Wisconsin stumpage pricing holds stronger than expected in 2020 Q3
New pricing reports reflect pricing trends from spike in construction and remodeling activity
MADISON, Wis. -- Pine was king in the world of Wisconsin wood in the third quarter of 2020 with the volume of pulpwood harvested nearly doubling statewide.
Prices for pine pulpwood also increased very rapidly, but the price changes varied dramatically by region. And sawlog prices for pine were also robust, particularly for red pine.
The strong market for pine was a surprise given overall conditions, including shuttering the Verso mill in Wisconsin Rapids, and the flood of salvage wood from storms during the past two summers. But Home Depot and Menard’s parking lots were packed with people planning home improvement projects. That signaled strong demand for construction lumber. Some retail lumber yards in the Lake States sold out of lumber and plywood and prices soared nationally.
FOR STUMPAGE PRICING INFORMATION FOR YOUR WISCONSIN REGION ACCESS FOREST DATA NETWORK INDEX PRICING REPORTS HERE
In addition to the remodeling boom, the market for new home construction is also showing great strength. New housing starts were very strong for September --- 8.8% above the previous month and a stunning 11.3 % above September, 2019 And growth in new home construction looks to continue for the balance of 2020 as new building permit statistics for September, released by the U.S. Census Bureau on Oct. 20, showed an 8.1% increase over September, 2019.
Meanwhile hardwood harvest volumes were down overall, but prices for oak cords surged, likely because of the scarcity of harvested wood. Oak sawlog prices increased by more than 25% in the quarterly index prices tracked by Forest Data Network.
Some of the trends in log volumes for the quarter were due to decreases in volumes harvested from Chequamegon-Nicolet National Forest. Six of fourteen national forest tracts offered for harvest in the quarter received no bids and harvest activity on the other tracts was limited.
Meanwhile, the prices for some lower volume hardwood logs have held solid. Birch and cherry prices have been very good, with cherry at its highest level in 10 years.
There was little or no harvest activity tracked in southern Wisconsin.
The boom in pine prices was broadly felt across the state, but it was stronger in certain regions. And it was strongest in red pine, where the prices were up by 50% in some regions from 2019 for both red pine sawlogs and cordwood.