Timber Pricing Dynamics and Auction Trends: Lake States in Mid-Q3 2023
See how the market has been navigating volatility with Timber Pricing and Auction Trends in the Lake States...
A mixture of reports of soft pricing, particularly in cordwood and bolts, continued in the Lake States in August from a variety of sources. Also noteworthy was the return in force of no-bid auctions that had been abundant from 2008-2011.
More evidence came in an announcement from the Michigan Department of Natural Resources that it will consider waiving contract extension fees if a contract holder petitions the agency. “Michigan (DNR) has also noticed volatility in the markets and is monitoring trends in mill deliveries and bidding activity and prices,” Jeff Stampfly, Michigan’s State Forester, wrote in reply to the Great Lakes Timber Professionals Association.
Stampfly wrote that consideration would be given to requests for a “market-related extension from the Unit Manager…where the contract was issued if situations “significantly impacted by market-related issues” have occurred. Nearly $800,000 in extension fees have been waived in the last four years, according to Stampy.
The greatest impact has been in pulpwood, according to a consulting forester from the Northern Michigan lower peninsula who contacted FDN. “The market for pallet logs is gone for now, and there is very little demand at all for cordwood”, he reported. These trends were reflected in Forest Data Network’s Michigan pricing which showed mixed hardwood with a 48% decline statewide.
There were bright spots in sawlog pricing, and pine pricing continued to be strong across the Lake States. FDN’s Michigan pine sawlog prices were up over 30% statewide in the second quarter of 2023. Minnesota pine prices were similarly strong, but hardwood prices were soft for most species.
In Wisconsin, the Bureau of Commissioners of Public Land reported good results from its June auction with bids totaling $418,000, a wide margin over the minimum bid value of $264,000. BCPL’s board minutes noted that the organization was “very happy with the results as we’re in one of the worst timber markets price-wise that anyone can remember.”