Soaring timber demand is good news for growers
If you are an owner of woodland with standing timber and looking to sell, then now is a good time.
Demand is high for both hardwood and softwood. Standing, roadside and delivered-in prices haven’t achieved this high level since the mid-1990s.
The reason mainly is lack of supply, particularly of oak, most of which is imported from France where harsh winter weather has affected extracting and haulage. In addition, UK processors since the last quarter of 2017 are now looking to restock their inventories at a time when less timber generally is coming on to the market due to commercial forest restructuring of PAWS (Plantations on Ancient Woodland Sites) and government broadleaved planting and tax policies implemented back in the 1980s.
The situation should benefit biodiversity and wildlife with owners responding to the growing demand as more woodlands are hopefully brought back into management.
All sectors are seeing an increase including the panel board, fencing, pallet markets and construction. I recently sold a parcel of oak sawlogs north of Shrewsbury. The price per hoppus foot at roadside has increased 40 per cent since 2015. At an auction recently, a parcel of oak achieved a UK record price of over £8 per hoppus foot (£222 per cubic metre)! Softwood species too are selling well depending on quality. Spruce clearfell with high log content is now fetching £40 to £50 per tonne and Douglas fir over £50 per tonne.
In the panel board and biomass sectors too demand has increased strongly and this trend is set to continue. One local woodchip supplier I know has a contract to supply 20,000 tonnes to its customers over the next year. It’s difficult to see where all that timber is going to come from if timber from the estimated 27,000 hectares of unmanaged woodland in Shropshire and the Marches remains in the woods. Food for thought for many local farmers sitting on unmanaged woods?
Of course, this current market situation favours the grower but the raw upward material cost has dramatically impacted sawmills and processors’ profitability. One mill in Falkirk, Scotland has already gone into administration with the loss of more than 80 jobs. Other processors are having margins squeezed.
Growers need to be aware however, that the present market dynamic will not last. Historically when supply has picked up there is a surge in volume pretty quickly resulting in a corresponding fall in prices.
Martin B. Jones is a chartered forester and managing director of the Woodland Stewardship Company, a UK-wide forest management consultancy based in Shrewsbury
