5-3 IAT Lumber Nurseries

 Michael Stolp is vice president of market research and development for Northwest Farm Credit Services. Today he talks about the Northwest outlook for lumber and nurseries. 

“Forest Products -- Driven by increased demand and renewed optimism in the housing market, lumber and panel prices surged in late 2012 and the first quarter of 2013. As a result, many producers are operating profitably and expect to continue generating profits for most of 2013. Higher prices have encouraged some producers to add shifts and increase production levels. Several previously shuttered mills have been re-opened. So far, production increases have lagged increases in demand. Log prices have also increased, and are expected to remain strong through most of 2013. Log harvest may be constrained by the availability of contract loggers to meet increased demand.

Nursery/Greenhouse -- Housing starts are up from last year, but not yet at levels that will trigger significant demand increases for nursery stock. Although many producers report higher bookings, nursery sales will largely depend upon favorable weather patterns and homeowner choices to landscape or spend elsewhere. Supply shortages have created opportunities for some producers, with retailers more receptive to price bumps as long as product availability is assured. Sales for most producers should improve in 2013. However, the recovery underway is supply driven, meaning that opportunities for increased sales are the result of gaining market share from competitors.”