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Soaring Lumber Costs Break Half-Century Price Slump

Record-high lumber costs are lifting southern timber prices from a long slump, according to The Wall Street Journal (subscription).

What’s going on: “Saw timber rose to $26.44 a ton during the fourth quarter, according to TimberMart-South, a pricing service affiliated with the University of Georgia’s forestry school. Though saw timber prices have bounced 18% from the 50-year lows of summer 2020, they remain well below the $40-plus that big logs fetched two decades ago.”

  • Prices of lower-grade pine timber, used for paper and cardboard, have risen even more sharply than saw logs, thanks to soaring e-commerce purchasing (and shipping) since the start of the pandemic.
  • A hot housing market and problems producing lumber in British Columbia led to record prices for southern yellow pine two-by-fours this week.

The background: “The weighted average price paid to southern landowners for all types of timber rose 21% over the past year to its highest level since late 2007, just before a speculative housing bubble burst and the mortgage market unraveled.”

  • That bust ruined the demand for lumber as many trees planted in the 1980s were ready to be cut, sending prices plummeting.
  • The pandemic-induced housing and renovation boom has helped boost those prices—and driven increased investor interest in timberland.
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