Does Over Supply Threaten The Future of the Timber Industry?
History shows that in previously oversupplied markets there have always been eventual changes in supply or demand that swing the balance back toward higher prices. With most analysts seeing housing construction slipping over the next year, most traders say the supply side will be the key to a turnaround. One such change is occurring in the Southern Pine region, where widespread curtailments and rain-induced log shortages have sung prices to the upside. But how long will lower output be maintained, and will other regions follow suit to protect pricing? It likely that oversupply will continue in the U.S. market for the foreseeable future. Strong production in the U.S. and Canada, combined with record imports and sharply lower exports, have resulted in record supply depressing prices in the U.S. Instead of reducing output in Canada, duties on the Canadian lumber shipments to the U.S. have prompted some large producers to increase production to lower unit costs and help withstand the duty°
