Roundwood Price Update: 3Q2011 Results

Despite increased demand and inventory building by mills, prices for roundwood in the US South continued their downward trend during the third quarter.  Supply was not an issue as both delivered and stumpage prices fell despite the increased demand.  Favorable weather conditions and declining diesel costs were the primary drivers; they freed up supply and caused the price reduction.

Pine Pulpwood

Delivered prices were down $0.01/ton from 2Q2011 to average $29.10/ton this quarter.  Stumpage prices fell $0.18/ton to average $7.92/ton.  Purchased tons were up 5 percent.  Compared to the same period last year, delivered prices were down $0.42/ton, while stumpage was down $0.75/ton.  Over a 5-year history (19 quarters), pine pulpwood delivered prices have increased at a compounded annual percentage rate (CAPR) of 0.2 percent while stumpage prices have decreased at a 2.9 percent CAPR.

Hardwood Pulpwood

Despite a 9 percent increase in purchased tons, delivered prices were down $0.85/ton from 2Q2011 to average $32.04/ton this quarter.  Stumpage prices decreased $0.35/ton to average $6.21/ton.  Compared to the same period last year, delivered prices were down $2.90/ton, while stumpage was down $1.88/ton.  After peaking in 1Q2010, hardwood prices have reached their 5-year trend level.  As a result delivered prices have increased at a 0.6 percent CAPR while stumpage prices have decreased at a 1.3 percent CAPR.

Pine Sawtimber

Despite a meager 1 percent increase in purchased volume, pine sawtimber reached a 5-year historic low this quarter for both delivered and stumpage prices.  Delivered prices averaged $39.78/ton this quarter, down $0.45/ton compared to 2Q2011.  Stumpage, prices averaged $20.05/ton, a decrease of $1.24/ton.  Compared to the same period last year, delivered prices were down $2.40/ton while stumpage prices were down $3.26/ton.  Five-year delivered CAPR reflects a 5.4 percent decrease.  For stumpage, the CAPR reflects a 10.5 percent decrease.