In contrast to the weather, the wood processing sector has seen an early season heating up reflected in record standing prices across all sectors.
So, demand continues to outstrip supply. Many growers have reached or exceeded both their volume and income targets. Effort is being put into bringing felling coups forward in Scotland, a short-term solution; whilst others are looking hard at the inventory and forecast figures, seeking for justification there to increase the volume brought to the market. Further south, FC volume short falls in conifer are being offset by the promise of 100K cubic metres of infected ash. Standing volume seems to be elusive at present but the season has yet to see the normal influx of parcels from the private sector. The promise of higher rewards might well encourage the woodland owner and investor to open the forest gate.
Some log supply volumes are being swallowed up in the biomass and energy markets. With falling production levels, reducing the quantity of sawmill chips, this too, is adding to the log shortfall. Susceptible to the grabbing of otherwise millable logs are the sawn pallet producers. This situation is more of a fundamental and long-term change rather than a seasonal one.
So, what of small roundwood? Fencing has yet to get into gear as projects are waiting for more favourable weather, but demand is expected to be intense as stocks are equally low. Pallet wood is being chased but with no expectation of further improvement to prices for boards. The colder weather has kept the interest in combustible wood volumes alive with ever growing capacity in new large and small energy schemes coming on stream. Worldwide OSB production has already been sold and raw material is required to meet that, in addition, the chipwood producers are competing for the wood being burnt.
This febrile market place has already taken its toll, yet might not be soothed easily, and some might be in jeopardy because of the fever. The expectation of some is that late in Q2 into Q3 we could see demand ease. In conclusion, whilst the UK are never going to be anything other than a net importer of wood and wood products, we will face ever growing competition for those products from across the world, making our home-grown product a valuable commodity. With good advice behind you, it is an excellent time to sell timber now; for those who can, why not consider planting some trees too!
Tim Leavers 15th March 2018