2nd Quarter 2015 Southern timber stumpage prices showed slight declines over 1st Quarter performance in all but one product category: Hardwood sawtimber rose slightly quarter to quarter. Pine sawtimber, chip-n-saw, and pulpwood, and hardwood pulpwood dropped by a small percentage. Year-over-year performance was better for the higher product groups, with Pine and Hardwood sawtimber, and pine chip-n-saw showing small gains over a year ago. Pine and Hardwood pulpwood declined year-to-year, with Pine pulpwood stumpage highest in Florida this quarter at just over $14 per ton on average.
Looking forward, U.S. housing starts continue to show strong recovery, especially in the South. This trend is expected to continue as evidenced by strong upward performance of new building permits, and has historically correlated to demand for lumber, and therefore timber prices. We expect to see growth in the timber markets as housing continues to climb, barring any market correction.
Southern timberland real estate asking prices rose this quarter to just over $2,050 per acre on average. Tracts fewer than 1,000 acres continue to sell at a slight premium over larger tracts.
Bottom Line: We are still waiting for timber markets to respond to the ever-improving housing recovery. Volatile stock markets and global uncertainty continue to affect investor confidence. Even so, timber markets and land sale markets have held steady in general over the past year and continue to show a growth in demand for quality timberland properties.
For an in-depth analysis of your timberland property, or to discuss how timberland can improve your portfolio, please Contact Us today to discuss.
LTM are professional forestry consultants with expertise in all aspects of timberland management and investment analysis.