Timber market report November 2021 (FWN37 Autumn 2021)

In my last report earlier this year I commented on standing timber prices being at record levels, and the highest I had seen in the whole of my career. I can update that now by confirming that prices have once again achieved new heights over recent months. All sawmills have been working at maximum capacity, and aided by a generally good summer, working on harvesting sites has been unimpeded.

Latterly prices have stabilised as the bought ahead position of most of the major sawmills has improved, although they remain at what are still record levels compared with anything we have ever seen before.

We continue to see further new investment in Scottish processing which is welcome news for woodland owners across the country. Having only recently completed significant investment at their Aboyne sawmill James Jones have now turned their attention to Mosstodloch where they intend to build a brand-new sawmill on a green field site adjacent to the existing mill, as well as creating more log yard and processing / treatment space which will combine to give Jones a significant increase in demand for round timber within the next 5 years. Norbord also plan a production increase of 200k tonnes next year, and have further plans to take this to a million in the years ahead.

In addition, they will also look to improve the use of further sea transport of both raw material and finished product, as well as enhanced roundwood storage facilities.

Similar to the farming industry we have struggled with the fallout from Brexit – foreign forest machine operators have returned to their home countries. Lorry drivers have done the same, or swapped timber haulage for more lucrative general haulage work, although this has been worst in England and Wales than in Scotland where our dedicated timber hauliers have remained loyal to our ever- expanding industry.

On top of that the sky-high fuel prices are beginning to feed through into higher operating costs both in the forest and on the road, although the good news for forest owners is that this isn’t being passed on to growers at present as a result of the continued good demand.

It’s always difficult to predict the market ahead, but most sawmill customers have strong order books for the first half of next year already, and we are just approaching winter when many of our customers are looking to build stocks to counter any bad weather, so our hope is that whilst prices may have levelled off, they are not likely to fall significantly in the foreseeable future.

Graeme Ralph, Operations Director, North Scotland, Euroforest Ltd

This article has been published in the Autumn 2021 edition of the Farm Woodland News.  Download a copy to access all articles.  Subscribe to receive newly published editions via email by using the form here.