Real price appreciation forecast tool: Two delivered log market price cycles in the Puget Sound markets of western Washington, USA, from 1992 through 2019

Schlosser, William E.

doi:10.1016/j.forpol.2020.102114

Cited by 6 publications

(8 citation statements)

References 14 publications

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“…Log segments increase cubic meter measurements causing the log grade to shift into higher values per cubic meter. Log grade value follows price increases as these grades progress through increasing small end diameter sizes facilitating recovery of pulp log segments, then to 4-sawmill, 3-sawmill, 2-sawmill, and potentially to 1-sawmill or SM and better log grades (NLRAG 2011;Schlosser 2020). Log grade differences are met primarily through larger log small end diameter as log lengths remain fixed.…”

Section: Biologic Growth and Decaymentioning

confidence: 99%

“…Monthly delivered log market prices were established through April 2021 within this marketing area (Puget Sound Delivered Log Market) and were combined with consistent costs for reforestation, road building, timber harvesting, log-trucking, timber harvest overhead and administration, and general management costs. The Real Price Appreciation (RPA) Forecast Tool (Schlosser 2020) was applied to all sort-and-grade price projections for this market area.…”

Section: Timber Evaluated As a Commoditymentioning

confidence: 99%

“…Forestland investors consider the time-value of money with respect to their opportunity cost of alternative investments (Hubbard and O'Brien 2015). Forestland owners' monetary preferences steer resource value decay rates as it is discounted from the future to today's value (Schlosser 2014;2020).…”

Section: Introductionmentioning

confidence: 99%

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Growth and decay: forest landowner impatience factor

Schlosser

2023

J.For.Bus.Res.

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From saplings to mature stems, trees grow into new log-size classes expanding in both timber volume and monetary value. Forestland financial decay becomes discernible when timber revenues are discounted to their present-day value. Net present value (NPV) calculations require application of a financial discount rate moderated against the forestland’s macroeconomic inflation rate. The discount rate is significantly determined by the forestland owner’s ‘impatience factor’ uniquely guiding timber harvest rotation timing for each forestland investor. The importance of appropriately defining the impatience factor is discussed in this manuscript. A 15.78 hectare (39.0-acre) forested parcel value is considered, as viewed through the impatience factor lens for various investor classes to appreciate observed variability in discounted asset values and how it influences timber harvest rotation timing. Natural resource managers, investors, and advisors may find the techniques described here helpful in their timber management financial decisions.

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Section: Biologic Growth and Decaymentioning

confidence: 99%

Section: Timber Evaluated As a Commoditymentioning

confidence: 99%

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Growth and decay: forest landowner impatience factor

Schlosser

2023

J.For.Bus.Res.

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“…We can analyze not only from the indirect effects but also direct impacts from the perspective of market supply and demand. According to the Equilibrium Theory, in the absence of an external shock, the wood market tends to be in equilibrium under the dual effects of supply and demand [33,34]. In the event of an external shock, such as the occurrence of emergencies just like COVID-19, downstream manufacturers would adjust their decision-making behaviors based on the information they have and change consumption plans such as log purchases, so as to shift the demand curve and affect log prices.…”

Section: Hypothesis 2 (H2)mentioning

confidence: 99%

The Dynamic Impacts of the COVID-19 Pandemic on Log Prices in China: An Analysis Based on the TVP-VAR Model

Tao

Diao

Cheng

2021

Forests

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China’s wood industry is vulnerable to the COVID-19 pandemic since wood raw materials and sales of products are dependent on the international market. This study seeks to explore the speed of log price recovery under different control measures, and to perhaps find a better way to respond to the pandemic. With the daily data, we utilized the time-varying parameter autoregressive (TVP-VAR) model, which can incorporate structural changes in emergencies into the model through time-varying parameters, to estimate the dynamic impact of the pandemic on log prices at different time points. We found that the impact of the pandemic on oil prices and Renminbi exchange rate is synchronized with the severity of the pandemic, and the ascending in the exchange rate would lead to an increase in log prices, while oil prices would not. Moreover, the impulse response in June converged faster than in February 2020. Thus, partial quarantine is effective. However, the pandemic’s impact on log prices is not consistent with changes of the pandemic. After the pandemic eased in June 2020, the impact of the pandemic on log prices remained increasing. This means that the COVID-19 pandemic has long-term influences on the wood industry, and the work resumption was not smooth, thus the imbalance between supply and demand should be resolved as soon as possible. Therefore, it is necessary to promote the development of the domestic wood market and realize a “dual circulation” strategy as the pandemic becomes a “new normal”.

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“…Another important subject in this Special Issue was related to forest products markets. For instance, Schlosser (2020) developed a tool to forecast real price appreciation that timberland managers may find helpful during market disruption and recovery events. Chudy and Hagler (2020) found that in general non-coniferous and coniferous wood markets are not integrated due to a lack of perfect substitutability of roundwood products and significant transaction costs among trading regions.…”

Section: Contributions In the Special Issuementioning

confidence: 99%

Research trends: Forest investments as a financial asset class

Chudy

Cubbage

2020

Forest Policy and Economics

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This paper serves as an introduction to a Special Issue (SI) of the Journal of Forest Policy and Economics dedicated to forest investment and finance. The Special Issue stemmed from an International Forest Business Conference (IFBC2018) held in Poland on 6–8 June 2018. It includes papers based on speeches at that conference, as well as others on similar topics not presented at the conference. Topics addressed in this Special Issue include timberland investments, forest finance, intensively managed plantations, risk, uncertainty and decision-making, business structures and investment strategy, timber prices and forecasts, forestry contractors, and taxes. Details papers on these subjects follow in this Special Issue. Our finance research overview here provides a historical background and summary of forest investments and finance, focusing on forest equity investments made by institutional investors and in forestry real estate investment trusts, not including public lands or individual small private forest landowners. Forest assets as an investment class have expanded due to analytical advances, ownership changes, globalized markets, and sustainable forestry factors. Key components affecting forestry investments are expected asset returns, portfolio diversification, inflation hedge, and liquidity and natural risks. Topics detailed in this Special Issue include timberland investments, forest finance, intensively managed plantations, risk, uncertainty and decision-making, business structures and investment strategy, timber prices and forecasts, forestry contractors, and taxes. Finally, we identify knowledge gaps regarding forest investments for future research.

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Real price appreciation forecast tool: Two delivered log market price cycles in the Puget Sound markets of western Washington, USA, from 1992 through 2019

Cited by 6 publications

References 14 publications

Growth and decay: forest landowner impatience factor

Growth and decay: forest landowner impatience factor

The Dynamic Impacts of the COVID-19 Pandemic on Log Prices in China: An Analysis Based on the TVP-VAR Model

Research trends: Forest investments as a financial asset class

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