The state of the southern pine market

[livemusic]

What's going on with the southern pine market? Everybody and his brother planted pines decades ago. So, that didn't work out too well? A combo of oversupply and depressed demand for paper and housing lumber? Are landowners making money with pines these days or what's going on? Is less or is more planting going on, are they adding more pine acreage?

Does anyone ever plant hardwoods?

I understand that hardwoods bring a landowner more money these days but they take much longer to mature, so, wondering how all of this dollars up.

It would be interesting to see how it really does dollar up over, say, a 50-year period. Take a kid that's age 18 and high school graduation and one grandpa plants a 40 acre tract in pine and the other grandpa plants a 40 acre tract in hardwood (or lets a clearcut tract regenerate naturally) and the kid gets the deeds. Then when he's age 68, they clearcut both and see how money is in each pot. Plus, if either tract was thinned along the way, the revenue or the expenses to thin were put into or taken from the pot. Well, heck, but then if the kid got revenue from thinning, you'd also need to add reasonable interest he could get from buying a CD or some type of interest-bearing account from the thinning proceeds. I didn't find an article online yet but I'd bet some universities or somebody has done such studies. I found a WSJ article that I couldn't read due to paywall but I think I might have read it months ago. Maybe it wasn't paywalled then. It was about everybody planting pines decades ago and now, there is over-supply.

[gdaddy01]

not many grown pines left standing around here after hurricane Michael pretty much flatten ever thing over about ten feet tall , so the price should go up in the next few years , I would think . this is in nw florida from Panama City to Donaldson Ge. about 60 miles wide . We had about 25 acres that were 16 years old , we had hand planted for a little retirement fund , all gone , so don't count on anything .  

[nativewolf]

I was trained, professionally, in intensive pine practices and adhered to that for 10 years, had doubts...left industry due to other reasons, came back full of doubts and am now a strong critic.  

Supply Demand issues are:

• Huge increase in intensive industrial pine acreage
• Huge increase in yields in southern pine plantations
• Huge biomass harvesting neighbor to the north, getting ever more efficient
• Increase in mill and drying efficiency so they can do more with small juvenile wood thus they harvest faster and there is little value in larger mature rotation products
• Brainwashed forestry culture, here in VA state foresters recommend planting pine on former hardwood stands so ..owner can get a faster harvest.  Hmmm...maybe something to do with pine log tax?  Hmm
• Globally Russia has emerged as a force to be reckoned with, purchasing more forestry harvest equipment than any other country last year.  Huge CTL purchases of Ponsse JD Komatsu.  This is going mostly to China but also to Europe and impacts price for biomass and other export products.  
• PNW forest are starting to show impacts of all the plantation work done in 70s and 80s.  Yields are huge on those lucky guys in the right DF belt.
• Plummeting demand for certain wood fiber products, paper being just 1.  
• See previous poster that thought planting 25 acres by hand was a good retirement investment (hey my family did it too).  Instead if they had sold the 25 acres and dropped that money into apple 16 years ago they would have $2,375,000 or so dollars assuming $1000/acre.  So many people made the same decision and here is the rub..that industrial forest land conversion does not take into account the 10's of thousands of small landowners that have been suckered into planting the ol tobacco field or corn field or hardwood stand into pine.  

I'm not even getting into the risk of monoculture but it is there and I assume it is just a matter of time before we have a devastating insect fungus or virus attack.  

Now that I am back in forestry I look at my hardwood harvest carefully.  I watch my natural regeneration carefully, I have stands where Yellow Poplar is growing at DF rates, faster than any pine...forestry extension recommend ...you guessed it...planting in pine.  I have black cherry 25 years old and 80' tall.  2x the price of pine and pine growth rates.  For the vast majority of land owners I think a mixed hardwood forest would be less risky, increase property values, and give more optionality to the small landowner than a pine plantation.  I would have no reservations about planting swamp white oak, cherry bark oaks, YP, gum, sycamore, walnut, in any small acerage property (say less than 1000 acres).  

[Southside]

Brainwashed forestry culture, here in VA state foresters recommend planting pine on former hardwood stands so ..owner can get a faster harvest.  Hmmm...maybe something to do with pine log tax?  Hmm

I have been complaining about that around here for years and nobody even knows what it is, never mind listens.  

I'm not even getting into the risk of monoculture but it is there and I assume it is just a matter of time before we have a devastating insect fungus or virus attack.

Completely agree - Personally been to the "Dead Red" in Oregon, perfect example of what we will one day face, not if, but when, also I grew up in the 70's / 80's Spruce Bud Worm epidemic.  When I mention either I am told that "it won't happen here - things are different"

Owning a pine mill around here in about 20 years will be better than a currency printing machine - you will be able to control the price.  If landowner A does not want to sell his pine for $30 / ton then when landowner B gets hungry enough he will sell it for $20, in the meantime landowner C is only getting $18 so who cares.... it's coming to a stand near you.   

[Ianab]

I'm in NZ, so have a different perspective. 

Here ~90% of the log harvest is Radiata Pine. It's intensively managed, and genetically improved seed stock for best growth and lumber. It's basically a "crop", like corn or beans, just it takes slightly longer to grow. There is good demand for the wood and logs, even if there are fluctuations in the global market, you can harvest at 25 years, or if prices are down, wait a few more, and cut them at 30. Logs are processed locally, or exported by the ship load to various Asian markets. India, China, Japan, Korea are all buying logs. 

The Southern US pine industry seems to have tried to replicate what NZ was / is doing, and it hasn't been so successful. Harder to access the markets that actually want the wood maybe? Or there is no local market for clear pruned pine? Locally small unpruned logs might fetch $70 a ton, but properly pruned butt logs are more like $270. Harvesting and trucking might be ~$50 in both cases. So the payout to the landowner is hugely different.

Mono culture and an introduced disease is always in the back of everyone's mind. General consensus is that it wouldn't "break" the forestry industry, just push Radiata off the top if some disease started hitting it. Slower growth / early harvest etc. There are several fungus and bugs that attack it, but seldom fatally. Worst case scenario we would have to fall back to other species of pine / cypress / cedar etc which will grow here, just not quite as fast. 

Hardwoods have been considered, but currently the economics don't quite stack up for plantation growth. Tasmanian Blackwood and E Saligna etc are planted on a small scale, but the steady markets aren't there for them. Our native trees generally take centuries to mature, so they aren't economic either, and the remaining old growth ones are locked up in reserves and national parks and heavily protected (quite rightly).You are free to plant some Rimu or Kauri to mill in the future, plan on maybe 200+ years. That's basically longer than Europeans have lived in NZ. 

[nativewolf]

I'm also curious as to the price advantage of  P. radiata vs P taeda.  Southern US basically pioneered genetically improved tree plantations starting at industry cooperative hq'd at Texas A&M but then moving to NC State where Zoebel did amazing work and brought that same knowledge set to GA, SC, NC VA (then several others followed).  Then after becoming world renowned he led the same progress in tropical fiber plantations Euc and other things for Brazil, Columbia, etc.  We sure are not getting $270/ton.  Like @Southside said landowners are getting from $20-30/ton and loggers maybe add 125% to that so they might be getting $75/ton.  Mills must be making out like bandits.  Granted this is not clear lumber however, they mills won't even process large clear logs (see all the complaints/comments on mills rejecting logs over 26" ).   Something is up.

@Southside -glad to hear I'm not alone wondering about that stupid pine tax.  I actually have enjoyed my interactions with many state foresters.  However, they are just too narrow minded and brainwashed.  

[Southside]

$60/ ton for poles, $43 for chip and saw, that's delivered.

[Ianab]

As far as I can see your mills aren't chasing the high value clear wood, so they are in the cheap "utility" wood market. Producing those clear logs takes more work up front in the first 7-8 years after planting. Not worth doing that unless the mills will pay a premium for them in the future. And they don't because there isn't a supply of logs. Chicken and Egg scenario. The NZ Radiata has also been cultivated for better lumber, not just high growth rates for pulp. Less juvenile wood, smaller knots, larger spacing between knots etc.

[Woodpecker52]

Just walk in any Lowes and see the rows of junk 2x4's and other plantation grown C#@P! , I had new  6x6 treated timbers laid on the ground for 6 months and were completely rotten!!!  Growth rings 1/4" apart!! Saw recently so called landscape timbers, Looked like veener log cores that were cut on two sides, majority were bent and bowed, they were $7.65 each such a RIP!  In twenty years they will be gluing sticker stock into 2x4's and telling you what a great product it is and how we must plant more pine plantations.

[Woodpecker52]

Come to think of it most should convert and make wood like products out of recycled soda/water bottles.  At least they would last longer than 6 months with ground contact!

[Clark]

I'm in NZ, so have a different perspective...India, China, Japan, Korea are all buying logs.

The Southern US pine industry seems to have tried to replicate what NZ was / is doing, and it hasn't been so successful.

I think the improvements from different silvicultural methods, genetic improvements and species selections are interesting and worth comparing between NZ and the SE US. The comparison of revenue between the two areas is less interesting because everything is different. Markets, exchange rates, cultural preferences in building, etc. are very different and  make meaningful comparison difficult.
Getting back to the southern pine markets...I did read that article by the Wall Street Journal (?) about the overproduction of pine on private land. Another example of over-production of the ag industry in America. From my perspective, unless larger, profitable markets are developed; supply decreases or a new use is developed for pine then I'm not sure how the market can have a meaningful and long-term uptick.
Nativewolf, I find your comments to be very similar to what I see going on up here. It boils down to foresters pushing species on sites where they don't belong. Aspen on sugar sand? Maybe it works elsewhere but here it's more often than not a mistake. Yet foresters will push that because it is the easy solution.
Clark

[Ianab]

Just walk in any Lowes and see the rows of junk 2x4's and other plantation grown C#@P! , I had new  6x6 treated timbers laid on the ground for 6 months and were completely rotten!!!  Growth rings 1/4" apart!! Saw recently so called landscape timbers, Looked like veener log cores that were cut on two sides, majority were bent and bowed, they were $7.65 each such a RIP!  In twenty years they will be gluing sticker stock into 2x4's and telling you what a great product it is and how we must plant more pine plantations.

The rip off there is in the treatment they are using on the logs. H1 is basically borate, and is useless outdoors. H7 is basically marine grade, and good for maybe 50 years as a wharf pier. It's also classed as toxic waste when you go and dispose of it. Several classes in between for different uses. Sounds like you got sold H1 when you needed H5.

And 1/4" growth rings is pretty poor. A good site will have them closer to 1". That wood can still be treated to make a ~50 year power pole. The cores from plywood logs are routinely processed into heavy fence posts, and hold up well after proper treatment.

And despite a glut of wood in parts of the US, wood is still being imported from NZ? So maybe work does need to be done on marketing and improving the quality of the end product? Not just accepting that it's "junk" wood to be sold at bottom of the barrel prices. That's a thing NZ exporters have had to overcome in other markets.