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South Carolina Stumpage Price Trends and Hardwood Market Fundamentals

March 14, 2022

Stumpage Price Trends in South Carolina: 

SC Statewide Pulpwood Stumpage Price for Q4'21. Puskar Khanal, Clemson University.

SC Statewide Pulpwood Stumpage Price for Q4’21. Puskar Khanal, Clemson University.

Statewide average pulpwood stumpage prices for both pine and hardwood maintained their increasing trends in this quarter, indicating improvements in market fundamentals from COVID-related issues. On average, South Carolina statewide pine pulpwood prices were $10.81/ton, while hardwood pulpwood rates were $12.66/ton in the 4th quarter of 2021. The prices of pine and hardwood increased about 6% and 8%, respectively, over the rates observed in the previous quarter.

SC Statewide Sawtimber Stumpage Price. Puskar Khanal, Clemson University.

SC Statewide Sawtimber Stumpage Price. Puskar Khanal, Clemson University.

Statewide pine sawtimber stumpage prices observed a slight increase (less than a percentage), while the mixed hardwood sawtimber stumpage had a slight decline in prices (about 1%) in this quarter compared to the prices in the last quarter. On average, the South Carolina statewide pine sawtimber stumpage prices were $24.07/ton, and mixed hardwood stumpage prices were $24.38/ton in the 4th quarter of 2021. Hardwood prices were marginally better than the pine sawtimber prices ($24.38/ton vs. $24.07/ton) in this quarter, but the difference in price between these product categories was less than a dollar per ton, which may not be very encouraging for many landowners with hardwood trees. For the year 2021 (considering all four quarters), hardwood prices observed greater volatility than the pine sawtimber prices. In fact, mixed hardwood sawtimber prices have been consistently underperforming since this recent slide started from the 1st quarter of 2019. Current statewide average hardwood stumpage rates ($24.38/ton) are about 13% lower than the statewide average rates for South Carolina in 2017 & 2018. On the contrary, current statewide pine sawtimber stumpage prices ($24.07/ton) are about 4% less than the rates before 2019.

Timber Market Fundamentals Hardwood Market Fundamentals:

Hardwood markets operate somewhat differently and fragmented manner than the softwood market. Unlike pine trees, the hardwood timber market is comprised of several trees species such as oaks, gums, maples, hickories, walnut, etc. The products and by-products made from these tree species are of different types and qualities, such as furniture, flooring, veneer, and pallets. Each tree species and grade designation would differ in visual and physical attributes. Hardwoods are also used for making paper and paperboard items that require strength, such as bags and boxes, while pine trees are commonly used for making lumber, plywood, and paper. Demand and supply interaction in each final product category determines their stumpage rates. Hardwood demand market (consumption) has been broadly grouped into four categories:

  • Furniture (wood household, upholstered household, and office).
  • Construction and remodeling (flooring, millwork, kitchen cabinets, and other building products)
  • Industrial (primarily pallets and crossties) and other products (staves, handles, and assorted miscellaneous products)
  • International trade (exports and imports)

The market fundamentals might differ depending on tree species and product types. Prices for some hardwood species have recently surged, but others have seen a decline. Not all species have seen a decline (see link below). During COVID times, office furniture and remodeling may not be a priority, but house remodeling and building products demand seemed to increase. International export to Europe and Asia is an important factor affecting the southern hardwood market. The recent decline in hardwood prices for some species is also attributed to the weakness in these important markets.

Softwood Market Fundamentals:

Softwoods are more commonly used for making construction lumber, plywood, and pulpwood. The bulk of softwood goes into the construction industry, so U.S. domestic housing market is one of the major drivers of its rates. In South Carolina, seven big pulpwood mills create a niche market for a strong pulpwood stumpage market as the wood basin is location-specific. Demand for southern sawtimber is strong as sawmills continue to fill their inventory, increase capacity, and take advantage of the recent surge in lumber rates. However, it’s unlikely that higher lumber prices would result in an increase in stumpage rates because it’s a buyer’s market. Mills could buy from the southern oversupply of softwood to increase their capacity without paying more to the landowners.

Link: https://forestry.ca.uky.edu/extension/helpful-resources/kentucky-forest-sector-economic-contribution/delivered-timber-prices

Data credit: The sawtimber and pulpwood price data included in this newsletter are published with permission from TimberMart-South Athens, GA 30605 email tmart@timbermart-south.com.

Author(s)

Puskar Khanal, Cooperative Extension, Forestry and Wildlife Specialist

This information is supplied with the understanding that no discrimination is intended and no endorsement of brand names or registered trademarks by the Clemson University Cooperative Extension Service is implied, nor is any discrimination intended by the exclusion of products or manufacturers not named. All recommendations are for South Carolina conditions and may not apply to other areas. 

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