MN pulp prices?

[Sauna freak]

3 questions.  What kind of range of pricing is pulpwood stumpage getting in Northern MN these days?  Black Spruce, Jack pine, Aspen, and some other balsam, firewood and such.  Access is good, (likely winter chance), cut size would be aprox 30 acres pretty flat and contiguous near Hibbing. Some small islands left for wildlife/regen purposes, but I wouldn't ask a logger to "cut around the pretty ones" on such a small cut. Direct access off county road with gravel approach/landing area present. Private land with no permitting/wetland/riparian issues. I'll be cruising this weekend, but from GIS and site photos, it appears to be about prime harvest size, with aspen running in the 16" plus diameter and spruce and jack pine 12"+ DBH range and may run some sawbolt logs on the conifers.  There is also Red and White pine present of larger size, will need to look at that on the ground to assess size and quality.

Scale out pricing on same?  What kind of bid/cord range would you throw at such a piece?

Which would likely be a better and/or easier option from the landowner perspective?  My management goal would be rapid conversion of a portion of the purchase price to cash and essentially clearcut to open up property for regen and deer hunting or conversion to mixed agriculture.

Trying to make an informed decision about possible purchase of a parcel.  

[barbender]

I'd guess an average of about $20 a cord stumpage across all species, and that may be a little high. The softwood pulp market is soft right now. In fact, there is a bill in the legislature that would forgive timber sales that have spruce and balsam on them, so the loggers could get their deposit back. This is due to the Verso closure in Duluth. You can look at the MN DNR website to see what recent timber sales have gone for, as well.

[Sauna freak]

I'd guess an average of about $20 a cord stumpage across all species, and that may be a little high. The softwood pulp market is soft right now. In fact, there is a bill in the legislature that would forgive timber sales that have spruce and balsam on them, so the loggers could get their deposit back. This is due to the Verso closure in Duluth. You can look at the MN DNR website to see what recent timber sales have gone for, as well.

Yeah, that's kind of what I was afraid of.  I'd heard prices were down, but hadn't really been able to quantify how much.  $20 sounds about right, that's the range the neighbor got with a cut on similar timber winter 2018/19.  He had a bunch of large Jack and Red bolts that kind of saved the day though.  Hoping to find this hiding on the back of the parcel I'm looking at also.  GIS looks promising, but always hard to tell exactly what I'm seeing on there.

[barbender]

Prices were better 2018/19 unfortunately, our timber markets just continue to go the wrong direction🤷🏽‍♂️

[Kim_Ked]

I got $18/ton for the last load of pulp wood I sold, it went as Biofuel. 
I got just under $500 for a full load. Now, I cut it up and run over it. I cant haul it out of the woods for that price. Its better off as biomass in the forest.
Our provincial government got into a little hissy fit with the only Pulp Mill in our area and shut them down.   Many many folks out of work and now most of our wood products are worthless or barely hanging on. Even the stud wood mills pay less cause now they have tons of byproduct that will simply be waste as well. 
A few months later, wouldn't you know, the useless POS of a premier ran like a chicken when he knew he screwed us all over! He retired and appointed another to pick up his mess. 

The very dishonorable, mostly shameful, always talking but says nothing, Stephen McNeil. I hope he reads this!

Sorry for butting in, I knw this conversation is regarding pulp prices in MN, I just couldn't resist, its a sore spot for me.

[SwampDonkey]

Mine is all biofuel in the wood furnace ;D until prices are decent. Must be too much wood out there and not enough market. Everyone going paperless on their tablets and Ipads I guess. I'm a paper man myself, but we are going extinct. I see now, Ontario government pulled the plug on fax machines in offices recently. Newspapers have been dying the slow death for years. Utilities all want your emails so they don't have to send out paper bills. But hey, there's toilet paper. :D

[mike_belben]

I can empathize @Kim_Ked 


Without a semi and 1mil liability i couldnt sell (hardwood) pulp anywhere but to the local place that grinds and dies it, also for $18/t.  (Big pulp has ranged from 25-32/t where i cant go) I did one load to the grinder and realized that by weight it was about half the price of firewood at $50 a rick (which was already an insult before the stimmy era!) and a real chore for me to load, secure, haul and wait to get unloaded all on their schedule. Cheap and inconvenient.. My favorite.  


so i just set out to construct the most economical firewooding process i could by building everything from junk.  Just bring all the thinning wood home and fork it into my pile to process whenever i feel like it.  Ensures that i have winter money.. Only time our firewood sells.

[nativewolf]

Sympathy but part of a slow unfolding process.  I am surprised by the low value for sawn lumber.   I can see a future 15 years from now where there is very little paper other than toliet paper, paper towels, and some cardboard.  It will certainly put pressure on foresters to change forest management models to account for no value in thinnings.  

Some young forest economists should do a calculation of the tonnage of forest products and calculate how much of that is pulpwood.  Then do simulations based upon mill closures until we reach some steady point required to supply the US with tissue, boxes, etc.  Will be interesting to see total reductions in forest products trucked, reductions in trucking, etc.  Lots of analysis that would be informative.  Maybe a TIMO has already done that, @wudman ?

[timbco68]

Watch the upcoming St. Louis county timber auction results and you will have a pretty good idea of what it's worth. I think you could do a bit better on the aspen, 25$ at least.

[Wudman]

Sympathy but part of a slow unfolding process.  I am surprised by the low value for sawn lumber.   I can see a future 15 years from now where there is very little paper other than toliet paper, paper towels, and some cardboard.  It will certainly put pressure on foresters to change forest management models to account for no value in thinnings.  

Some young forest economists should do a calculation of the tonnage of forest products and calculate how much of that is pulpwood.  Then do simulations based upon mill closures until we reach some steady point required to supply the US with tissue, boxes, etc.  Will be interesting to see total reductions in forest products trucked, reductions in trucking, etc.  Lots of analysis that would be informative.  Maybe a TIMO has already done that, @wudman ?

One thing to take into account is the worldwide increase in population.  Within my lifetime, the worldwide population has doubled.  If I live to the age of my Grandparents, it is projected to double again.  With the mass migration from Central America, the U.S. population is headed upward as well.  Around the world, individuals are becoming more affluent.  The demand for paper products from China and India will continue to put upward pressure on the worldwide market.  The key will be the ability to compete in the worldwide market.  Transportation and production costs must be competitive.  

We are seeing a "push" to get away from plastic shopping bags.  A number of large retailers have committed to removing them from their stores.  The environmental push is to reusable bags, but I would bet that we see some kraft paper return to that market.  Amazon and other online retailers have increased demand in the box market.  That will continue forward on a worldwide scale.

Mill consolidation and government and environmental regulation are my biggest concern.  Within my operational area, WestRock now owns 4 paper mills.  Historically, these mills were owned by WestVaco, Chesapeake, Smurfit Stone, and Kapstone Kraft (Champion prior to that).  Four into one does not foster competition in the market.  The political climate in this country does not instill confidence.  The two primary political parties are such polar opposites that a company cannot invest in this country with confidence.  You start a business venture under one administration and then have a completely different set of rules 4 years later.  It's hard to dedicate capital into that situation.  I believe it would be virtually impossible to build a new pulp mill in this country at this point in time.  Give it a few years and I believe the pendulum will swing back the other way (at least for a short time).  At some point, this country will have to come to the realization that we have to feed our people.  Regulation will continue to kill business up to a point.  When folks start getting hungry (and it is coming) they will figure out that maybe they went a little too far with their political agenda.  It is not going to be us folks out in rural America that feel those pains first.

Localized areas have definitely suffered from closures.  The pulp market in localized areas is dead.  Those that could not economically convert to another product have shuttered.  The International Paper (formerly Union Camp) mill in Franklin, VA converted from fine paper to fluffed pulp (for making diapers and hygiene products).  They are the only thing keeping WestRock honest in the neighborhood.  
As for the question above, industry is addressing it in two ways.  The first is genetics.  Genetics is promoting better form, straighter stems with small compact limbs.  The second avenue is lower planting densities.  I have been a proponent of lower planting densities for years.  Utilizing the genetics, these trees will still self prune and produce higher value product.  I planted the tract that surrounds my home in 2001.  I planted 400 trees per acre which was 150 - 225 fewer trees per acre than I was planting on industry land at the time.  I thinned it @ 16 years old (contracted @ 15 and it sat a year) removing 36 tons per acre while maintaining 85 square feet of basal area.  It just survived one of the worst ice storms we have seen in decades with very little damage.  This "test" area justified my thinking.  In areas with weaker pulp markets, reduced planting densities can be your friend.  Engineered wood products can be as well.

Edit:  One other area that could help all parties concerned is corporate tax reform.  There is some very "creative accounting" that occurs on the corporate side with the current tax structure.  I work for both tax deferred (pension funds - money is taxed when disbursed to pensioners) and taxable entities (corporations and high net worth individuals).  For the deferred group, the goal is to maximize revenue.  You do what it takes to be most productive.  For the taxable entities, the first step is to determine the tax implications of that decision.....and then, should I do it today, next year, sometime in the future, or not at all.  The decision to close many of these mills centers around tax implications.  A flat tax with simplified tax code would remove this variable.  Biden's plan to increase corporate tax rates has no benefit to anyone.  Business will continue to work around increased tax burden and favor locations with lower tax burden and regulation.  I would like someone to ask the Progressive movement a simple question.  "Who owns these corporations?"  I am far from being rich, but I do own a few shares of stock here and there as well as through my pension plan and 401K.  I guess the upside is that my pine trees are growing at 10+% biological growth and I can grow a few veggies, kill a few rabbits, squirrels, and deer and keep from starving for a while when this country turns upside down.      


Wudman  

[mike_belben]

Great answer danny.