10-21 IAT Forest and Nursery

Today, Northwest Farm Credit Services VP - Market Research and Development, Michael Stolp takes a look at forest products and nurseries. "Volatility in pricing and demand continues in the forest products industry. Profits for forest products manufacturers remain dependent on log and product price structures. Lumber and panel prices stabilized following steep declines during the second quarter. Lumber and panel prices were pressured by over-bought inventories and rising production. Full log yards and lower lumber and panel prices pressured log prices lower in July and August. However, log prices stabilized in September, attributed to improved lumber and panel prices and a slowdown in log harvest due to fires. The housing market recovery continues to support improved forest products prices. Prices are expected to rise overall, but the trend will include periods of price increases and decreases.

The nursery industry recovery is underway. Many producers report increased sales activity for 2013, and strong early bookings for 2014 sales. Producers are also able to increase prices for the first time in several years. Improving sales are largely driven by shortages in some varieties of plant material and fewer producers supplying traditional buyers. The industry has yet to see an increase in demand directly tied to improvement in new residential or commercial construction. However, continued recovery in the housing market points to rising demand for plant material in 2014 and beyond."