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Market Alert: Good Prices — Great Forestry

Market Alert: Good Prices — Great Forestry

By: Vincent P. Corrao

Landowners have a great opportunity to conduct forestry practices on their properties this fall and winter. The pulp/fiber log prices are hitting a high and providing a great opportunity for landowners to implement thinnings and fuel reduction projects, improve stand stocking and species composition.

The pulp/fiber market fluctuates and during the past 12 years has peaked three times. The peaks occurred in 1995, 1998 and the third peak is happening this quarter in 2006. During these peaks pulp prices have ranges from $36/ton to over $45/ton. When pulp hits these prices ranges, it allows for the efficient removal of many small logs that typically are not economically feasible to remove at the lower prices. Log specifications generally accepted in this market are logs down to a 2.5 inch small end diameter and they are delivered in tree lengths rather than in regular log lengths.

Log markets are volatile and the pulp market in the past generally lasts 3 to 6 months before it softens. We encourage any landowners that have small logs and trees that need to be thinned to try to remove this product while the pulp market is strong.

Today the pulp prices are ranging from $36/ton in the Lewiston/Clarkston area to over $45/ton in Montana. Granger in Lewiston is the major purchaser in the Clearwater region, Smurfit Stone in Missoula, and Ponderay Newsprint Company and Vaagen Brothers in North Idaho and Northeast Washington are all actively buying.

The forestry opportunities are many and include the ability to reduce stocking in your overstocked stands and improve species composition. Thinning these stands will reduce competition and mortality, improve the species mix, increase growth on the residual stems, and reduce the overall fire hazard and fuel loading in these stands. Thinning overstocked stands also improves forest health by reducing the risk to insect and disease occurrences and the silvicultural prescriptions can be tailored to set up the stands for future treatments by selecting the appropriate species for future seed trees, shelterwood, or other regeneration cuts.

Fire and fuel reduction projects generally always focus on removing, grinding or burning the small fiber size logs to reduce the fire danger. Harvesting the small fiber size logs, or cleaning up after a harvest benefits forest health but usually costs the landowner. With the high pulp market, much of the fiber/pulp can be removed at cost or in many cases the landowner will be able to make some income on this product.

Contractors that have the equipment to harvest these stands are at a premium. These highly mechanized operators can remove this product efficiently and do a nice job of cleanup and leave tree selection. If you have overstocked stands to harvest, you may have to coordinate with your neighbors to combine several sales. The larger the sale and the higher the volume, the more cost efficient the contractor can be in removing this product. The larger sales also help cover the move-in/move-out costs when entering the job. These markets tend to peak for a short period and are cyclic. If you have an opportunity to complete some cultural practices this is a good time to move this small material.

If you have stands that need attention, please contact Northwest Management, Inc. at any of our offices. We will work to combine sales and assist in locating a contractor to get your forestry needs completed.

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