Wednesday, November 17, 2010

Bleak predictions highlight timberland conference

The 8th IQPC Timberland Investment World Summit was marked by pessimistic forecasts for the future of forest products and timberland prices. "The most optimistic sense of the future came from Remsoft, a software-development company in New Brunswick that works with natural resource industries, particularly timber," Curtis Seltzer reports for LandThink. "Their take on the next 10 years was that things would 'revert to the trend,' which is price appreciation in products, broadly speaking."

Peter Barynin, principal timber economist at RISI, the global timber information company, was less optimistic, describing he outlook for forest-product demand as "anemic," with price gains "difficult." Barynin "believes that the U.S. is 'emerging as the timber basket to the world,'" Seltzer writes. "The very fact of unused milling capacity and excess timber supply in this country should, however, keep timber prices flat for the next couple of years." Joel Shapiro, head of Atlanta-based Timbervest, LLC, which manages about 825,000 acres in the U.S., had an even bleaker view, predicting timberland prices coming down with "some [bare] dirt values dropping in half over the last few months."

The market for U.S. forest products is high-risk because of "'unprecedented' developments in the U.S. housing cycle, questions about stability in both the U.S. and Europe, currency questions and whether Russia’s vast supply of stumpage will start filling a significant space in global demand," Barynin said. Seltzer notes, "I’m not sure timberland sellers will do better tomorrow than they can do today. And if the glut of foreclosed homes keeps growing and depressing starts, they may do even worse." (Read more)

No comments: