Georgia Sawtimber Prices Held Steady in Q4 2023

Pine sawtimber and chip-n-saw stumpage prices in Georgia stabilized during the fourth quarter of 2023 following three consecutive quarters of decline. However, pine pulpwood stumpage prices continued to fall during the quarter. Hardwood sawtimber was the only product to see an increase in prices. Notably, these prices mostly remained above pre-pandemic levels.

According to TimberMart-South (2023), pine sawtimber prices averaged $30/ton in South Georgia, reflecting a 11% decrease year-over-year but still maintaining an 18% increase over its pre-pandemic level. In North Georgia, the average pine sawtimber price was slightly below $20/ton, a 19% decrease year-over-year.

The decline in pine sawtimber prices can be attributed primarily to the softened demand for lumber. Elevated mortgage rates, deteriorated housing affordability, and worries of an economic slowdown have cooled the general housing market. Single-family housing starts —a major driver for lumber and structural panel products—totaled 945,000 units in 2023, down 6% from the previous year and still below the long-term average of 1.1 million units.

The average pine pulpwood stumpage price was about $14/ton in South Georgia, representing a 26% year-over-year decline. Pine pulpwood prices in North Georgia averaged at $7.6/ton, down 5% year-over-year and 23% from the recent high in Q4 2021. The decrease in wood fiber prices can be attributed to several factors, including the weakened demand for paper and paper products, a rise in the utilization of recycled fiber, and a surge in the supply of mill residues resulting from recent expansions in lumber mills.

Compared to stumpage prices, delivered prices for pine sawtimber and pulpwood held better, down 6% to 8% year-over-year. The gap between delivered and stumpage prices in Georgia has widened significantly since 2020, primarily due to inflation, coupled with the continual reduction in Georgia’s logging workforce. Employment in Georgia’s logging industry dropped 28% from 5,600 in 2000 to 4,000 in 2022. This downward trend has persisted and continues to impact the industry and delivered prices.

Despite the current slowdown in housing starts, fundamental factors such as demographics, household formation, growing remote and hybrid workers, a robust job market, rising incomes, low existing home inventory, and the underbuilding over the past decade collectively indicate a favorable outlook for single-family housing starts if interest rates improve.

In 2023, southern softwood lumber capacity exceeded 28 billion board feet (BBFT), up 34% from 2017. Announced mill expansion and green field projects suggest an additional 2.5 BBFT of capacity increase by 2025 (Forisk, 2022). However, the 10-year accumulation of underbuilding and the resulting oversupply of sawtimber will likely continue to put downward pressure on pine sawtimber prices in the state.

Keep in mind that timber markets are largely local. Timber prices for a particular timber stand are influenced by timber species, quality and size of the trees, site accessibility, local timber inventory, mill types and capacities, logging capabilities, transportation capacity, and more.

References

Forisk. 2022. Forisk Research Quarterly: Fourth Quarter 2022.

Forisk. 2023. Forisk North American forest industry capacity database.

TimberMart-South. 2023. Market news quarterly.