Image Credit: Forest2Market.com
Some important items to remember:
1 – A well diversified portfolio of timberland assets (i.e., age class, geography, timber market basins, customer exposures) will help mitigate market volatility exposure.
2 – Timber is approximately a 100 mile business from the location a tree is grown and the supply/demand drivers of relevance are specific to that basin. South-wide market averages offer great bigger picture themes, but may not (and often do not) represent conditions at the local basin level.
3 – Professional managers with significant operating footprints and a local presence within timber market basins, often experience results faster compared to the broader marketplace.
4 – Professional managers should be empowered with break even assessment tools to ensure timber sold today is offering the best outcome in contemplation of additional biological growth and of future market potential.
5 – Prices for finished goods (i.e., lumber) are not a good gauge of what to expect from raw wood market pricing (i.e., sawtimber, CNS, and pulpwood). Refer back to item number 1, 2, 3, and 4.