Salvage wood sales continue to impact Wisconsin wood prices
Other impacts, such as tariffs and COVID, are making their way through markets
MADISON, Wis. -- Stumpage prices in Wisconsin for the first quarter of 2020 reflected the tumult of the times. The principal factor in the state was the prevalence of salvage prices from cleanup harvests following the tornadoes and other high wind storms across the state over the summer.
Also, export sales were limited by trade tensions still impacting sales to China. While tariffs were lifted by China on hardwood imports in February, businesses there had very limited manufacturing operations due to the COVID-19 epidemic.
Most cordwood prices, as reflected in Forest Data Network index prices, showed significant declines across eight northern Wisconsin counties in the quarter. The range of cordwood price declines was from 4% to 81% from 2019 prices. The greatest declines were for spruce and basswood cordwood, which both declined by at least 80%.
The main exception to the cordwood prices was pine, which showed a healthy increase statewide. Prices were up in the Northwest Territory region, and up strongly in the West Green Bay region, but declined in the Northern Lakes region. Statewide pine cordwood prices were up 25%, but they varied dramatically among the three main Northern Wisconsin regions.
Sawlog sales during the quarter were limited in geographic range , but showed solid pricing, particularly in the Northwest Territory region, where FDN index prices showed good increases in maple, oak and pine sawlogs. In contrast, sawlog prices in the Northern Lakes region were flat or down (particularly for mixed hardwood and basswood).
Mixed hardwood prices statewide declined from pricing that had risen from 2016 to 2019, but were higher than the five-year period prior to 2016.
Good prices were paid for limited sales of oak and black walnut sawlogs during the quarter.
Index prices were recorded in northern Wisconsin in the quarter, to check out Forest Data Network Regional Pricing report subscriptions for the Great Northwest, Northern Lakes and West Green Bay regions click here.
Trade conditions, particularly on oak exports, should be improved by a lifting of Chinese tariffs for one year which began on February 28. (China had levied a 25% tariff on oak and 5% on some other wood).
However, Chinese demand is expected to be slowed by the need for much of Chinese wood manufacturing to have to restart after being closed due to the COVID-19 epidemic.
While other regions of the U.S. were not affected by Wisconsin’s severe summer storms, they were more impacted by trade issues being near export seaports. Also, closing of the U.S.-Canada border impacted sales to Canadian mills from New England and Pacific Northwest forests.
