Explaining the disconnect between lumber and timber prices
Pundits are wondering “Lumber prices are soaring. Why are timber owners miserable?”1 They declare “Lumber prices soar, but logs are still dirt cheap”2 Indeed, lumber prices reached record highs at levels perhaps four times what were previously thought to be “trend” prices. Many are left wondering: (1) why are lumber prices so high? And (2) why haven’t timber prices, especially in the U.S. South, followed lumber prices up? In this research note we provide some comments on the former and take a deeper dive to answer the latter.
1 WSJ, 24 February 2021
2 Bloomberg, 20 April 2021
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