Division of Forestry WI Dept of Natural Resources 6/2014

Trends in volume and removals by grade

Trends in volume and removals by region

Trends in volume and removals of sugar maple

Trends in volume and removals of northern red oak

Sawtimber price trends & the housing market

Trends in harvesting practices: distance to nearest road

Trends in harvesting practices: land slope

The volume of sawtimber has increased in the last 10 years: 45% for grades 1 and 2 and 8% for

grades 3, 4 and 5. However, removals of grade 1 and 2 timber have decreased and removals of grades 3, 4 and 5 sawtimber have increased. This is especially true in northern Wisconsin.

The volume of grades 1 and 2 sugar maple and northern red oak has increased since 2003.

Prices, however, for high grade timber of both species have fallen since 2005. This trend mirrors developments in home construction during this time period.

Harvesting practices have also changed, increasing removals on more accessible land: nearer

to roads and on flatter slopes. This may be a result of the higher costs of extraction in more remote terrain and the lower economic returns for stumpage.

Trends in volume and removals by grade

In both 2007 (2003-2007) and 2012 (2008-2012), an average of

1.5% of sawtimber volume was harvested each year in Wisconsin,

from a low of 0.7% in the Southeast to 1.8% in the Northwest.

However, between the two periods, removals of high grade

(grade 1 and 2) sawtimber fell 26% while removals of lower grade

timber increased 10% (Figure 1). The available volume of grade 1

and 2 sawtimber increased 27% while the volume of grades 3, 4

and 5 remained unchanged.

This difference can also be seen by looking at average

annual removals as a percentage of total sawtimber

volume. For all grades combined, this ratio remained

statistically unchanged between 2007 (2003-2007) and

2012 (2009-2013).

There is a difference however between grade

categories. Percentage removals fell for high grade

sawtimber (from 1.8% to 1.0%) but increased for

lower grades (from 1.4% to 1.6%).

0

5

10

15

20

25

30

35

40

Grade1&2 Grade3, 4 & 5

Bill

ion

bo

ard

feet

Volume of sawtimber

0.0

0.1

0.2

0.3

0.4

0.5

0.6

Grade1&2 Grade3, 4 & 5

Removals of sawtimber

2007

2012

Figure 1. Change in volume and removals of sawtimber between 2007 and 2012 (FIA data)

Figure 2. Percentage of sawtimber volume removed: 2007 and 2012 (FIA data)

1.8%

1.0%

1.4% 1.6% 1.6%

1.4%

0.0%

0.5%

1.0%

1.5%

2.0%

2007 2012 2007 2012 2007 2012

Grades 1 & 2 Grades 3,4 & 5 All grades

Ratio of sawtimber removals to volume

Trends in volume and removals by region

Central

Northwest

Northeast

Southwest

Southeast 0.5%

1.0%

1.5%

2.0%

2.5%

2007 2008 2009 2010 2011 2012 2013

Removals to volume: Central

Grade 1&2 Grade 3, 4 & 5

0.5%

1.0%

1.5%

2.0%

2.5%

2007 2008 2009 2010 2011 2012 2013

Removals to volume: Northwest

Grade 1&2 Grade 3, 4 & 5

0.5%

1.5%

2.5%

3.5%

2007 2008 2009 2010 2011 2012 2013

Removals to volume: Southwest

Grade 1&2 Grade 3, 4 & 5

0.0%

1.0%

2.0%

3.0%

2007 2008 2009 2010 2011 2012 2013

Removals to volume: Southeast

Grade 1&2 Grade 3, 4 & 5

0.5%

1.0%

1.5%

2.0%

2007 2008 2009 2010 2011 2012 2013

Removals to volume: Northeast

Grade 1&2 Grade 3, 4 & 5

Figure 3. The ratio of removals to volume by region.

Trends in volume and removals vary

not only by grade but also by region

(Figure 3). In 2007, the ratio of

removals to volume was higher for

high grade sawtimber (grades 1 and

2) than for lower grades (3, 4 and 5).

But by 2013, the trend had reversed

everywhere except southern

Wisconsin.

Every region has seen a decrease in

the ratio of removals to volume for

high quality sawtimber. The

percentage of harvested grades 3, 4

and 5 sawtimber increased in

northeast and northwest Wisconsin.

The volume of grades 1 and 2 has

increased in every region but

especially in the north. This is largely

due to increases in the volume of

high quality northern red oak, hard

maple and eastern white pine.

Trends in volume and removals by species:

Sugar Maple

The volume of sugar maple (Acer sacarum) of all grades has increased since 2003, 20% for grades 1 and 2 and 29% for grades 3, 4

and 5 (Figure 4). Removals on the other hand have fallen by 50% since 2003.

Prices for sawlogs and veneer peaked in 2005-2006 at which point grade 1 and 2 hard maple sawlogs were valued at about

$900/MBF and prime veneer was valued at about $1,500/MBF. After falling to a low in 2009-2011 ($370/MBF for 1 & 2 sawlogs and

$1,030/MBF for veneer), prices are beginning to recuperate but removals have yet to increase in response.

0

0.04

0.08

0.12

0.16

0.2

0.24

0.28

0.32

0.36

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Re

mo

vals

(b

illio

n b

oar

dfe

et)

Vo

lum

e

(bill

ion

bo

ard

fee

t)

Trends in volume and removals of sugar maple

Volume grade 1&2 Volume grade 3, 4, 5 Removals all grades

Figure 4. Volume of hard maple by grade (2013 FIA data) and removals for all grades combined (2008-2013 data).

Trends in volume and removals by species:

Northern Red Oak

The volume of northern red oak (Quercus rubra) of all grades has increased since 2003, 31% for grades 1 and 2 and 14% for grades 3, 4

and 5 (Figure 5). The volume of high grade red oak sawtimber increased in all regions but especially in southwest Wisconsin (46%) and

in the Northwest (31%). Removals have fallen 41% since 2003.

Prices for sawlogs and veneer peaked in 2003-2005 at which point grade 1 and 2 red oak sawlogs were valued at about $720/MBF and

veneer was valued at about $1,400/MBF. After falling to a low in 2009, prices are beginning to recuperate but removals are still low.

0

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

0.1

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Re

mo

vals

(b

illio

n b

oar

dfe

et)

Vo

lum

e

(bill

ion

bo

ard

fee

t)

Trends in volume and removals of northern red oak

Volume gr 1&2 Volume gr 3, 4, 5 Removals all grades

Figure 5. Volume of hard maple by grade (2013 FIA data) and removals for all grades combined (2008-2013 data).

.

Sawtimber price trends and the housing market

One reason for the decrease in removals of

grade 1 and 2 sawtimber despite the

availability of volume may have to do with

trends in sawtimber prices.

The two major grade 1 and 2 sawtimber

species in Wisconsin are hard maple and

northern red oak. Both show a decrease of

about 45% between the peak in prices in

2005 and the lowest point in 2009 (Figure 6).

Both have rebounded about 25% since 2009

but are still well below their peak.

The trend in home construction follows a

similar pattern. New building permits for

private homes fell 73% between 2005 and

2009 and rebounded 42% between 2009 and

2012 (Figure 7).

0

500

1,000

1,500

2,000

2,500

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Tho

usa

nd

per

mit

s

Home construction permits

Figure 7. New Privately Owned Housing Units Authorized by Building Permits in Permit-Issuing Places (https://www.census.gov/construction/pdf/bpann.pdf)

Figure 6. Average prices for grade 1 sawlogs. Source: Timber Mart North, George Banzhaf & Company, 8301 N. Allen Lane, Milwaukee, WI 53217

0

200

400

600

800

1000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

201

4 d

olla

rs

Price trends for grade 1 and 2 sawtimber Hard maple Red oak

Trends in harvesting practices: distance to nearest road

Not only did the ratio of removals to

volume change between 2007 and

2012 but harvesting practices changed

as well.

In 2012, sawtimber volume increased

in all forests, both near roads (<= 1,000

ft) and more distant (>1,000 ft).

Removals, however, increased 22% on

forest land located nearer to roads and

decreased 26% on forestland located

at a greater distance (Figure 8).

This trend was true in all regions of

the state (Figure 9). Higher rates of

road construction in the southern part

of the state may artificially increase

numbers there.

0

10

20

30

40

<= 1,000 ft > 1,000 ftB

illio

n b

oar

d fe

et

Volume of sawtimber

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

<= 1,000 ft > 1,000 ft

Removals of sawtimber

2007

2012

Figure 8. Volume and removals by forest distance from nearest road.

Figure 9. The percentage of all removals that are located within 1,000 ft of the nearest road by FIA region as

delineated in Figure 3 .

46%

37% 34%

21%

31%

55%

41% 43%

77%

53%

0%

20%

40%

60%

80%

Central Northeast Northwest Southeast Southwest

Percentage of removals within 1,000 ft of road

2007

2012

Trends in harvesting practices: land slope

Harvesting practices also changed with

regards to removals on land of differing

slope. Again volume increased in all

forests, but removals increased 13% on

flatter slopes (0-5%) and decreased

25% on forest land with a slope over 5%

(Figure 10). This trend does not apply to

northwest Wisconsin however (Figure

11).

As with road distance, harvesting

seems to have moved to areas of

greater accessibility where extraction

would be less expense. Sawtimber

volume has increased in both remote as

well as easily accessible lands, but

when prices are low, loggers may not

want to spend the extra money to

reach more inaccessible forest.

0

10

20

30

40

0-5 percent 6+ percentB

illio

n b

oar

d fe

et

Volume of sawtimber

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0-5 percent 6+ percent

Removals of sawtimber

2007

2012

Figure 10. Volume and removals by forest slope category.

60%

46%

56%

26%

5%

71%

58% 52%

68%

29%

0%

20%

40%

60%

80%

Central Northeast Northwest Southeast Southwest

Percentage of removals on 0-5 degrees slopes

2007

2012

Figure 11. Percentage of removals on lower slopes by region of the state.