How Do I Convert Log Rules?
All sawtimber prices in this report are based on the International 1/4" log rule. The conversion factors used to determine prices in Doyle and Scribner rule are shown below the individual Price Report tables each quarter. Conversion from one log rule to another is somewhat arbitrary in that the conversion factors vary with log size and form class. The conversion factors used to compile this report assume that the average log has a 13-inch diameter at the small end.
Why Four Different Regions?
The four regions, shown in this map, were designed to more accurately reflect the forest products markets in Pennsylvania. The markets within each of the four regions are unique. For example, the quality and quantity of black cherry produced in the Northwest usually surpasses that of the other three. The Timber Market Report's four regions were developed to take these types of differences into consideration while providing an accurate and easily understandable price report. It is important to note that counties in border areas may reflect the trends of all the regions on which they border.
What Do the Prices Mean?
The Timber Market Report reflects the stumpage and mill prices observed over a three-month period. Due to the dramatic changes common in Pennsylvania's timber markets, past reports may not accurately describe the latest market conditions. A current report is one's best guide to the current market status. It must be remembered that this report is based on a survey of loggers, sawmills, pulp and paper companies, consultant foresters, and public agencies. The Report is intended to describe general trends in the market and ignore specific timber tract variation. In addition, there are many factors which can influence the price of timber found on a given tract of land. These factors include, but are not limited to:
- species and quality of timber
- total volume and volume per acre
- logging conditions
- distance to the mill
- season of the year
- current market conditions
- and end product of manufacture
Sawtimber Stumpage Prices
The sawtimber stumpage prices found in this quarter's report are based on the average or mean price as determined form the survey information provided by loggers, sawmill operators, forestry consultants, the Bureau of Forestry, the Pennsylvania Game Commission, and the U.S. Forest Service. Along with the average price, the Report includes a plus and minus column. These two columns represent the average price plus and minus one standard deviation. The standard deviation is a measure of the variability or dispersion of all the prices reported for a given species. A range of stumpage prices one standard deviation on either side of the average usually includes two-thirds of all the reported prices for that species. This does not represent the complete range of prices in the species, but it tends to eliminate the extreme values. It shows where the majority (two-thirds) of the reported prices lie.
Mills report on a dollar per thousand board feet basis the low, medium, high and veneer prices for logs delivered to the mill. The low, medium and high categories correspond to the Forest Service log grades F3, F2 and F1, respectively. The mill prices represent the average of all the the prices reported by sawmills across the state plus those out-of-state mills which purchase Pennsylvania logs. Like stumpage prices, these figures are also broken down regionally. Occasionally, the mill prices by grade will appear to be out of order. This occurs when the average prices of a lower grade exceeds the average price of a higher grade. This anomaly is caused by a limited number of responses in one of the categories. There are commonly fewer observations (the (n) columns) for mill prices since many mills do not report their mill prices because they supply their mills exclusively by purchasing their own stumpage.
Pulpwood Stumpage Prices
The pulpwood stumpage prices are reported in a manner similar to the sawtimber prices. The major difference is that pulp stumpage is split into two categories. The prices are calculated and reported separately because they represent two different types of forest products. The "Bureau of Forestry" category, represents not just pulpwood, but firewood and some low-value sawtimber, too. The "Private and Other Public" category represents forest products specifically used for pulp products. This group includes prices reported by loggers, sawmills, forestry consultants, pulp and paper companies, the Pennsylvania Game Commission, and the US Forest Service.
Nominal Vs. Real
Nominal prices are the actual reported prices of the product. In the nominal price trend graphs, the prices of the product are shown in the dollar value of the year reported. This means that a value shown in 2004 is its value in 2004 dollars and its value shown in 2009 is in 2009 dollars.
Real prices are the prices of the product that take account for increases due to inflation. Real price trends show the prices of the product in today's dollar value. In other words, all of the prices have been adjusted so that they are expressed in current (2010) dollars. This was done using the producer price index for all commodities as reported by the U.S. Bureau of Labor Statistics.