Southeast Lumber Market

By now we have all heard that lumber prices have gone through the roof. Many landowners are wondering when the prices will rise for their timber. As I see it there are several different factors that are driving prices and to truly understand the market we have to go back to the recession when sawmills closed and landowners simply left the timber on the stump. After several years of not harvesting mature timber and other timber stands coming to maturity, the Southeast was overrun with wood. Many of the sawmills started to reopen and timber production was back on the rise. Then in February of 2020 and the pandemic hit and everyone had to close down, including the mills.

What we didn’t expect and didn’t see coming was that all the people staying home and spending more time around the house, homeowners began home projects. Adding a deck or an additional bedroom was the trend by mid to late 2020 and increased demand for finished lumber.

Then the housing market took off. This is a very similar scenario as the lumber demand as these two markets go hand in hand. During the recession, all home building stopped and when home builders began to build again, they were very cautious as to the size of the project and tried to minimize risk by choosing in-town markets for their home building. At the beginning of 2020, all of the home building stopped due to the pandemic and not being able to field a crew of laborers.

So here we are today. Sawmills are being built and existing mills are being brought back up to capacity. There is no shortage of wood in the Southeast but there is a shortage of finished lumber and a very high demand for it and that is why lumber prices are so high right now. Some of the experts say that the lumber market will begin to even out by the fall of 2021 as new mills become operational and existing mills crank up to full capacity.

What can the landowner expect to see in the prices for their trees? Right now the landowner will see prices remain stable with a possible drop in price but the long-term forecast is healthy and long-term prices are expected to gradually increase as we begin to catch up on the current wood supply.