Thursday, August 22, 2013
Forest2Market has added three 5-year strategic stumpage price forecasts to its Forest2Mill product line, a suite of services designed for buyers and sellers of logs and other wood raw materials. These price forecasts expand upon the 24-month operational forecasts for local stumpage prices that Forest2Market has offered in the US South since 2005.
Pete Stewart, Forest2Market’s founder, President and CEO, noted that the development of these products followed a familiar pattern: “We developed these forecasts for the same reason we develop all of our products, at the request of our customers. These customers have used our 24-month forecasts to support their short-term operational raw material inventory management for more than 8 years. Because they also have to make strategic decisions, they asked us if we could provide longer term outlooks. Using the same quality data and rigorous discipline that powers our 24-month forecasts for local stumpage prices, we developed a solution that works for them: a series of 5-year forecasts to guide strategic decision making.”
Forest2Market offers three southwide 5-year forecasts, one for pine sawtimber and chip-n-saw, a second for pine pulpwood and a third for hardwood pulpwood. Each begins with an analysis of timber supply and a review of historical demand and prices, and each includes an analysis and forecast of the economic factors that influence price, a demand outlook, a 5-year quarterly stumpage price forecast and an examination of price seasonality and volatility.
Suzanne Hearn, Vice President of Marketing and Sales, explained the value of the forecasts for budget preparation. “Budgeting is rarely easy. While extending the historical trend line forward may be adequate in less dynamic economic times, that approach is likely to cause firms financial harm today. Because of recent unpleasantness in the economy and halting progress in the housing market recovery, the current standing timber inventory is heavily skewed from the normal trend line. As a result, timber prices are more likely to be skewed away from trend. In times like these, budgeting requires better data and a more nuanced view of timber markets. Forest2Market’s 5-year stumpage price forecasts provide this more nuanced view.”