Lumber finally rises from the forest floor

Will trees like this someday find a home other than a burn pile? Along a road in Wyoming.
Will trees like this someday find a home other than a burn pile? Along a road in Wyoming.

This article on lumber markets seemed timely for a variety of reasons. It seems to me that we are looking at a window where, if we can find a solution, we will be helping rural communities, sustaining forests and in some cases offsetting costs of fuel reduction and hazard abatement (dead trees along roads, see photo). And for those which would have been otherwise burned in piles, helping to sequester carbon. Seems like a win win, if we all can agree on sustainable practices.

Here’s the link and below is an excerpt:

Lumber prices hit an eight-year high last week, thanks in large part to the U.S. housing market thawing out after a long deep freeze and rising overseas demand.

“The last few years have been a slow recovery from the recession for wood products,” Phil Tedder, a forestry consultant at Resource Economics, told the Los Angeles Times. “The main consumer was new housing, and that obviously wasn’t very good. But now things are picking up.”

California’s long-established timber industry is also hauling itself off the forest floor. According to the Times, sawmills shut down by the recession have reopened, and trucking companies that deliver cut wood out of state are seeing business improve. The newspaper also notes lumber prices have jumped 40% just in the past year’s time.

Also, China’s seemingly endless hunger for raw materials has extended to American timber. The U.S. Forest Service says log exports from Alaska, Washington, Oregon and Northern California increased about 9% in the third quarter of 2012 — with 62% of those West Coast log exports going to China.

In a report from ABC News, timber industry newsletter Random Lengths said the composite price for the framing lumber used in home construction was up last month to $415 per 1,000 board feet, compared to $284 a year ago. Plywood and paneling prices are up sharply as well.

3 thoughts on “Lumber finally rises from the forest floor”

  1. The best thing about a rise in timber prices is the fiscal ability to lump on more non-commercial activities needed in our forests. Unfortunately, some areas have virtual monopolies bidding on Forest Service projects. It might be more competitive to make more numerous smaller projects, so that contractors can compete with each other, and the public taxpayer gets a better deal. When I worked on the Allegheny, they often had a dozen bidders for their many small projects.

  2. Sure, perhaps we can cut down our forests in the USA and ship them to China.

    However, I don’t at all buy into the notion that the “US Housing market is thawing out.” The following article provides some good facts and figures, which the big banks and the big media outlets (largely owned by the same big banks) continue to ignore, as they cheer on more development, consumption and personal debt.

    For example, when you currently have 42% of the homes in Sacramento underwater with a “negative equity” averaging $100,000 below current market values, but then a veteran Sacramento realtor claiming “I’ve also never seen a market turn so quickly” you get a sense that the bubble is still bursting, and will continue to do so for some time.

    Of course, that veteran realtor has laughed all the way to the bank (driving his new Mercedes-Benz E63 AMG, no doubt)….first making money hand over fist during the 1990s to 2000s bubble, and now making money hand over fist due to interest rates in the 3% range, which has big-monied investors or the 1%-ers (not struggling families) buying homes like crazy.

    And don’t even get me started about the state of commercial real estate in this country. If you think we had a bubble burst with housing, let’s see what happens with all this commercial real estate, especially in an era of growing numbers of remote workers, on-line shopping and/or people just generally not having much money to spend any more.

    How all this impacts the US lumber industry, lumber prices and logging on national forests, I suppose, is anyone’s guess. But I’m not sure how anyone can honestly be too optimistic about the future.

    NY Times Ignores Banks’ Latest Role In Distorting The Housing Market
    March 22, 2013
    By Steven Rosenfeld
    Source URL:

    The New York Times doesn’t get it. Thursday’s front page reported [3] that the U.S. housing market was again booming, with demand rising and builders racing to catch up. “After six years of waiting on the sidelines, newly eager home buyers across the country are discovering that there are not enough houses,” it breathlessly began.

    The article cited the housing market in Sacramento, California, where home values have tracked the national average—rising from 2000 to 2005, falling in 2006 and bottoming out in 2009, and climbing back up today. “In my 27 years, I’ve never seen inventories this low,” it quotes a local realtor. “I’ve also never seen a market turn so quickly.”

    The problem with Catherine Rampel’s report is that her analysis completely omits one of the biggest drags in the American economy that is creating an artificial shortage of homes for sale and inflating home prices. That trend is how banks are not willing to revise loans of people with ‘underwater’ mortgages, or who owe more than current home values.

    Amazingly, one of the sources [4] cited by the Times, Zillow Real Estate Research, notes that as of late February, 41.7 percent of the homes in Sacramento were underwater, or had “negative equity” averaging $100,000 below the current market values.

    The Times correctly noted that large scale investors have been buying up foreclosures and so-called starter homes, based on business models that envision renting the properties. But nowhere does its report mention that housing market “scarcity” is a direct result of banks refusing to modify mortgages for more than a third of Sacramento home owners.

    As Alternet has reported [5], this refusal by banks is a tremendous market distortion that is dragging down local economies across America. Indeed, Zillow research says that 19.4 percent of homeowners are underwater nationwide. “In total, underwater homeowners owe $1.01 trillion more than their homes are worth,” its February 2013 report said [4].

    Now, imagine, if lenders had to write off a portion of that debt and in so doing freed up hundreds of billions of dollars that could be spent on Main Streets across America. Or, if the federal government created an ultra-low interest program to help these borrowers pay the banks in full but then have much lower interest payments, which could mean saving several hundred dollars a month or more.

    “They’re not offering that. That’s the problem. It’s not there,” said Brent White, a law professor [6] at University of Arizona and author [7] of Underwater Home: What Should You Do If You Own More On Your Home Than It’s Worth.

    The Times report simply ignores the reality that 13.8 million homeowners nationally—Zilliow’s late February figure—are underwater. Instead, it talks about home builders trying to get new home permits from local authorities and then airs their gripes about the shortage of wanted construction workers. Once again, the lenders, many of whom tossed caution to the wind when making these loans, come out on top.

    You can bet that many lenders with underwater loans will be lending money to builders and new home buyers. That capital is underwritten by underwater loans with payments with interest rates that are often double what offered for today’s home loans. But the federal government isn’t stepping in to help these homeowners to boost the economy. And the national newspaper of record doesn’t consider this topic newsworthy.


  3. I agree that a temporary housing bump cannot be relied upon to keep prices up. There needs to be more diverse uses for wood, especially from small logs. I really don’t trust the mills when they say they need more access to Federal wood. If the demand goes up for wood not going to the housing industry, then we really should be doing more commercial thinning. Let’s make more stuff out of wood, instead of Chinese plastics made with Arab oil.


Leave a Comment

Discover more from The Smokey Wire : National Forest News and Views

Subscribe now to keep reading and get access to the full archive.

Continue reading