to demographically driven housing needs which is good news for lumber mills and forestland owners. We are already seeing current lumber demands translating to increased pine saw timber pricing on average and through significant spot price opportunities.
Per Forest2Market’s Stumpage 360 database, YTD 2021 pine log timber prices across the South are up 11% over 2020 to a 10-year high which is excellent news for forestland owners. Significant demand for raw materials, including lumber, packaging and mass timber, coupled with growing interest in carbon sequestration and additional ESG benefits suggests today’s market offers an appealing entry point for forestland investment.”
