The Disconnect Between Log Prices and Lumber Prices in the US South
Southern yellow pine (SYP) lumber prices are at record highs. While this trend is benefitting southern sawmills, many timberland owners operating in the US South are asking the obvious question: Why are log prices in local markets not reflecting those of a surging lumber market?
The answer to this question is not as straightforward as it may seem. While log prices are to some degree tied to lumber prices, the association is a loose one. There are a number of mutual factors that affect both lumber and log prices, but each market also has independent drivers that do not overlap, which is why we see a disconnect in the markets.
What’s Driving Current Lumber Prices?
As noted above, southern yellow pine lumber prices have surged to record highs in 2018. Prices started out the year near $400/MBF and have since skyrocketed to nearly $550/MBF amid seasonal demand.