Lumber shipments totalled 137 million board feet during the 1Q 2013 and included wholesale lumber shipments of 17 million board feet. Shipments of Conifex produced lumber increased by 9% over the previous quarter and 4% over the 1Q 2012 but lagged current quarter production volumes by 4% with some of the shortfall attributable to a tightening in rail car supply which has since eased. An increase in unit gross sales and unit net mill realizations of approximately 19% over the previous quarter largely reflected the quarter over quarter movement in average benchmark lumber prices.
Lumber production totalled 124 million board feet in the 1Q 2013 and improved annualized operating rates to approximately 67%. The 15% increase in production volumes over the previous quarter and 12% over the 1Q 2012 resulted in improvements in unit cash conversion costs of 15% and 6% respectively. Factors contributing to the productivity gains included the recent management restructuring, the processing of a more sustainable and representative log diet, a minor capital upgrade at the Fort St. James mill in December, a more effective maintenance regime, and the benefits of heightened focus on leadership training and continuous improvement.
1Q 2013 net income of $6.2 million was comprised of lumber segment net income of $8.7 million offset by bioenergy segment net loss of $0.2 million and corporate costs and other items of $2.3 million. First quarter lumber segment EBITDA of $10.5 million was offset by negative bioenergy segment EBITDA of $0.2 million and corporate costs and other items of $1.1 million.
Compared to the 4Q 2012, lumber segment net income improved by $9.9 million with approximately 50% of the increase attributable to higher mill net realizations, which largely reflects the rise in the average benchmark lumber price and reduction in export tax rate for U.S. shipments, and the balance primarily attributable to lower cost of sales resulting from productivity gains and cost containment. Compared to the 1Q 2012, the benefits of a significant improvement in mill net realizations and moderate improvement in unit conversion costs were partially offset by higher unit log costs and resulted in a year over year increase in lumber segment net income of $13.3 million.
Conifex and its subsidiaries' primary business currently includes timber harvesting, reforestation, forest management, and the manufacture, sale and distribution of dimension lumber.