In the Northwest, sawlog prices peaked at $73 per ton in April, driven by strengthening domestic demand. As spring progress, logging conditions improved, and the log supply expanded, and log prices retreated to $68 per ton. Log customers in the region were able to end the quarter with healthy log decks.
As expected, export demand was lower than in the second quarter of last year and did not command a significant price premium to domestic markets. We directed the vast majority of our harvest volume to domestic customers, exporting 26,000 tons of sawlogs during the quarter. We expect good logging conditions to prevail during the third quarter, so despite modestly strengthening export demand, we expect Northern sawlog prices to return to first quarter levels of about $67 per ton.
In the Northeast and the Lake States, pulpwood enjoyed solid demand, and prices held at attractive levels. As a result, pulpwood prices averaged $42 per ton during the quarter. We expect stable pricing and seasonally higher pulpwood harvest during the third quarter.
Overall, we expect Northern harvest volume to seasonally recover, a level similar to the first quarter, about 700,000 tons of sawlogs and 450,000 tons of pulpwood.In the Southern Resources, Southern Resources' $22 million operating profit was $1 million higher than the first quarter's $21 million profit. Prices for both pulpwood and sawlogs were marginally higher compared to the first quarter, while our harvest volumes for both sawlogs and pulpwood increased. Our sawlog harvest increased 213,000 tons, but was about 100,000 tons less than we initially planned because sawlog pricing remained unattractive in some markets. Pulpwood markets continue to present an opportunity with attractive pricing in many Southern wood baskets. Our Southern quarter harvest was nearly 100,000 tons higher than in the first quarter. We had initially expected a pretty flat quarter-over-quarter pulpwood harvest. However, our pulpwood yields from first thinning harvest are running higher than our expectations, and that has pushed up our pulpwood harvest. Read the rest of this transcript for free on seekingalpha.com
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV