Lumber Prices Set to Rise

Pope Resources is a Washington State lumber and land company. Below is an excerpt from their most-recent report. “MBF” is the abbreviation for ” thousand board feet” and “MMBF”  signifies “million board feet”:

“For the first six months of 2011, our average realized log price increased $88 per MBF, or 18%, from $483 per MBF in 2010 to $571 per MBF in 2011. Within this total, Douglas-fir log prices increased $100 per MBF, or 19%, from $515 per MBF in 2010 to $615 per MBF in 2011 and whitewoods increased $93 per MBF, or 21%, from $453 per MBF in 2010 to $546 per MBF in 2011. Across all species, export log prices increased $110 per MBF, or 21%, from $517 per MBF in 2010 to $627 per MBF in 2011. In addition, while there was virtually no spread between export and domestic log market pricing in the first half of 2010, the spread has increased to 12%, or $69 per MBF, export lift in 2011’s first half.

“(Pope executed) a 30% increase in our harvest volume, from 14 MMBF in 2010 to 19 MMBF in 2011, amplified by a $65 per MBF, or 13%, lift in average realized log price, which increased from $517 per MBF in 2010 to $582 per MBF in 2011.

“For the first six months of 2011, Fee Timber operating income was nearly double the level of the corresponding period in 2010, increasing from $5.3 million in 2010 to $10.4 million in 2011. This improvement was driven by the combined effect of an 89% increase in harvest volumes, from 26 MMBF in 2010 to 49 MMBF in 2011, and an $88 per MBF, or 18%, improvement in average realized log price, which increased from $483 per MBF in 2010 to $571 per MBF in 2011. “

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