Community Agriculture Alliance: Local wood markets improve
March 7, 2013
Improving markets for wood products spell good news for forest landowners in northern Colorado.
Tough economic conditions during the past several years have affected the ability of private landowners to treat their forest land economically. With housing starts in the U.S. at record lows, the forest-products industry closed mills and lost capacity. Colorado's timber industry already was weak when the housing market collapsed. A decline in milling capacity in Colorado coincided with a large increase of logs available on the market because of the mountain pine beetle epidemic. Decreased demand and increased supply led to lower log prices, and the lower prices combined with the desire to remove beetle-killed trees created a significant amount of subsidized logging work. This created a confusing market situation for private landowners, most of whom have assumed they will have to pay to have logging done on their land.
Recent developments locally, along with a slow but steady improvement in national wood markets, might be improving the situation for local forest landowners who might be considering harvesting their timber. The most significant change has been the addition of new or reopened mills in our region. This has resulted in competition for logs, which has been missing during the past several years in our local log market.
Some of these new businesses include the reopened sawmill in Saratoga, Wyo.; a new sawmill in Parshall; a reopened mill in Encampment, Wyo.; and a new owner for a sawmill in Montrose. In addition to these new facilities, there are small sawmills that have weathered the recession and continue to operate in our region. There also are two pellet mills in Northwest Colorado, a new wood straw facility in Steamboat Springs and a new biomass facility being built in Gypsum. The net result is a healthier and more diverse wood market than we've seen in recent years.
Does all this mean your forest trees now have value? The answer is not simple. The factors that go into considering the value of a stand of trees, dead or alive, include the quantity to be harvested, the general quality of the logs, the cost of logging the wood, the market and the distance to the market. A significant part of the value of wood is taken up by the cost of harvesting the tree and putting it on a log truck for transport. If the price for wood delivered to the mill exceeds the costs of harvesting and shipping the wood, then the extra might be available as a stumpage payment to the landowner.
This is a simplified explanation, of course. Other factors add complexity. Wood quality is important to value, and as time goes on, the quality of standing beetle-killed trees continues to deteriorate. Specific requirements of a logging job might add to the cost of operating as will terrain, skidding distances and other factors. You should consult a professional forester before harvesting any timber. A professional forester can help you with your long-term forest management planning as well as help you assess your more immediate options for harvesting or conducting other forestry operations.
The Colorado State Forest Service or local consulting foresters are available to provide professional forestry services.
John Twitchell is a district forester for the state Forest Service.