The U.S. economy is exhibiting more indications of being in recession. The contagion that brought the domestic housing market to its knees has spread offshore and into traditionally stable financial market sectors. Potential home buyers likely will remain on the sidelines until a more optimistic employment picture and lower home prices materialize. Expectations of further interest rate cuts are eroding the purchasing power of the U.S. dollar and, along with global competition for available supplies and speculative activity, contributing to record crude oil prices.
Finally, the magnitude of this downturn is resulting in the loss of home building capacity, which will affect the speed with which the market can rebound. Thus, whereas past housing busts bottomed out and then recovered quickly, we expect the transition to recovery to be more gradual.
The above is an excerpt from the March issue of the Forest2MarketŪ Economic Outlook. To learn more about the F2MŪ Economic Outlook or to subscribe, click here.
Gordon Culbertson: PNW must seek new path out of the current crisis
The Pacific Northwest forest products industry, riding the current swell of unprecedented foreclosure rates, must make strategic cuts to mitigate the effects of the current credit crisis. Evidence of such decisions is rampant. Mills are shutting down throughout the Pacific Northwest, and thousands of jobs are at risk.
As a result of the current debacle, lumber production has decreased in the PNW by nearly 13 percent. Cautious mill buyers appear content to live with tight log inventories, and operators will likely continue this close-to-the-vest philosophy. Furthermore, timber harvests in Oregon alone have fallen by as much as 12 percent.
Changes in the industry and the nature of the current crisis preclude earlier strategies used to sustain the PNW forest products industry. To read more, click here.
Gordon Culbertson is the Pacific Northwest Region Manager for Forest2MarketŪ, Inc. Culbertson has more than thirty years of experience in the Western forest industry.
Trees-Energy-Fuel: Connect the dots
The link between the traditional forest products industry in the U.S. South and the emerging green energy economy is simple: supply and demand. Forest2MarketŪ, Inc. and Resource Vision, Inc. will shed light on the economics of forest biomass in the soon-to-be-released study, The U.S. South Forest Biomass: An Emerging Industry in Wood Fiber Markets. The study will examine the role and stability of forest biomass markets in the U.S. South within the context of global initiatives for renewable energy. It will forecast the growth of forest biomass demand and consumption, as well as the effects of such growth on the traditional forest industry – from timberland investors and landowners to sawmills and pulp and paper producers. Additionally, the study will detail potential risks to the emerging wood fiber markets including non-forest biomass supply, energy price volatility and new environmental regulations and backlash.
Learn more about the groundbreaking study and take advantage of early-order discounts here.
Timber Prices in Western South Carolina Likely to Plummet
Timber prices in western South Carolina could reach historic lows this summer, prompted by closures and shift reductions at area mills, an expert in the forest products industry said Tuesday.
Mills throughout the South have felt the sting of the crippled housing market and reduced their lumber production, said Daniel Stuber, operations manager for timber price information. Mills, faced with higher production costs and reduced lumber demand, can’t sell enough lumber to turn a profit. As a result, the price of standing timber has fallen. To read more, click here.
Wood Fuel and Weak Housing Boost Regional Pulpwood Demand
Forest2MarketŪ reports that pulpwood demand in southern Georgia, Alabama and the Florida Panhandle is on the rise, as mills compete for raw materials due to the slowing housing market and increased demand from facilities that make wood pellets for fuel.
Pellet mills operate on wood waste and residual chips – byproducts of lumber production. But, lumber mills throughout the South have cut production in response to the weak housing market, said Daniel Stuber, operations manager for timber price information provider Forest2MarketŪ. With new pellet mills coming online, competition for raw materials with a healthy pulp and paper industry is sure to become interesting. To read more, click here.
Pellet Fuel: A Renaissance of Heat and Energy Solutions
Three new wood pellet plants in the U.S. South will more than double North American pellet production capacity. Dixie Pellets, L.L.C., and Green Circle Bio Energy, Inc., are slated to begin production at plants located in Selma, Ala. and Cottondale, Fla., respectively, during the first half of 2008. At full capacity, Dixie Pellets will produce 500,000 tons of wood pellets annually, and Green Circle Bio will produce 550,000 tons. Plans for a third plant, located in Jackson Alabama and operated by DG Pellets I, LLC, are well under way. Upon completion, the DG Pellets facility will add another 600,000 tons of capacity to the North American wood pellet supply.
According to the Pellet Fuels Institute, approximately 80 pellet plants in North America produce 1.1 million tons per year. Much of the additional 1.65 million tons of wood pellets from the three new plants will be shipped to Europe. European demand for wood pellets has soared since the 1997 ratification of the Kyoto Protocol by many nations, including the European Union as a single body. The United States has not ratified the Kyoto Protocol, but, as political and public demand for green energy solutions amplify, wood pellets for energy and heat will likely enter a new renaissance.
Timber Theft: Online State-by-state Resources
Tommy Lee Evans of Homer, Louisiana, Frederick Olesiak of Sawyer, Minnesota and Robert Stanton of Broome County, N.Y. – these names are unlikely to resound in the general public, but they will never be forgotten by lucky timberland owners who won convictions against these timber thieves.
Foresters estimate that timber theft, much of which goes unreported and undetected, costs landowners millions of dollars each year. Timber theft can take on a variety of forms – from slash and dash tactics employed for single high-value trees to fraud from “trusted” loggers either undervaluing timber or stealing entire loads of logs from contracted (or un-contracted) timber tracts. The methods used to steal timber are plentiful. As such, states have gone to great lengths to provide timberland owners with tips to prevent theft and additional resources should theft occur.
To find resources in your state to help prevent or report timber theft, click here.
Learn more about timber theft and other important issues that affect timberland owners. The Forest2MarketŪ Timber Owner Market Guide delivers news, helpful hints and accurate, local timber prices from three U.S. South regions. To find out more, click here.
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