Southern yellow pine (SYP) lumber prices are at record highs. While this trend is benefitting southern sawmills, many timberland owners operating in the US South are asking the obvious question: Why are log prices in local markets not reflecting those of a surging lumber market?
The answer to this question is not as straightforward as it may seem. While log prices are to some degree tied to lumber prices, the association is a loose one. There are a number of mutual factors that affect both lumber and log prices, but each market also has independent drivers that do not overlap, which is why we see a disconnect in the markets.
What’s Driving Current Lumber Prices?
As noted above, southern yellow pine lumber prices have surged to record highs in 2018. Prices started out the year near $400/MBF and have since skyrocketed to nearly $550/MBF amid seasonal demand.