United States

Department of

Agriculture

0

@$I Forest Service

Southern Forest

Research Note

SO-368

Experiment Station May 1992

Midsouth Pulpwood Prices, 1989

John S. Vissage

SUMMARY

In 1989, the average delivered price for a cord of Midsouth roundwood was $49.92, an increase of less than 2

percent since 1988. The average delivered price for a

green ton of chipped residues increased about 3 percent

to $21.70. The total pulpwood expenditure for Midsouth

pulpmills increased about 6 percent to $1,658.5 million in

1989. In terms of 1980 dollars, real prices for all types of

pulpwood fell between 1980 and 1989. Real prices for

both hardwood roundwood and hardwood chips increased from 1988 to 1989.

Keywords: chipped residues, expenditure, roundwood.

Increased domestic use of pulp and paper products

and greater exports of these products caused increased

demand for Midsouth pulpwood in 1989. Increased mill

receipts and higher prices combined to increase

pulpwood expenditures 6 percent between 1988 and

1989.

The average price for a cord of Midsouth roundwood

increased by less than 2 percent from 1988 to 1989

(table 1). The average price for softwood roundwood

decreased slightly, while the average price for hardwood

increased over 6 percent. The average price of softwood

increased over 18 percent from 1980 to 1989, while the

average hardwood price increased 26 percent. Softwood

prices decreased after peaking in 1984, and hardwood

prices continued to rise after 1980.

The average price for a ton of chipped residues increased over 3 percent from 1980 to 1989 (table 2). The

price for softwood increased less than 1 percent, while

the price for hardwood increased over 9 percent. The

average price for a ton of chipped softwood residues increased about 5 percent from 1980 to 1989. The

average price for a ton of hardwood residues increased

31 percent during the same period. The average price

for softwood chips remained fairly stable from 1985 to

1989, while hardwood chip prices were more volatile.

Pulpwood prices generally increased after 1988

(tables 1 and 2). However, if inflation is taken into account, real average prices for softwood decreased while

Table 1 .- Trends in average prices per cord for Midsouth roundwood

Year

All

species Softwood Hardwood

1980 41.23

1981 46.25

1982 48.12

1983 48.38

1984 50.55

1985 50.12

1986 47.20

1987 47.47

1988 49.21

1989 49.92

--Do jars __________________

43.31

50.44

52.89

53.03

55.26

54.44

50.50

51.00

51.27

51.26

36.69

39.48

39.79

40.09

41.10

41.68

41.31

41.71

43.62

46.40

Southern Forest Experiment StationR-102lO U.S. Postal Services Bldg., 701 Loyola Avenue, New Orleans, La. 70113

Forest Service, U.S. Department of Agriculture.

Serving Alabama, Arkansas, Louisiana, Mississippi, E. Oklahoma, Tennessee, E. Texas, Puerto Rico, U.S. Virgin Islands

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real average prices for hardwood increased (table 3).

Real prices for softwood chips and roundwood

decreased 3 and 4 percent, respectively, from 1988 to

1989, while real prices for hardwood chips and

roundwood increased nearly 25 and 2 percent, respectively. None of the categories of pulpwood had a real

price as high as the corresponding price in 1980.

The average price of truck-delivered softwood

roundwood decreased almost 2 percent after 1988,

while the average price of truck-delivered softwood chips

remained virtually unchanged (table 4). Prices for truck

delivery of hardwood roundwood and chips increased 6

and 11 percent, respectively, after 1988. The average

price of rail-delivered softwood roundwood increased

about 4 percent after 1988, while the average price of

softwood chips increased about 2 percent (table 5). The

average price of rail-delivered hardwood roundwood increased about 14 percent, and the average price for

hardwood chips increased 10 percent.

Greater consumption and higher prices increased the

1989 pulpwood expenditure to $1,658.5 million, about 6

percent higher than in 1988. Softwood receipts accounted for about 68 percent of the expenditure. Expenditures for roundwood accounted for 68 percent of the

total. Chipped residues accounted for 32 percent of the

expenditure.

Reported prices were based on an annual canvass of

prices paid for pulpwood by Midsouth pulpmills. The 34

mills that responded to the 1989 canvass accounted for

53 percent of the expenditure. All reported prices were

for delivery to a pulpmill, mechanized yard, or railsiding.

Freight, woodyard overhead, and similar expenses were

not included. Expenses such as stumpage and shipment

from the logging site to the mill or yard were included. All

reported prices were for standard units-cords for

roundwood and green tons for wood residues. When

necessary, prices for nonstandard units were converted

to prices for standard units using regional conversion

factors.

Table 2.- Trends in average prices per green ton for Midsouth

chipped residues

Year

All

species Softwood Hardwood

______________ -~~----.--~--Do,,ars _____. -_.--_- ________________

1980 19.75 21.08 15.69

1981 24.31 26.12 1991

1982 25.72 27.95 20.78

1983 23.34 24.47 18.76

1984 25.44 26.61 22.31

1985 21.97 22.88 19.31

1986 21.77 22.98 19.23

1987 21.64 22.29 20.06

1988 20.99 21.84 18.56

1989 21.70 22.05 20.58

Table 3.- Trends in real prices per cord for Midsouth roundwood and

chipped residues

Softwood Hardwood

Year Roundwood Chips Roundwood Chips

_________....._______________ 1980 Dollars l ______________....___________

1980 43.31 48.48 36.69 36.09

1981 45.99 54.76 35.99 41.75

1982 45.33 55.09 34.10 40.96

1983 43.74 46.41 33.07 35.58

1984 43.97 48.69 32.70 40.83

1985 42.07 40.66 32.21 34.32

1986 38.03 39.81 31.11 33.30

1987 37.23 37.42 30.45 33.67

1988 36.22 35.49 30.82 25.78

1989 34.78 34.41 31.48 32.11

*Real prices based on “Implicit Price Deflators for Gross National

Product 1929-1990.” In: U.S. President. 1991. The Economic Report

of the President to the Congress. Washington, DC: U.S. Government

Printing Office. 411 p,

John S. Vissage is a forester, Forest Inventory and Analysis, U.S. Department of Agriculture, Forest Service, Southern Forest Experiment

Station, Starkville, MS 39759.

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Table 4.- Average prices of truck-delivered roundwood and chipped

residues

Year

Softwood Hardwood

Roundwood’ Chips+ Roundwood* Chips+

_____

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

45.36

52.12

54.33

54.35

57.10

56.64

51.66

52.26

52.52

51.67

___----____ -Do//ars______---....__________ . .._______

21.75 38.81 15.80

26.21 40.38 20.08

28.38 40.10 20.77

25.55 41.02 17.15

28.01 43.24 20.79

23.18 44.07 19.54

26.65 40.30 19.19

22.63 43.09 19.78

22.68 43.88 18.49

22.81 46.43 20.49

‘Price per cord.

+Price pergreenton.

Table 5.- Average prices of rail-delivered roundwood and chipped

residues

Year

Softwood Hardwood

Roundwood Chips+ Roundwood* Chips+

___-_

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

41.95 19.70

48.27 26.05

50.19 27.43

50.85 23.38

52.31 24.12

51.57 22.33

47.42 20.96

48.37 21.38

48.06 19.41

49.82 19.82

._._ Do/&s_____. . .._______________________

35.12 15.06

37.52 19.62

38.78 20.80

38.20 21.03

37.67 25.85

38.35 18.74

44.39 19.41

40.03 20.98

39.95 21.00

45.74 23.05

*Price per cord.

+Price pergreenton.

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