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Econ Home > Products > Southern Markets > Timber Sector
• With very little variance, total timber production grew between 1962 and 1998.
• Between 1998 and 2002, total timber production declined by about 9 percent; back to 1995 levels.
• Prices for softwood products declined between 1998 and 2004, dramatically so for softwood pulpwood. Softwood pulpwood prices are, in inflation adjusted terms, at their lowest levels since 1977. Declines in softwood capacity and paper industry consolidation combine to leave no expectations of future softwood pulpwood price increases.
• Prices for hardwood products have not turned downward.
• Based on price and quantity patterns, we identify three phases of development in southern timber markets: 1) a moderate growth phase from 1977 to 1986, 2) a rapid growth phase between 1986 and 1998, and 3) an adjustment phase between 1998 and 2004.
• At a minimum we can say the following about market dynamics during each phase: 1) the moderate growth phase was characterized by expanding demand and supply, 2) the rapid growth phase was dominated by growth in demand outstripping supply growth for wood products, and 3) the adjustment phase was dominated by declines in demand.
• During the rapid growth period, hardwood sawtimber output grew only slightly with steady growth in prices, indicating a possible contraction of available hardwood sawtimber inventories and therefore supply.
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modified: 30-Nov-2005 created by: John M. Pye |
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