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Far East Exports Surge May Provide Relief for U.S. Timber Industry

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F&W Forestry Services, Albany, Ga., USA, reports that exports of paper, pulp, and lumber to the Far East may help relieve depressed markets for U.S. timber growers resulting from the three-year housing slump. Marshall Thomas, president, notes that generally dry weather contributed to weak markets in a large segment of the country's commercial forests this past winter. Dry weather usually results in an unrestricted supply of trees for mills.

But the housing slump is the real culprit behind depressed timber markets, Thomas points out. "So far in 2011, there has been little change in the major housing indicators from 2010. Housing starts remain flat, although some prognosticators are predicting some growth this year but probably not enough to put upward pressure on (timber) stumpage prices."

The other major large-scale domestic market for trees—the pulp and paper industry—"seems steady," Thomas says. But overseas "variables," specifically in the Far East, "could have a positive impact on (U.S.) timber prices, both in the short and long term.

"There could be an increase in demand from Japan for wood products—both for reconstruction from the terrible damage caused by the earthquake and tsunami and, in the near term, to replace lost paper production at the significant number of pulp and paper mills in the impact zone," Thomas explains.  

Thomas adds that the monumental task of rebuilding Japan from the catastrophic disaster will require lumber and plywood that "almost certainly would come from the West Coast of North America." Even before the Japanese disaster, Thomas says that lumber and wood exports to China from the U.S. and Canada were growing rapidly.

"Any surge in U.S. and Canadian lumber exports, even on the West Coast, could have a positive impact on timber prices in the East and Southeast," he said.

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