This may be the worst I’ve seen average stumpage prices since I’ve been reporting. The Southeast remains the only bright spot. When average prices for all species in Southeast exceed those in the Northern tier counties, except for Black Cherry, we know there is a problem. The Northwest and Southwest are not only suffering from the poor economy, but the rapidly expanding natural gas industry is taking jobs and income away from the forest sector.
Although logging conditions were good, higher fuel prices along with a flat economy didn’t help the timber market. The western parts of the state see prices keep slipping while in the Northeast prices are a mixed bag. The only signs of higher than last quarter stumpage prices are in the Southeast where prices crept up. However, there is still a long way to go to get back to pre-recession price ranges.
Sustainability is desired level of success when we look at how we’re doing in relationship to the natural world. A new report on the sustainability of our nation’s forests can now give us some ideas of how well we’re caring for our forestlands.
Local municipal township impacts from gas development, especially fiscal ones, are a big issue these days as the state contemplates an impact fee/severance tax. We recently completed a study trying to identify these fiscal impacts.
From the article: "But the number of e-mails, the seniority of the people writing them, the variety of positions they hold and the language they use — including comparisons to Ponzi schemes and attempts to “con” Wall Street — suggest that questions about the shale gas industry exist in many corners."
As I mentioned in a previous blog the new USDA Agroforestry Strategic Framework was unveiled. This is a link to the press release and to the document itself. I see new light in the future of agroforestry. Lets hope this momentum continues.
Interesting, so New York decides to wait and see and learn more from PA. As an economist one has to think of the costs of delay. Also, what if you are a landowner sitting on money but unable to tap it. Interestingly we also have more and more calls for a moratorium.
Marcellus is not the only game in town. From the article: "Until more exploration is completed on the triple shale play formations, especially Utica and the upper Devonian shale(s), many of the rumors will remain only rumors. There is clearly momentum building for new shale exploration in some areas, especially the Utica, but not all shale will have the same production potential across Pennsylvania, nor will development be evenly distributed across Pennsylvania."
There is no distinctive pattern to short term price trends of the major species across the TMR reporting regions. In percentage change, species’ prices in the Southwest region gained the most. Timber sales as evidenced by reports coming in seem to be increasing slightly. This probably means signs of recovery as mills replenish inventories. For continuing information between price reports visit my website and blog at http://extension.psu.edu/forest-finance. Finally, we are thinking about doing away with reporting mill prices. Please drop us a note as to your thoughts on this change. Enjoy the late spring.
A new publication in the popular From the Woods series, titled Wildfire, focuses on fire in the Eastern forest. An overview of eastern fires, how to protect your home and property, and the benefits of controlled fires are covered.
Timber sales are picking up, probably due to low inventories in mills, but stumpage prices remain sluggish for most species in most regions. In fact, there was quite a drop in the last quarter of 2010 for some of the major species. A number of factors are at play, some of which I have mentioned before. A growing concern is the impact of Marcellus shale gas drilling. Labor force in the timber industry is suffering to some degree as gas jobs pick up.
The Timber Market Report for the 4th quarter 2010 is up. You can use the above news link to get it directly, or browse to it from the left hand side. Thanks again to all those who contribute to the report. If you would like to contribute, please contact Kyle Kovach by email, listed under "contact us"
The newly designed and renovated TMR web site went live the end of December and the number of visitors to the site has substantially increased. We hope that are visitors can find the information they are looking for and come back to visit regularly. Thank you!