Prices of Red Oak?

[duckman]

I was wondering if the price of Red Oak is dropping all over or just here in central Pa.  We had our timber looked at in Feb.  now the price has come down about 30% and the forester wants 2 years to cut it. 

[Bro. Noble]

The prices of oak grade lumber has really gone to pot in south Mo. this spring,  especially the lower grades.  One major flooring plant nearby shut down completely for a short while,  and none of the buyers are taking on new suppliers.  The graders where we sell have really got strict as well.  If this continues,  I look for some sawmill auctions.

If it were me,  I would wait for a stronger market to sell my oak timber.  Is your logger wanting to buy on the down market and wait till the market improves to cut them?  I see a red flag!!

[Ron Scott]

Yes, the price of red oak has dropped here also. We aren't harvesting any right now, but mainly due to the oak wilt safeguard until August 1.

[Ron Wenrich]

We;ve had some major problems in the PA markets in the past few months.  Pennsylvania House has shut down and moved to China.  That has effected Catawissa Lumber, who supplied a lot of panels to PA House.  That caused their inventory to back up, and now they are trying to pare it down.

So, all those guys that were sending red oak to Catawissa have now been trying to find other markets.  That backs up over a very large area.  Couple that with the veneer season being over, and you have a problem.  There are also large amounts of logs in the yards, thanks to a good logging year.

You can also toss in a cyclical market turn where maple and cherry are the predominant species and oak is starting to take a back seat.  It isn't so much that the price has dropped, just the demand.  Lumber markets are very soft.

I don't look for any improvement in the near term.  Housing starts have been down in the northeast.  Interest rates continue to creep up, and the Europeans have been having a slump as well.  A lot of US oak used to be exported to Europe.  I have seen a turning away from oak in the cabinet business in the past few years.  Just look at Lowe's and their predominant displays.  They started putting maple out front about 5 years ago.  I saw the trend then and knew oak has probably run its course.

Now, that doesn't mean that your oak timber will be worthless.  I remember what happened to tulip poplar back in the '70s.  It was more valuable than red oak, at the time.  When oak started its rapid price increase, poplar stayed about the same.  Its still about the same price as it was before.  Oak prices will remain about the same, just harder to move.

My 2 cents.

[jrdwyer]

Red oak is pretty much down all over.  A quality stand of timber will generally average #1 common and green #1 common red oak lumber is down 20% in price from early Sept.  The lower grades are down the 30% you mention. So if it is possible, postpone the sale for a year or two until red oak comes back. It probably will. But as a worst case example, yellow poplar peaked in early 2000 and then slowly declined is only now showing some upward signs again. It often takes a lot of patience in this tree game.

As far as a two year contract, that is not out of the ordinary for larger timber buyers as they plan well in advance and generally have a million or more board feet purchased at any given time. Often you may have to sacrifice some money and go with the second or third high bid if you want a shorter contract. Compromise, definitely another part of the tree game.

[Goose79]

I just want to hijack your thread for a moment.

I wanted to see how White Oak is doing in your area?

[FiremanEd]

Goose,

White oak is holding it's own, 1's & better have actually gone up on some areas. 2's & 3's are holding pretty good.

Red oak is so far gone it's scary. I'm trying not to buy any if I can help it but have to take what I can get. If it wasn't for the tie & timber market holding strong I wouldn't be able to buy any red aok at all.

Eddie,
Va

[jrdwyer]

Just checked the recent red and white oak prices again and #1 common red oak is down a whopping 27% from early Sept. 2004. White oak #1 common is down only 15% for this area. Quite a depressing market, especially considering that a majority of the upland forest in this area contains red, black, and white oak.

White oak has better veneer markets around here than red oak and there is also a substantial stave log market for white oak.

My take on this oak problem is that consumers now want minimal grain  (maple, cherry, alder) with cabinets and with flooring they want Brazillian cherry, Brazillian walnut, merbau, something exotic, etc. and on top of this we have huge imports of finished wood products using cheaper alternatives like rubberwood that once might have contained some domestic woods.

I hope this bottoms out soon and we get some price stability with oak.

[OLD_ JD]

and a way that can be good to stabelize the resource,if oak market is slow ,it's maybe time to harvest other species of tree :...whene i was a kid,my father was using black cherry as 'skid' is oak saw log :,coze they where no market for cherry at that time,same whit basswood,commun to find mature bassewood who they $$ good price now and some nice maple stand,tuff tho harvest w\out breaking any good future trees :(

[jrdwyer]

I sure wish we had more variety of merchantable, overstroy tree species in the forests around here. As one example, on a recent timber sale of very typical upland timber in western KY, red and white oak species made up 54% of all volume on the tract followed by hickory at 21% and various other species all lower than 8% each making up the rest of the marked volume.

So it comes down to either selling oak stumpage at lower prices or advising my clients to just wait until the market gets better before selling. I have to be honest with them on this point even though I won't make a commission. Or course, some will sell no matter what the current market is doing.

In the last downturn in late 2000-2001 there were a substantial number of landowners in this area who postponed selling their timber and buyers frequently mentioned to me the limited number of tracts available to buy. One buyer even blamed the local forestry publication for telling landowners the market was soft and hinting that they should not sell until things got better. For those who did sell, the number of bids received was generally high and eventually things did get better.