Overall, hardwood markets are up for all grades and species. This creates an improved market situation although labor shortages, availability of trucking and inflation have created challenges in 2021 for many loggers and mills. Statewide delivered log prices increased by approximately 29.5% for all grades and species. Demand has continued to outpace production for hardwood products. This has kept prices climbing and competition strong. Increased prices are tied to strong housing, remodel, and bourbon markets. The demand for white oak is specifically tied to the increasing bourbon market that outpaced production. Markets are anticipated to remain strong until production meets demand. This is difficult to determine with the fluctuation in US and world economies not to mention what is going on in Europe with the Russian war against Ukraine.

Delivered Log Summary
Ash volume continues to decline due to the emerald ash borer. Standing dead trees have been further degraded by ambrosia beetles. This will continue until all of Kentucky is impacted. Hickory is experiencing favorable markets across log qualities in 2021 with the largest increase associated with low quality logs. Maples experienced strong increases in prices across all log qualities. Red oak domestic and export demand is still weak, although pricing has improved. Strong railway tie log and hardwood flooring markets have provided much of the price improvement for red oak. Yellow-poplar demand has doubled its value  from 2020, with values close to red oak. High and medium quality yellow-poplar logs experienced record highs in 2021 with average value increases between 43.6-45.1% across all log qualities. We have heard reports from some lumber producers that poplar pricing has started to soften slightly and this is reflected in lumber pricing. White oak log prices continue to remain strong. This is due to the demand for the species across all qualities, with an especially strong continued demand for high quality stave logs  ssociated with elevated bourbon whiskey production. Demand and competition between stave, veneer, and grade lumber logs across the region resulted in historically high prices and reduced supplies of white oak in 2021 for many facilities. Chestnut oak, (which is not listed in the table) is also in high demand, driven by the demand for white oak. Black walnut prices paid for high quality logs are historically high resulting in continued sellers’ market for this species. Price increases were significant for medium quality 32%, and low quality walnut logs increasing 46.5%. Table 2 shows the delivered prices for factory lumber logs of various commercially important species across Kentucky from the end of 2020 and how those prices changed compared to the end of 2021.

Log Prices

   

Stave Logs

Competition for stave logs continues to grow, increasing the value of high and medium quality white oak logs as well. To meet this growing demand several new yards have been established to receive stave logs. Markets are averaging over $1.69/bdft (Figure 5) with logs ranging $1 to $2.50 per board foot. Unlike 2020 and the first half of 2021, where prices were flat throughout the year, stave logs experienced a 21% increase in the second half of 2021. The market for white oak logs is expected to remain strong in 2022. As mentioned previously, intense competition for high quality white oak logs reduced stave log inventories for many facilities, causing price increases. Statewide stave logs are averaging over $1.40/bdft (Figure 5). The market for white oak logs is expected to remain strong in 2022 indicating continued opportunities for landowners and loggers. 

Figure 6

   

  

 

   

   

 

 

   

   

   

Railroad Tie Logs

Railroad tie logs remain another important timber product in Kentucky. Hardwood railroad tie logs, that experienced a soft market and losses in value in 2019 and 2020, rallied in 2021 with a 26.5% increase in value from the end of 2020 to the end of 2021, and non-oak hardwood tie logs increasing 23.8% over the  same period (Figure 6). The statewide average for oak tie logs is $558/MBF, and for non-oak tie logs it is $442/MBF. While there is a strong overall upward trend in prices, there has been significant variation across the state and from month to month. Normal maintenance and replacement of railway ties are ongoing and demand and strong pricing is anticipated.

Figure 6