Looking at the 2004 season and the prices our landowners receive leaves little doubt that it was the year to get those stands thinned and your management objectives implemented. 2005 looks like 2004 at least for the first half of the year. The composite lumber price is already over $400 per thousand and $66 higher than the same time last year. Mills are beginning to look for inventory and log prices have begun to rise.
The forecast looks strong for log sales through May or June but are projected to soften toward the second half of the year. Interest rates are low and housing starts are up, fueling a strong first half for log sales. Third and fourth quarter log prices are expected to fall in response to a projected increase in interest rates and lower lumber prices.
Many mills are looking for logs and have begun raising prices to replenish inventories and to work around the breakup conditions.
When log markets are strong and improving is an excellent time to conduct your thinning and remove the insect and disease damaged trees and small log material in a cost effective manner and produce income that often is not available in softer markets.
Douglas-fir and larch, cedar and lodgepole are expected to be the strongest in price with improvement in grand fir and ponderosa pine, but prices in those species are not expected to exceed the 2004 price range. The log market fluctuates continuously, with the last big jump in the market in 1994 which continued into 1995. Often these surges run a 1½ to 2 year period and then soften again. The excellent log prices in 2004 and now into 2005 may continue into 2006, but the forecast is for a softening in the market late in 2005 and into 2006.
Northwest Management, Inc. log sales program will actively begin selling logs in March and is recommending landowners wanting to pursue a timber harvest to sell their logs by the end of second quarter 2005.
Securing a logging contractor that has the best match of equipment with log size, which in turn provides the bets harvesting cost, is always a challenge in active years. Setting up your sales early and contracting the logger with those sold logs is the best insurance to take advantage of 2005 prices.
Give us a call if you have any questions, and play the market when it’s right and right is 2005 early spring!