Featured Professional
Bill Bulligan,
Three Rivers Timber, Inc.
(1998)
International Lumber Markets and Ponderosa pine
International Lumber Markets and Ponderosa pine
No other specie of domestically processed wood today is influenced by international markets as much as ponderosa pine. Typically, regional sawmills cut four basic products from ponderosa pine; moulding, shop, one inch boards, and dimension lumber. Key to maximizing return to the sawmill is to cut as much high valued product, primarily moulding and shop grades, as can be recovered from a quality log. These selected grades are produced from clear, or nearly clear lumber.
There are several countries that produce significant volumes of lumber that are imported into the United States, and compete against our local ponderosa pine products. Most notably, Radiata pine from Chile and New Zealand produce high percentages of clear grades from fast growing, pruned forest plantations. Also, Mexican pine from mature old growth forests produce relatively high percentages of clear cuts. The influx of wood from these countries often keeps prices of high valued products depressed as the supply and demand system balances.
Levels of import are often driven by unusual factors. Weather in Mexico, insect damage in Chile, and crashing Asian markets for New Zealand Radiata pine will create constantly changing supply relationships. Domestic operators must understand what is happening in the international market to set local log prices at levels that will allow for adequate profit.
As substitute products, particularly from processed wood fiber, continue to develop, it will become even more challenging for local mill operations to establish ponderosa pine log prices. It will be particularly risky to be aggressive on long term raw material pricing.
While all this is difficult enough for
experienced mill operators to comprehend, it is virtually impossible to
explain to irate timber owners being offered $450/mbf for the same log
they sold four years ago for $650/mbf. However, it is further indication
of our need to understand expanding markets and a shrinking world.
Keywords: international markets, ponderosa pine, dimension lumber, Radiata pine, supply and demand, domestic market, log marketing
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