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Future markets for woodland owners

June 17 2015

Atllantic Farm Focus, Dan Woolley
Published on June 17, 2015

Maine-based wood broker Andrew West prognosticated on future markets for wood products during the Federation of Nova Scotia Woodland Owners’ annual meeting in Truro on June 6.

 

 

The provincial representative at H.C. Haynes Ltd. reminded woodland owners that although U.S. housing starts have been good recently, lumber prices don’t always mirror housing starts.

In fact, the price of lumber has declined recently and he expected it would go down another $5 a tonne within the next month.

The price for Oriented Stand Board fiber went up markedly after the permanent closing of 35 per cent of the North American OSB mills in 2011. While OSB fiber peaked at $430 a few years ago, it is down now to its break-even price of $270 MSF, West said.

By contrast, he noted Kraft pulp is now up to $980 a tonne from $879 in 2012-2013. There is good money for woodland owners in their wood destined for Kraft pulp. “Our pulp mills are currently in good shape. You need the pulp market for low value woodlots.”

West defended the much-maligned Northern Pulp in Pictou County. “If we are hostile to Northern Pulp; the word will get around the world (that) Nova Scotians are business unfriendly.”

Northern Pulp is needed, because without it log and pulp wood prices will decline, he insisted. “If Northern Pulp disappears; we are going to hurt badly because they handle a lot of low value wood chips, hard woods and poplar.”

He also felt the value of small woodlands would crash, noting how the pulp price crashed in 2011-2012 with the closing of both New Page and Bowater Mersey. “Pulp went from $40 to $28 overnight.”

West observed the top stumpage rate for pulp currently is $35 a tonne. Hardwood logs “are really good money” getting $1,200 per tonne.

Instead of selling hardwood for pulp, he suggested selling it for firewood to make more money.

“Biomass is a major part of your woodlot. Following harvest, if you take out all the trash it makes the next silviculture entry much easier. Even if you don’t make money; it will make your woodlot much better.”

As for specialty products like peeler logs, poplar has its highest and best value as veneer, West said. Spruce veneer logs cannot be shipped elsewhere in Canada and the U.S. because of the Brown Spruce Longhorn Beetle. But he warned, there won’t even be an export market for pine if Northern Pulp closes.

Because of freight costs, softwood will not be shipped great distances in North America. “The closest mill always wins.”

He reminded delegates about regional variations in wood quality; stumpage price variations due to harvest type; the value of the harvest and the cost of wood roads. Nevertheless, the prices and specifications between logs and studs are very close.

Although silviculture dollars are available, planting can also be limited due to constraints on herbicide use.

Biomass, West said, is helping the market for poplar and the demand for poplar is up in Maine and New Brunswick, “and this will increase our price.”

All markets are important to woodland value and are currently strong. Therefore, landowners should know their woodlot to take advantage of all its merchantable forest products when they are at a premium price.

West also believed that saw logs will get smaller and mills will make greater use of lamination, gluing them together.

There will be wood shortages geographically, West said, adding that Nova Scotia woodlands quickly regenerate after harvest.

He also recommended spending forest management money where trees will grow back quickly. “Don’t spend money on swampy land.”

Location

Federation of Nova Scotia Woodland Owners
PO Box 358, Brookfield, Nova Scotia
B0N 1C0

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Email: info@fnswo.ca

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