United States 

Department of 

Agriculture 

Forest Service 

Northeastern Forest 

Experiment Station 

Hardwood Lumber and 

Stumpage Prices 

in Two Eastern Hardwood 

Markets: he Real Story 

Neal P. Kingsley 

Paul S. DeBald 
Abstract 

Hardwood lumber and stumpage prices appear to have risen substantially 

between 1964 and 1985. However, deflating these prices shows that inflation 

wiped out these increases for most species in two hardwood lumber markets and 

in a stumpage market. Only red oak, ash, and black cherry lumber prices 

increased faster than the rate of inflation. Yellow-poplar, basswood, hard maple, 

and soft maple prices actually declined in real terms. 

The Authors 

NEAL P. KINGSLEY is Project Leader, project NE-4153, Management and 

Utilization alternatives for Nonindustrial Private Forests, located at the Northeastern Forest Experiment Station, Delaware, Ohio. He received B.S. and M.S. 

degrees in forestry from the University of New Hampshire in 1961 and 1963, 

respectively. He joined the Northeastern Forest Experiment Station in 1962. 

PAUL S. DEBALD is a forest economist in project NE-4153. He received a 

B.S. degree in forestry from the Pennsylvania State University in 1957 and an 

M.B.A. degree from Xavier University in 1980. After service in the US. Army, he 

joined the Lake States Forest Experiment Station in 1959 and transferred to the 

Northeastern Station in 1965. 

Manuscript received far publication 15 October 1986. 

Northeastern Forest Experiment Station 

370 Reed Road, Broomall, PA 19008 

June 1987 
Introduction 

To the casual observer, hardwood lumber and stumpage 

prices would seem to have increased significantly during 

the past two decades. Market prices for hardwoods have 

nearly tripled between 1964 and 1985. The increases in 

hardwood prices were, of course, part of an overall inflationary spiral that began in the early 70's and subsided 

only recently. 

However, hardwood prices did not increase consistently 

from one species to another, nor from one area to another. 

Because of declines in demand and changes in hardwood 

markets, the increases in the market price of many hardwood species failed to keep pace with the overall rate of 

inflation. Thus, the real or deflated prices for many species 

have actually dropped during the past two decades. 

In this paper, we will explore the price trends-market and 

real-for eight important eastern hardwood species in the 

Appalachian and Northern hardwood lumber markets. 

The Price Deflators 

A period of inflation is defined as a time of generally rising 

prices for commodities and the factors of production 

(Samuelson 1964); or, stated in monetary terms, a'period 

when the value of money is decreasing. Thus, more and 

more money is required to purchase the same goods. For 

example, in 1964, 1,000 board feet (Mbf), of #1 common 

414 Appalachian white oak sold for $1 10 f.0.b. the mill. In 

1985, the same lumber sold for $362 per Mbf, an increase 

of 229 percent. How much of this increase was due to an 

increase in demand or a decrease in the supply of white 

oak, and how much of this apparent change was due to the 

decrease in the value of money? 

To answer these questions economists use a price index. A 

price index compares the current price of a good or service 

with its price in a predetermined base year. The base year 

1967 is used commonly. Using a price index, we can 

deflate current reported prices in various years to comparable 1967 prices. Various price indices are suited to measuring various segments of the economy. The most familiar is 

the Consumer Price lndex or CPI. This measures the price 

of a hypothetical aggregation of typical consumer goods 

and services at any given time relative to the price of the 

same goods and services at a particular point in time. 

Thus, according to the CPI, $319 was needed in 1985 to 

purchase the same goods that $100 purchased in 1967. Or, 

31.9 cents in 1985 has the kame purchasing power as 

$1 .OO in 1967. 

Hardwood lumber has no utility in and of itself until it is 

used to produce a final product-a chair, a pallet, or part of 

a home. Hence, it is termed a producer good as opposed 

to a consumer good. By using a Producer Price lndex or 

PPI, we can get a more accurate measure of the relative 

price of hardwood because it does not include the costs of 

consumer goods and services. The most commonly used 

PPI is the "Producer Price lndex of All Commodities," 

formerly called the "Wholesale Price Index." This index 

includes nearly 3,400 commodities selected to represent 

the movement of prices of all commodities produced in the 

manufacturing, agriculture, forestry, fishing, mining, gas 

and electricity, and public utilities sectors of the economy. 

Producer Price Indices also can be developed for various 

commodities or stages of production. The appropriate index 

for our purposes is the "Hardwood Lumber Producer Price 

Index" or PPI-Hardwood. By using this index, we can look 

at the relative prices in transactions involving only the 

production of hardwood lumber. 

All three price indices, CPI, PPI, and PPI-Hardwood, are 

shown in Figure 1. Of the three, PPI-Hardwood shows the 

greatest change from quarter to quarter because it is 

restricted to a single commodity-hardwood lumber. The 

curve is not smoothed out by off-setting changes in prices 

of different commodities. For this reason, PPI-Hardwood 

most accurately reflects the relative prices of hardwood 

lumber. Because the PPI-Hardwood applies to the general 

price level of all hardwood lumber produced in the Nation, 

we can expect some variation from one region to another, 

from one species to another, and from one lumber grade to 

another. 

Hardwood Lumber Price Trends 

By applying the Hardwood Lumber Producer Price lndex to 

hardwood lumber prices, we can convert current prices to 

their relative 1967 price. These prices relative to 1967 are 

called "real" prices. The current prices used in this paper 

are those reported in "The Hardwood Market Report" for 

two hardwood lumber market areas: the Appalachian 

market centered in Johnson City, Tennessee, and the 

Northern market centered in Wausau, Wisconsin.' Prices 

reported are average market prices for carload quantities 

f.0.b. the mill. 

Our discussion is limited to eight major eastern hardwood 

species: black cherry, basswood, ash, red oak, white oak, 

soft maple, hard maple, and yellow-poplar. Black cherry, 

white oak, and yellow-poplar are not traded in sufficient 

quantities in the Northern market to provide reliable price 

quotations. Thus, regional price comparisons are not possible for these species. The remaining five species are 

traded in both markets. Graphs of the current and real 

lumber and stumpage prices of these eight species are in 

the Appendix. 

' Hardwood Market Report, P.O. Box 40042, 1418 

Madison Ave., Memphis, TN 38174-0042. 
CONSUMER PRICE INDEX 

(1967 = 100) 

400 I 

HARDWOOD PRICE INDEX 

(1967 = 100) 400 - 

353 - 

_ 

PRODUCER PRICE INDEX 

, 13 = 100 , 

Figure 1.-Three price indices-1967 = 100-1964-1985. 

Factors That Influence Hardwood Price Trends 

The price of any commodity is ultimately a function of 

supply and demand. For lumber, price is determined by the 

supply of lumber made available by sawmills, called millstocks, and the demand of hardwood lumber consumers for 

these millstocks. The overall demand for hardwood lumber, 

as measured by production, has been declining in recent 

years. Hardwood lumber production in the United States 

declined from 7.2 billion board feet in 1952 to 6.7 billion in 

1977 (USDA Forest Service 1982). The significance of this 

decline is amplified by the fact that the population in the 

United States rose from 157.6 million in 1952 to 216.9 

million in 1977 (USDA Forest Service 1982). Thus, on a 

per-capita basis domestic hardwood lumber production fell 

from 45.7 to 30.9 board feet. Most of this decline has been 

brought on by favorably priced substitutes for hardwoods in 

many products, primarily steel and plastics. Because the 

demand for hardwood lumber has not grown, the real price 

of hardwood lumber generally cannot grow. 

Table 1 shows the real and current prices of No. 1 common 

lumber at the opening and closing of the 21-year period. 

The table shows that the real price of No. 1 common white 

oak lumber was less than 1 percent below what it was in 

1964-in other words, it remained essentially unchanged. 

Real prices of many of the above species failed to keep 

pace with inflation. Some, in fact, fared quite poorly. Soft 

maple in the Northern market closed the 21-year period 

with a real price drop of 48 percent. Only three species 

were able to stay ahead of inflation. These were red oak in 

both markets, and ash and black cherry in the Appalachian 

market. 

Lumber prices generally followed economy-wide price 

trends during the period. From 1964 through 1973, inflation 

averaged 4.4 percent per year. During this period, current 

lumber prices remained steady or rose modestly. For the 

period 1973 to 1980 the rate of inflation averaged about 9.4 

percent and current lumber prices rose sharply. Lumber 

prices became erratic during this period as producers 

struggled to cover skyrocketing production costs and consumers resisted sharp price increases. Some species 

successfully resisted sharp increases in current price. This 

is more clearly evident for those species with a normally 

low demand, such as yellow-poplar and the maples. These 

are the "losers" and "big losers" in Table 1. By 1980, 

inflation had peaked at 14 percent and it seems that every 

species resisted the tendency to increase in price. lnflation 

began to moderate in 1981 and 1982. Generally, the higher 

valued species continued to increase in current price while 

the lower valued species tended to stay on or near the 

same plateau. By 1983, inflation had subsided to about 2 

percent, and current prices of many species began to show 

signs of declining. Although it may be too early to tell, this 

may indicate a return to moderation in current price trends 

in the hardwood lumber industry. 
Table 1.-Real and nominal prices of No. 1 Common 414 lumber per thousand board feet, f.0.b. the 

mill, for select species by price trenda in two regional markets, 1st quarter 1964 and 4th quarter 1985 

Real price Current price 

(1 967 dollars) (Current dollars) 

Species Marketb Price Price Price Price 

1964 1985 change change 1964 1985 change change 

Red Oak 

Ash 

Red oak 

Black Cherry 

White Oak 

Ash 

Basswood 

Hard Maple 

Soft Maple 

Yellow-poplar 

Basswood 

Hard Maple 

Soft Maple 

Dollars Percent 

WINNERS 

21 17 115 

13 10 124 

6 4 135 

3 1 180 

MODERATE LOSERS 

- 1 -1 110 

- 10 -6 150 

LOSERS 

- 47 -32 137 

- 60 -36 155 

- 64 -37 160 

BIG LOSERS 

- 59 -40 136 

- 58 -40 135 

- 72 -44 150 

- 81 -48 155 

Dollars Percent 

29 1 

264 

246 

238 

229 

21 3 

126 

114 

109 

98 

100 

87 

72 

aWinners-Real price remained the same or increased. 

Moderate Losers-Real prices declined less than 10 percent. 

Losers-Real prices declined 10 to 39 percent. 

Big Losers-Real prices declined 40 percent or more. 

bAH-Appalachian hardwood market, Johnson City, TN, and vicinity. 

NH-Northern hardwood market, Wausau, WI, and vicinity. 
This explains the overall trend in hardwood lumber, but 

what about the short-run ups and downs? Again the answer 

is supply and demand, but, in this case, short- run supply 

and demand. The hardwood lumber market is cyclical. This 

cycle depends both on the normal business cycle and on 

seasonal variation in production. Over 50 percent of all 

hardwood lumber goes into industrial uses.2 Therefore, 

hardwood lumber demand is strongly influenced by general 

industrial activity. As industrial activity improves, inventories at sawmills, called millstocks, are drawn down. As 

millstocks decrease, lumber price increases. This price 

increase stimulates production which builds millstocks until 

supply again exceeds demand and price beings to decline 

(Luppold 1986). This inherent cyclical tendency is accelerated by the large number of very small, part-time mills in 

the industry. As prices increase, these mills go into production to replenish millstocks rapidly. As prices drop, these 

mills go out of production. This tends to make the distance 

between peaks and valleys in production much steeper. 

Hardwood lumber prices are influenced by the business 

cycle. This is shown by comparing the short-run movement 

of prices with the overall economy. It is more evident when 

looking at real price changes than when looking at the 

movement of current prices. Inflation has the effect of 

masking the true movement of prices. 

Hardwood lumber prices are also influenced by seasonal 

production cycles. In many regions, winter weather forces a 

slowdown in logging activity. Also, many areas limit gross 

vehicle weight on secondary roads in the spring to reduce 

road damage. This means that logs cannot be hauled to 

the mill during these times. If millstocks are low going into 

these periods, prices can be expected to continue to rise 

because millstocks cannot be easily replenished. Conversely, during periods of good weather millstocks may 

increase in anticipation of poor weather to the point that 

prices may become depressed. 

We have discussed the reasons for long- and short-run 

price movements, but why did some species and grades do 

better than others during the past two decades? Hardwood 

lumber is used in a vast array of products from fine furniture to shipping pallets. Demand for quality uses such as 

furniture depends greatly,on consumer preference. Over 

the past two decades, oak furniture has been preferred. 

Maple furniture, on the other hand has lost favor with consumers. Black cherry has maintained favor, and, since 

supplies of furniture grade cherry are limited, prices have 

increased. In addition to being a preferred species for 

furniture in the US. market, exports of oak have increased 

significantly since 1972 (Luppold and Jacobsen 1985). 

Export demand for oak primarily effects the best grades 

called Firsts and Seconds (FAS). However, domestic 

demanders of FAS, to some degree, can shift demand to 

the next lower grade, No. 1 Common (IC) (Luppold and 

Jacobsen 1985). This has tended to increase the price of 

1C oak lumber. 

Other species have few outlets to speak of relative to their 

abundant supply. Consumption of soft maple and yellowpoplar lumber has declined while timber inventories of 

these species have increased. 

Lumber Prices and Stumpage Prices 

The stumpage prices quoted here are from "Ohio Timber 

Prices" published semiannually by the Ohio Crop Reporting Service of the USDA Statistical Reporting Service. Five 

other states in the northeast-Maine, Massachusetts, New 

York, Pennsylvania, and West Virginia-publish stumpage 

prices either semiannually or bimonthly. Two others, Kentucky and New Hampshire, publish annual price reports 

(Rosen 1984). Ohio prices were used here because they 

are believed to be generally representative of prices in the 

hardwood regiori and because they provide comparable 

information for the period 1964 through 1985. 

As a general rule, real stumpage prices in Ohio have fold 

lowed the same trends as real lumber prices in the Appalachian market area. Two exceptions are black cherry and 

soft maple. Despite the fact that real prices of black cherry 

lumber have increased in the Appalachian market, black 

cherry stumpage prices have declined in Ohio. The reason 

for this is that black cherry is not a commercially important 

species in Ohio (Dennis and Birch 1981). The black cherry 

sawtimber in Ohio is of too poor quality for furniture 

stock-76 percent is in Grade 3 or poorer sawlogs. Soft 

maple stumpage prices, while declining, have not declined 

as rapidly in Ohio as have soft maple lumber prices in the 

two market areas. An explanation for this may be Ohio's 

relatively large pallet industry, which can utilize soft maple 

along with many other species. Thus, a stronger demand 

for soft maple seems to exist in Ohio than in other states in 

the region. 

Stumpage prices are residual prices. They represent the 

difference between the selling price of lumber and the total 

operating costs and profits incurred in removing the timber 

and converting it into lumber (Zaremba 1963). The actual 

cost of growing the timber is, therefore, not reflected in the 

stumpage price. The would-be timber seller, of course, 

must be aware of what it costs to grow timber. For only by 

knowing these cosfs can the seller know what price will 

recover the cost of growing timber. 

Personal communication with W. G. Luppold, North- eastern Forest Experiment Station, Princeton, WV. 
Because stumpage prices are derived from lumber prices, 

lumber prices exert a push-pull effect on stumpage prices. 

Rising lumber prices tend to pull stumpage prices up and, 

conversely, falling lumber prices tend to depress stumpage 

prices (~aremba 1963). However, lumber and stumpage do 

not move together. Since'lumber prices must increase in 

order for stumpage prices to increase, there is a lag in the 

increase in stumpage prices. 

The short-run trends of real stumpage prices clearly show 

the effect of the oil crises of 1973 and the mid to late 

1970's. This reflects the fact that motor fuel is a significant 

cost item in modern logging. In order to cover this 

increased cost, loggers were forced to bid lower for stumpage. This situation did not correct itself until inflation began 

to moderate about 1980. 

The Potential Timber Seller and the Timber Market 

The owner of nonindustrial private forest land who is contemplating the sale of timber needs to understand both the 

hardwood lumber and stumpage markets in the selling 

area. Most particularly, one needs to be aware of how 

inflation can mask the real changes in lumber and stumpage prices. As we have seen, substantial increases in price 

can be more than cancelled out by inflation. By observing 

the actions of the lumber market, the seller can anticipate 

increasing or decreasing stumpage prices. By keeping an 

eye on the general business cycle, the potential timber 

seller can get afeel for trends in hardwood lumber and 

stumpage prices. Millstocks and weather patterns are also 

important barometers of short-run price trends. It is important for potential sellers to remember that increases in 

lumber prices often foretell a rise in stumpage prices. 

Keeping an eye on trends in the lumber or stumpage markets is easier said than done. Public reporting of lumber or 

stumpage prices on a regular basis is not available in most 

areas. For this reason it is in an owner's best interest to 

obtain the services of a forester to handle the timber sale. 

Most foresters are familiar with the timber market in their 

area and are in a position to predict upswings and thus 

recommend the best time for an owner to offer timber. 

As we have seen, the real lumber prices of most hardwood 

species have declined in the Appalachian and Northern 

market areas since 1964. So have real stumpage prices for 

most of these species in Ohio. We have also noted that 

stumpage prices do not reflect the actual costs of growing 

timber. In the face of long term declining real stumpage 

prices, it will often be difficult for the timber grower to 

justify expenses incurred in cultural treatments solely on 

the basis of future stumpage values. When considering 

treatments, the owner, therefore, should favor thinnings 

and other treatments that can pay for themselves in terms 

of saleable products or those treatments that improve the 

non-commodity values of his woodland. 

The potential timber seller should also keep in mind that 

large, top-quality logs will bring a substantially better price 

than smaller logs of lower quality. Figure 2 illustrates this 

fact. Notice that delivered prices of Grade 1 sawlogs over 

16 inches diameter at the small end, inside bark averaged 

28 to 65 percent above the average price of all logs delivered to Ohio mills in the September through November 

1985 reporting period. Conversely, prices of Grade 2 and 3 

logs ran as much as 60 percent below the average. Thus, 

the timber grower would do well to identify those potentially 

large high-value trees early and to favor their growth and 

development into money-making trees. Past performance 

indicates that black cherry, red oak, ash, and white oak 

would be the species to favor (Table 1). On the other hand, 

the maples and yellow-poplar should generally be discouraged. 

This study is based on past market performance of 

selected hardwood species in two lumber markets in the 

Eastern region of the United States. The reader should 

keep in mind that the situation may be significantly different in other regions and for other species. In addition, 

unforeseen developments, such as changing consumer 

preferences or improved utilization may significantly 

improve the marketability of presently low-value species. 

Thus, however unlikely it may seem at this point in time, it 

may not be safe to assume that "the past is prologue." 

Also this analysis covers a broad region and local situations may vary significantly from the broader regional picture. For this reason, potential timber sellers need to be 

aware of the local market situation as well as the larger 

regional picture. For instance, a strong market for yellowpoplar or other generally lower value species may exist 

locally while the market for ash is very poor. 
LOG GRADE 

-. " 

I CHRY ROAK WOAK ASH BASS YPOP SMAP HMAP 

C 

E SPECIES 

Figure 2.-Delivered log prices by species and log grade 

compared to average prices of all delivered logs by 

species, Ohio, September-November 1985. 

Literature Cited 

Dennis, Donald F.; Birch, Thomas W. 1981. Forest statistics in Ohio-1979. Resour. Bull. NE-68. Broomall, 

PA: U.S. Department of Agriculture, Forest Service, 

Northeastern Forest Experiment Station. 79 p. 

Duerr, William A. 1960. Fundamentals of forestry economics. New York, NY: McGraw-Hill: 579. p. 

Luppold, William G.; Jacobsen, Jennifer M. 1985. The 

determinants of hardwood lumber price. Res. Pap. 

NE-558. Broomall, PA: US. Department of Agriculture, 

Forest Service, Northeastern Forest Experiment Station, 

6 P. 

Rosen, B. N. 1984. Price reporting of forest products to 

nonindustrial private forest landowriers. Journal of 

Forestry. 82(4):491-495. 

Samuelson, Paul A. 1964. Economics. 6th Ed. New York, 

NY: McGraw-Hill: 838 p. 

USDA Forest Service. 1982. An analysis of the timber 

situation in the United States 1952-2030. For. 

Resour. Rep No. 23; Washington, D.C.; US. Department 

of Agriculture, Forest Service. 499 p. 

USDA Statistical Reporting Service, Ohio Agricultural Statistics. 1964-85; Ohio Timber Prices, Columbus, OH. 

Zaremba, Joseph. 1963. Economics of the American 

lumber industry. 1st ed., New York, NY: Robert Speller 

& Sons. 232 p. 
Appendix 

ASH -- NORTHERN 

$1 CVh.1MrJt.I LUMOEE PRICE; CURREtfl / REAL 

7%> 
BASSVVOOD -- NORTHERN 

$1 CVMMVN WMRW PRICE: CURREIq / RML 
BLACK CHEERY -- APPALACHIAN 

#1 CVMMVN LUhdRER PRICE; CURREIfl / REAL 

7cG 

HARD MAPLE -- APPALACHIAN 

$1 COMMON LUh43ER PRICE: CURRENT / REAL 

700 
HARD blAPLE -- NORTHERN 

Y 1 COh.1 tdOt\l LlJMBW PRICE; CIJRREFJT / REAL 

SOFT M,I?PLE -- NCJRTHEPN 

$1 CUMMrJN C!.,IhSER PRICE; CVRREM /' RE4.L 

7w 

5w - 

5w - 

f, 4w - 

: 

-I 

X 3<32 - 

2<c4 - 

lQ> - 

3 

,rx-... 

.--, 

--"\ /- 

>f 7. ,+."' 

f '..%.--/. 

I I I I I I I I i I 

64 68 72 76 8" .34 

'-(mF<z Q,JJd.FT~5 
ASH STUMPAGE PRICES: OHIO 

PP~CTUAC. / R€AL (1967 = 100) 1 .m 

0~111111111111111 IIIII 

HARD MAPLE STUMPAGE PRICES: OHIO 

RED CAE STUMPAGE PRICES: OH.10 

A!YlLN.L / REAL (1967 = 100) 

1.52 

, 

Kingsley, Neal P.; DeBald, Paul S. 1987. Hardwood lumber and stumpage prices in two eastern hardwood markets: The real story. 

NE-RP-601. Broomall, PA: U.S. Department of Agriculture, Forest Service, Northeastern Forest Experiment Station, 17 p. 

Current and real prices of hardwood lumber and stumpage prices are 

discussed. Results show that inflation wiped out most of the apparent price 

increases in two major hardwood lumber markets. Stumpage prices also 

failed to increase in real terms for most species in Ohio. Current and real 

prices trends for eight major eastern species are shown for the period 1964 

through 1985. 

Keywords: Hardwood, lumber, stumpage, prices, eastern markets, market 

price, real price. 

1 *U. 5. GOYFRMLNT PRINTING 0TTLCL:?PB7-748-076*40025 
Headquarters of the Northeastern Forest Experiment Station are in Broomall, Pa. 

Field laboratories are maintained at: 

Amherst, Massachusetts, in cooperation with the University of Massachusetts. 

8 Berea, Kentucky, in cooperation with Berea College. 

.Burlington, Vermont, in cooperation with the University of Vermont. 

Delaware, Ohio. 

@ Durham, New Hampshire, in cooperati~n with the University of New Hampshire. 

Hapden, Cgnnecticyt, in cooperation with Yale University. . . 

Morgantown, West Virginia, in cooperation with West Virginia University, 

Morgantown. 

Orono, Maine, in cogperation with the University of Maine, Orono. 

parsons, West Virginia. 

Prin~eton, West Virginia. 

Syracuse, New York, in cooperati~n with the State University of New York 

College ol Environmental Sciences and Forestiy at Syracuse University, 

Syracuse. 

Uniyerqity Park, Pennsylvania, in cocy>eration with the Pennsylvania State 

University. 

e Warren, fenn$ylvania, 

Persons of any rip, color, national origin, spx, age, religion, or with any handicapping condition are welcome to use and gnjoy all fat$lities, programs, and smites 

of the USDA. Discrimination in any f~rm isstridly qgaipst agency policy, and 

should be reported to Secretary of Agriculture, Washington, 19C 20250.