Southern Timber Market Trends

Transcription

1 Southern Timber Market Trends 2017 Tom Harris

2 Southern Timber Market Trends Objectives and Issues The World, United States, and US South Pulp and Paper Products Solid Wood Products US South Stumpage Markets and Prices 2

3 Review of Basics Supply Demand Prices Trade Wood is Good Objectives 3

4 Issues Globalization of Forest Commerce Dis-integration of Forest Products Firms Recession Shifting Demand Bio-energy Illegal Logging 4

5 Forested Regions of the World 5

6 World Markets 6

7 US South in World Context Forest Land 2% Timber Inventory 3% Planted Land 7% Industrial Roundwood 11% Wood Pulp 18% 0% 10% 20% 30% 40% 50% Source: FAO Global Forest Assessment 2014, FAO Yearbook, USDA Forest Service 8

8 World Forests World population is growing at 1.2% per year World forests are declining at -0.08% per year Tropical forests are still declining Temperate and Boreal forests are stable or increasing Managed forests increasingly important for production Forest Area per Capita is declining Source: FAO Population Reference Bureau. 9

9 Industrial Roundwood Production By Major Country Million cubic meters Source: FAO

10 Pulp and Paper Products 16

11 Pulp Production by Country 60 Million metric tons Source: Pulp & Paper International & FAO

12 Paper and Paperboard Per Capita Consumption 300 kg per capita USA Finland Japan Canada Poland China Brazil Russia Source: Pulp & Paper International & FAO

13 US Paper & Paperboard Production 4,500 Thousand tons 4,000 3,500 3,000 2,500 2, Source: AF&PA Paper Production Paperboard Production 22

14 US South Pulp Mill Capacity & Number of Mills Capacity mm tons per year Major Pulpmills Pulp Mill Capacity No. of Mills Source: USDA & TMS estimates 23

15 US South Pulpwood Consuming Facilities 2000-present Source: Wood Demand Report 24

16 Solid Wood Products 25

17 Sawnwood Production By Major Country Million cubic meters Source: FAO

18 Annual Housing Starts 2,500 2,000 thousand units 1,500 1, US Total US South Sources: U.S. Census Bureau (Single Family + Multifamily Starts) 30

19 Monthly Housing Starts: US Total & US South Seasonally Adjusted Private, seasonally adjusted 2,500 2,000 1,500 1, US Total US South Sources: U.S. Census Bureau (Single Family + Multifamily Starts) 31

20 1,200 US South Housing Starts vs. Pine Sawtimber Stumpage 1976 to 2016 $60 Starts (annual) 1, $50 $40 $30 $20 $10 US $ per ton (annual avg) 0 $ US South PSTs $/ton Sources: U.S. Census Bureau (Single Family + Multifamily Starts) 33

21 US Remodeling Expenditures: Improvement Only $175,000 $150,000 Million US Dollars $125,000 $100,000 $75,000 $50,000 $25,000 $ Improvement Only Sources: U.S. Census Bureau 34

22 US South Sawmill Capacity & Number of Mills Capacity billion bf per year Major Sawmills Saw Mill Capacity No. of Mills Source: USDA & TMS estimates 35

23 US South Pine Sawmills 2000-present Source: Wood Demand Report 36

24 75-mile Radius of Lexington, GA 37

25 US South Stumpage Prices 38

26 South-wide Annual Average Pine & Hardwood Sawtimber Stumpage Prices Hardwood sawtimber $ 32.79, Pine sawtimber $24.73(2016) $45 $40 $35 US$ per ton $30 $25 $20 $15 $10 $5 $ Hardwood Sawtimber Pine Sawtimber Source: U.S. Forest Service &. 39

27 South-wide Annual Average Pulpwood Stumpage Prices $12 $10 US$ per ton $8 $6 $4 $2 $ Hardwood Pulpwood Pine Pulpwood Source: U.S. Forest Service & 40

28 South-wide Annual Average Pine Sawtimber Multiple of Pulpwood Price 7 6 Multiple Source: 41

29 South-wide Annual Average Hardwood Sawtimber Multiple of Pulpwood Price 7 6 Multiple Source: 42

30 South-wide Pine Sawtimber Stumpage Price Trend (4Q1976 1Q2017) $/Ton CAGR 2.0% Source: 43

31 South-wide Pine Sawtimber Stumpage Price Trend (1Q2007 1Q2017) $/Ton CAGR -4.8% Source: 44

32 South-wide Pine Chip-n-saw Stumpage Price Trend (1Q1980 1Q2017) $/Ton CAGR 1.1% Source: 45

33 South-wide Pine Chip-n-saw Stumpage Price Trend (1Q2007 1Q2017) $/Ton CAGR -2.4% Source: 46

34 South-wide Pine Pulpwood Stumpage Price Trend (4Q1976 1Q2017) $/Ton CAGR 2.8% Source: 47

35 South-wide Pine Pulpwood Stumpage Price Trend (1Q2007 1Q2017) $/Ton CAGR 1.9% Source: 48

36 South-wide Mixed Hardwood Sawtimber Stumpage Price Trend (4Q1976 1Q2017) $/Ton CAGR 4.8% Source: 49

37 South-wide Mixed Hardwood Sawtimber Stumpage Price Trend (1Q2007 1Q2017) $/Ton CAGR 3.9% Source: 50

38 South-wide Hardwood Pulpwood Stumpage Price Trend (4Q1976 1Q2017) $/Ton CAGR 5.4% Source: 51

39 South-wide Hardwood Pulpwood Stumpage Price Trend (1Q2007 1Q2017) $/Ton CAGR 2.0% Source: 52

40 South-wide Nominal Stumpage Price Compound Annual Growth Rate Comparison Product Long-term CAGR 10-Year CAGR PST 2.0% -4.8% CNS 1.1% -2.4% PPW 2.8% 1.9% HST 4.8% 3.9% HPW 5.4% 2.0% Source: 53

41 South-wide Stumpage Price Compound Annual Growth Rate Comparison 6.0% 4.0% 2.0% 0.0% -2.0% PST CNS PPW HST HPW -4.0% -6.0% Source: Long-term CAGR 10-Year CAGR 55

42 US South Timberland Inventory Annual Growth Rates 7.0% 6.0% 6% 5.0% 4.0% 3.0% 3% 2.0% 1.0% 0.0% Softwood Hardwood Source: FIA FIDO

43 South-wide Pine Sawtimber Stumpage Price (4Q1976 1Q2017) $/Ton CAGR 6.0% CAGR -2.2% Source: 57

44 South-wide Pine Chip-n-saw Stumpage Price (1Q1980 1Q2017) $/Ton CAGR 4.4% CAGR -2.3% Source: 58

45 South-wide Pine Pulpwood Stumpage Price (4Q1976 1Q2017) $/Ton CAGR 5.5% CAGR -0.3% Source: 59

46 South-wide Mixed Hardwood Sawtimber Stumpage Price (4Q1976 1Q2017) $/Ton CAGR 5.5% CAGR 3.7% Source: 60

47 South-wide Hardwood Pulpwood Stumpage Price (4Q1976 1Q2017) $/Ton CAGR 1.8% CAGR 8.6% 0.00 Source: 61

48 Average Annual Inflation Rates CPI (All Items) 3.7% ( ) PCE (Personal Consumption Expenditures) 3.2% PPI (All Commodities) 2.9% Source: Bureau of Labor Statistics, Bureau of Economic Analysis 62

49 Southern Timberland Index (1Q1980 1Q2017) Q Q Q Q Q Q Q Q1 STI Value Index Source: 63

50 Southern Timberland Index 300 (1Q2007 1Q2017) 1Q 1980 = Q Q Q Q Q Q1 STI Value Index Source: 64

51 Timber Prices Are Not How are they different? Frequency Stock Prices Stock Prices Published more frequently Timber Prices Published less frequently Reporting Transaction-based Reported transactions and market surveys Unit Value Total Value Location/Geography All shares of the same type are equivalent in value Known; based on stock price and # of shares Geographically independent Variable Unknown Geographically dependent Source: 65

52 Some Factors Affecting the Value of Standing Timber Location Timber Grade Size (Product class) Species Stand Origin Harvest Volume Sale Type Harvest Type Contract Requirements Market Conditions Weather Logging Conditions Logging Costs Landowner knowledge of timber values 66

53 Timberland Investment Diverse End Markets Diverse Species Mix Growth opportunities 67

54 US South Timber Trends South continues to be a strong wood fiber region. Abundant Resources Excellent Competitive Basics Longer term trends positive Current Challenges Investment Opportunities 68

55 New Developments Cross Laminated Timber (CLT) Tall Wooden Buildings New Uses for Wood Nano Technologiy Improved Packaging 69

56 What do we need to do? Restore Research and Development Traditional Industries Program (TIP3) Infrastructure Development Vocational and STEM Training Update Building Codes 70

57 The US South s Competitive Advantage Favorable combination of: Location/Market Access Terrain Climate Species Wood Quality Infrastructure Management Government Private Onwership Investment Opportunities 71

58 Questions?