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What if the Proposed New Design Values for Southern Pine are Approved?
FEA Study sees marked impact on the supply, demand and prices for southern pine lumber, as well as on the value of standing timber.
By: Forest Economic Advisors (FEA)
Southern pines provide over half of the U.S. lumber supply. They owe their preeminence to outstanding strength and stiffness that make them the strongest of the major softwood species groups in North America. That status is now under question as the Southern Pine Inspection Bureau (SPIB) has submitted new design values for visually graded southern pine dimension lumber which, if approved, would reduce key design values of dimension lumber by 20% to 40%. Changes of this magnitude would push southern pine’s allowable design stresses from “first” to “worst” amongst the major softwood species.
If approved in their current form, the proposed design stress reductions will have a marked effect on the supply, demand and prices for visually graded southern pine framing lumber, the value of standing Southern Pine timber and a ripple effect on the supply, demand and prices of structural grades of MSR, engineered lumber and potentially on other North American softwood species.
In its report, FEA:
• Quantifies the size of the potential demand loss for visually graded southern pine in each of the major end-use markets including: roof and floor trusses, floor joists and roof rafters and beams and headers.
• Identifies alternatives designers will have including: sticking with visually graded southern pine in higher grades or larger sizes as well as product substitutions such as MSR lumber, I-joists, trusses, LVL, PSL or LSL.
• Forecasts the potential incremental demand for these visually graded southern pine substitutes in each of the end use markets.
One of the main findings of this report is that there will be a significant shift in demand from visually graded southern pine lumber to MSR/MEL southern pine lumber. The incremental demand for MSR in the South will be over 400 million board feet in 2012, almost three times the current 135 million board feet of MSR lumber produced in the south. This raises the question: will there be enough MSR supply in the south to meet this demand? To answer this question, FEA does a mill by mill accounting of available MSR/MEL capacity in the south.
FEA principal Paul Jannke said that he was excited to deliver, “the first and only detailed study that quantifies and forecasts the potential impact of the southern pine design stress changes”.
FEA Partner Art Schmon added that, “this study should be of interest to lumber manufacturers, component fabricators and distributors interested in what these design stress reductions will mean to specific markets – especially leading up to the January 5, 2012 ALSC meeting.”
Visit http://www.getfea.com for details
FEA performs cutting-edge economic analysis on lumber, wood panels, timber, biomass energy and macroeconomics. Founded in 2009 and based in Westford, MA, FEA brings a fresh perspective to the forest products industry, providing insight to help clients make effective business decisions. Please visit www.getfea.com for a comprehensive prospectus of FEA’s southern pine design stress white paper.
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FEA provides independent economic analysis and third-party forecasts for the forest products industry with a focus on lumber, wood panels, timber, biomass energy and macroeconomics sectors.