In the DNR February Economic & Revenue Forecast, lumber prices have increased substantially since they bottomed out at $156/mbf in January 2009. The lumber prices shown on he chart are from Random Length’s Coast Dry Random and Stud price series. After some extreme volatility in 2010, regional lumber prices generally rose through 2011 and 2012. More recently, they hit $425/mbf in April 2013, an impressive 44 percent year-over-year increase. The lumber price fell off steeply to $362/mbf in May but a drop in this time period was predicted by forest economists because of the jerky response of bringing lumber production back on line.
Forest Economic Advisors forecasts flat lumber price growth over 2014 because mills and dealers are now better adapted to the surprising lumber demand of 2013. However, they expect that lumber prices will climb through 2015-2017 on the back of stronger housing markets and constraints on capacity.
Note the diverging trend between lumber and log prices from late 2011 into 2013; it suggests that potential profit margins for lumber mills in the Pacific Northwest have increased throughout this recent period.
See the complete DNR Economic & Revenue Forecast online.
foreststewardshipnotes.wordpress.com 