Sales Report Page

January 2006 – Electronic Timber Marketing Report

Beacon Chalk Up 10 Years Of Electronic Timber Sales

It came as a bit of a surprise to us at Beacon Forestry when we realised that it was 10 years since we launched our electronic timber sales system and held the very first on-line timber auction in the UK.

During the past 10 years we have been responsible for 70 live electronic auctions and 68 on line tender sales offering a total of 2.25 million m3 of timber from state and private woodlands onto the open market; this is something we are proud of. Achieving sales for 1.9 million m3 of it (worth just over £26 million) has given us a success rate of 84%. This performance indicator shows there is still room for improvement but given the serious decline in timber prices towards the end of the 90’s, and the subsequent market upheaval that this caused, we are inclined to think we can just about be satisfied with our overall performance.

Our biggest disappointment has been the loss of the Forestry Commission as a client, caused by their decision to buy and operate an in-house electronic sales system. This leaves us servicing the private sector alone and whilst throughput volumes have inevitably reduced we are delighted to have maintained our monthly schedule of sales.

Our thanks and gratitude go out to all the growers, managers and organisations who have used and supported us during the past ten years.

We are optimistic about the future. The increase in timber production over the next 10 years will come from the private sector and there are encouraging developments for UK round timber prices. We are looking forward to the next ten years and we hope to hear from growers, managers and advisors in the private sector when they are considering their marketing options. It is so important to make the right decision on the marketing method because there is usually only one shot at it per rotation.

The encouraging thing is that the marketplace continues to show strong demand for most species and grades. As previously reported, the cost of imported timber is edging upwards due to strong global demand and higher energy costs. Coupled with the UK industry’s current concern about future UK wood fibre supplies (triggered by the potential demand from the wood-energy industry and the Forscot proposal) there is sound reason to expect that healthy competition amongst buyers will continue.

We believe that the best way to capitalize on this is a matter of common sense - sell timber competitively, on the open market, and make it available to as many potential buyers as possible.

Results from Recent Electronic Sales

3200 Tonnes SS Clearfell 0.49m3/tree = £18.25/tonne (S. Scotland)

1567m3 JL Clearfell 1.2m3/tree = £12.28/m3 (Marches)

3300 Tonnes SP/JL Clearfell .28m3/tree = £c.6.00/Tonne (Scotland)

957 H.ft Beech logs at roadside = £1.05/H.ft:£29.25/m3 (SW England)

845 H.ft Sw. Ch. Logs at roadside = £1.18/Hft:£32.85/m3 (SW England)

1600 Tonnes SS Clearfell 0.24m3/tree = £10.65/tonne (S. Scotland)

2721 Hft Oak logs (mostly fencing/beam) £ £3.45/Hft:£96/m3 (S. England)

1604 Hft Oak logs (mostly fencing/beam) £3.30/Hft:£92/m3 (S. England)

800 Tonnes MC Thinning/Windblow, 0.24m3/tree = £7.00/tonne (Midlands)

1400 Tonnes JL Clearfell, 0.91m3/tree = £12/tonne (Midlands)

7000 Tonnes SS Clearfell, 0.22m3/tree = 7.25/tonne (West Scotland)

8000 Tonnes SS Clearfell, 0.25m3/tree = £14.90/tonne (S. Scotland)

735 H.ft Oak logs, mixed grades, roadside £2.07/H.ft (S. England)

1000 Tonnes SS/SP Clearfell/windblow, 0.77m3/tree = £15/tonne (N. Scotland)

5200 Tonnes SS Clearfell, 0.42m3/tree = £16/tonne (S. Scotland)

7178 H.ft Oak logs, mostly planking, roadside = £3.58/H.ft:£100/m3 (S. England)

To enter a parcel into one of Beacon Forestry`s monthly sales and to receive free marketing advice contact Mike Bentley on 01721 724788 or email mb@beaconforestry.co.uk

Beacon`s no sale-no fee commission is just 1.5% for FTA members.

November 2005 – Sales Report

More Competition and Higher Prices to Continue?

 Since our last report Beacon Forestry’s monthly electronic sales have produced some encouraging results including £18.25/tonne for a privately owned parcel of standing SS in the Scottish Borders.

 From this, and other timber price data, it is clear that the previously reported increase in demand for round timber supplies and the subsequent increase in competition from those trying to secure it have led to better prices being paid, especially where parcels have been offered on the open market.

 The reasons for improved market conditions prevailing throughout most of the UK during 2005 are well known and have been summarized in previous market reports. Will it carry on though? – this is the question on the lips of many growers.

 There have been some recent reports from home grown softwood sawmills that intake may drop back a little during the winter and that the improved prices are therefore under threat. We take the view that a seasonal slow down during the winter before an upturn in spring is quite normal and these reports shouldn’t therefore cause anxiety among growers.

Imported timber is not getting any cheaper due to strong global demand and high fuel costs, and it is unlikely to get any cheaper if forecasts for the price of oil are anything to go by. For Swedish, Russian and Baltic timber producers the UK currently represents a relatively low unit-value market compared with price levels they are able to command at home and elsewhere in the world, again suggesting that future imported prices are unlikely to drop and may creep even higher if strong global demand continues. This is good news for the UK grower because it is, as processors are usually very keen to point out, the price of imported timber that largely dictates the amount that can be paid for home grown timber. Exchange rates have the potential to upset this (for good and for bad) but there are no reports or forecasts that we are aware of that suggest a significant shift in the currency levels of our major importing countries.

Future domestic demand in the UK looks encouraging too – there are reports of a slowing down of the total number of house starts but in terms of timber consumption this must be more than swallowed by the ongoing growth in the use of timber frame houses and the general renaissance that timber is enjoying among specifiers, architects and end users. The Government’s policy on new, affordable, low energy housing favours even more timber frame construction and no-one can be in much doubt about the potential offered by the huge construction programme for the London Olympics.

Forecasting demand for timber at the other end of the quality spectrum is now greatly affected by the burning issue (sorry!) of wood for heating and power generation. The domestic and world-wide interest in alternatives to burning fossil fuels for energy looks like it can only favour timber producers, but when in the UK?  Growers can be forgiven for becoming frustrated whilst waiting for a proper UK wide market for low value timber and harvesting residues to emerge from all the talk and statistics. The prognosis does look good though.

 Taking all of the above into account we think the prospects for current timber price levels are good and that it is no surprise to hear some processors trying to talk the market down whenever a window of opportunity presents itself. There are bound to be a few blips but in the absence of any significant shifts in currency exchange rates, the general trend should continue steadily upwards.

Results from Recent Electronic Sales

3200 Tonnes SS Clearfell 0.49m3/tree = £18.25/tonne (S. Scotland)

1567m3 JL Clearfell 1.2m3/tree = £12.28/m3 (Marches)

957 H.ft Beech logs at roadside = £1.05/H.ft:£29.25/m3 (SW England)

845 H.ft Sw. Ch. Logs at roadside = £1.18/Hft:£32.85/m3 (SW England)

1600 Tonnes SS Clearfell 0.24m3/tree = £10.65/tonne (S. Scotland)

2721 Hft Oak logs (mostly fencing/beam) £ £3.45/Hft:£96/m3 (S. England)

1604 Hft Oak logs (mostly fencing/beam) £3.30/Hft:£92/m3 (S. England)

800 Tonnes MC Thinning/Windblow, 0.24m3/tree = £7.00/tonne (Midlands)

1400 Tonnes JL Clearfell, 0.91m3/tree = £12/tonne (Midlands)

7000 Tonnes SS Clearfell, 0.22m3/tree = 7.25/tonne (West Scotland)

8000 Tonnes SS Clearfell, 0.25m3/tree = £14.90/tonne (S. Scotland)

735 H.ft Oak logs, mixed grades, roadside £2.07/H.ft (S. England)

1000 Tonnes SS/SP Clearfell/windblow, 0.77m3/tree = £15/tonne (N. Scotland)

5200 Tonnes SS Clearfell, 0.42m3/tree = £16/tonne (S. Scotland)

7178 H.ft Oak logs, mostly planking, roadside = £3.58/H.ft:£100/m3 (S. England)

To enter a parcel into one of Beacon Forestry`s monthly sales and to receive free marketing advice contact Mike Bentley on 01721 724788 or email mb@beaconforestry.co.uk

Beacon`s no sale-no fee commission is just 1.5% for FTA members.

May 2005

Electronic Timber Marketing Report

Supply and demand balance beginning to favour growers

The previously reported situation regarding increased demand and stronger competition for homegrown timber sales continues to develop. Private sector growers can benefit from this.

As usual it is the combined effect of a number of factors causing these price movements, resulting, at last, in better prospects for homegrown timber parcels being offered competitively.

Sawn prices in general continue to creep up in line with imported values and for some grades a shortage of imported material is causing buyers to turn their attention back to domestic supplies, thus adding new demand and allowing further price improvements.

Small round-wood and sawmill residue values, so often the reason for depressed standing sale prices, are also beginning to improve. The export market for small round-wood to Scandinavia continues and there are signs that we will see volumes increasing in the short to medium term. The energy market is also starting to take up some of the hitherto spare capacity and further projects close to becoming operational are all creating a level of demand that very few were forecasting a year or two ago.

Add to this a domestic supply imbalance caused by a significant shortfall from FE Wales and continued exports from the West of Scotland to Ireland and you soon begin to understand why the ripples are being felt throughout most of the UK as processors from home and abroad jostle for position and make moves to secure their future raw material supplies – something they simply must have.

It really is up to the private sector to now make a move of it’s own to secure the benefit of the current increase in demand. By offering timber on the competitive open market a grower can find the current value without committing to a sale if the price is still not suitable.

Where now the siren calls of three to four years ago warning about the wall-of-wood about to flood an uninterested market place with virtually no outlets unless you fell in line and committed all your timber volume to a buyer/seller cooperative at a price with no minimum limit?

Those who realised that absolutes rarely happen in forestry, and seldom last when they do, took a more balanced view and left themselves able to sell into the open market when things improved. We think it is now the right time for growers in the private sector to consider trying the competitive market option. Many growers who have sold by electronic auction and tender in recent months are glad they did.

Results from Recent Electronic Sales

Private Sector

7000 Tonnes SS Clearfell, 0.22m3/tree = 7.25/tonne (West Scotland)

8000 Tonnes SS Clearfell, 0.25m3/tree = £14.90/tonne (S.Scotland)

735 H.ft Oak logs, mixed grades, roadside £2.07/H.ft ( S.England)

1000 Tonnes SS/SP Clearfell/windblow, 0.77m3/tree = £15/tonne (N.Scotland)

5200 Tonnes SS clearfell, 0.42m3/tree = £16/tonne (S.Scotland)

7178 H.ft Oak logs, mostly planking, roadside = £3.58/H.ft:£100/m3 (S.England)

1831 H.ft Elm Logs, low grade, roadside = £1.97/H.ft:£55/m3 (S.England)

200T larch sawlogs 30cm td, at roadside = £38.50/tonne (S.E. England)

FE Scotland (Beacon Electronic Tender)

Standing thinning s 4 lots = range approx£10.00-£2.00/tonne

Standing clear fells 12 lots = range approx £17.00-£4.00/tonne

Green 16cm td saw logs = range approx £33.00-£25.00/m3ub

Red saw logs = range approx £29.00-£22.00/m3ub

Red pallet logs 14cm = range approx £20.00-£15.00/tonne

To enter a parcel into one of Beacon Forestry`s monthly sales and to receive free marketing advice contact Mike Bentley on 01721 724788 or email mb@beaconforestry.co.uk

March 2005
Electronic Timber Marketing Report

The increase in demand and steady price improvement for UK round timber has continued. The message that growers and harvesting businesses need a slice of the improved returns for processed wood products is now largely acknowledged and accepted by the processing industry. Growers from the private sector must keep pressure on the buyers by selling competitively if this is to continue.

The question on most growers minds at present is whether or not the recent storm damage to forests in the UK and southern Sweden will now have a detrimental affect on timber prices. People are understandably concerned that recent price improvements will be lost if a flood of windblown timber is dumped on the market.

We are very pleased to report that the situation is not likely to be anywhere near as bad as some initial reports suggested.

The overall UK situation is unlikely to have any long term affect. Timber from FC land will largely be absorbed within marketing plans without the need to put extra volume on the market, some sale locations may change on a local scale as a result of coupe substitution but quantities offered to the market place will remain much as planned. In the short term the damage to FC crops may even cause local shortages of timber coming on to the market as windblown areas are withdrawn from scheduled sales for assessment, re-mapping and re-valuation. This obviously opens up an opportunity for the private sector if they are quick and can put the right timber on the market.

In Sweden far more damage was done with estimates of around 1 years harvest (about 80 million m3) being flattened. The immediate concern for UK growers has been focused on the export pulp market to Scandinavia – will it dry up? Despite about 80% of the damaged timber being Norway Spruce the resoundingly good news is that UK spruce export markets have not been significantly affected and that ships are leaving UK ports just as before. The main UK exporter reports that the current supply commitment to 2010 stands and sees no reason to believe this will change.

Strangely, the Swedish situation could even have a longer term benefit to UK growers. Once the current windblow is salvaged - and an awful lot of it will never make it on to a timber lorry due to harvesting resources, snap, split, insect infection, staining and markets – there could even be a shortage of timber being harvested from southern Sweden as foresters try to re-adjust their sustainable yields. This could strengthen the UK export role as Scandinavian processors try to secure guaranteed supplies.

Results from Recent Electronic Sales

Private Sector

5200 Tonnes SS clearfell, 0.42m3/tree = £16/tonne (S.Scotland)

7178 H.ft Oak logs, mostly planking, roadside = £3.58/H.ft:£100/m3 (S.England)

1831 H.ft Elm Logs, low grade, roadside = £1.97/H.ft:£55/m3 (S.England)

200T larch sawlogs 30cm td, at roadside = £38.50/tonne (S.E. England)

200T larch sawlogs 18cm td, at roadside = £28.50/tonne (S.E. England)

1292 m3 DF/JL/NS thinning 1.08m3/tree = £11/m3 (S. England)

FE Scotland (Beacon Electronic Tender)

Standing thinning s 4 lots = range approx£10.00-£2.00/tonne

Standing clear fells 12 lots = range approx £17.00-£4.00/tonne

Green 16cm td saw logs = range approx £33.00-£25.00/m3ub

Red  saw logs = range approx £29.00-£22.00/m3ub

Red pallet logs 14cm = range approx £20.00-£15.00/tonne

FE Wales Auction

5841 t. MS thin .21/tree = £7.00/t

660 t. MC thin 1.83/tree = £5.00/t

2607 t. NS thin .19/tree = £14.50/t

1176 t. MC thin .37/tree = £6.70/t

2179 t. MC thin .16/tree = £3.25/t

4118 t. Mc thin .20/tree = £2.60/t

8675 t. MC thin .14/tree = £4.75/t

3311 t. MC thin .18/tree = £6.00/t

Green saw logs = £29.00- £27.00/m3ub

Bars = £22.50 - £20.50/m3ub

To enter a parcel into one of Beacon Forestry`s monthly sales and to receive free marketing advice contact Mike Bentley on 01721 724788 or email mb@beaconforestry.co.uk

October 2004
Electronic Timber Market Report

How many times do you hear that the price of imported timber dictates the market value of home grown timber? - and how many times do you hear that rising oil/haulage costs are partly responsible for keeping home grown timber prices in check?

Why do we only accept these seemingly plausible statements as explanations for very low domestic prices, why don’t we also look to them from time to time to generate price increases? There is much debate at present attempting to explain why home grown prices are not rising faster, and by more, than they actually are?

Exchange rates are generally moving the pound to a weaker position against the main importing currencies and as a consequence the price of sawn timber hitting the UK market from abroad is going up- and therefore domestic sawn prices are going up too.

Rising world fuel prices do not just affect UK industry and haulage companies. Timber coming into the UK still needs cutting down in the country of origin, transporting from forest to sawmill, transporting from sawmill to port, shipping from foreign port to UK port, and then transporting to distributors and end users! Imported timber must therefore use more diesel to get it from the forest to the UK market place than home grown timber does and a rising fuel price must increase an importer’s costs more per cubic metre than it does ours. This means we are able to make further in-line price increases for our sawn timber, and make more profit!

So why are UK growers not seeing a round timber price uplift commensurate with that of  UK sawn timber prices – are we only to believe the often heard imported timber price argument and rising fuel cost excuse when we need comforting over record-low domestic round timber prices?

Could it be that the domestic round timber market has become so overburdened with poorly negotiated long and medium term supply contracts that it is now too sluggish and fat to react to better times?. If so it could mean we are now starting to pay the real price for that late 90’s knee-jerk marketing strategy – some always wondered why timber buyers were so keen on it!

Prices are improving but you are only likely to maximize your share of the cake if you sell your timber competitively.

Results from recent Beacon Auctions

Private Sector

7178 H.ft Oak logs, mostly planking, roadside = £3.58/H.ft:£100/m3 (S.England)

1831 H.ft Elm Logs, low grade, roadside = £1.97/H.ft:£55/m3 (S.England)

200T larch sawlogs 30cm td, at roadside = £38.50/tonne (S.E. England)

200T larch sawlogs 18cm td, at roadside = £28.50/tonne (S.E. England)

1292 m3 DF/JL/NS thinning 1.08m3/tree = £11/m3 (S. England)

2160 T  MC 1^st thinning 0.1m3/tree = negotiated sale around £1/tonne (Scotland)

FE Scotland (Beacon Electronic Tender)

Standing thinning s 4 lots = range approx£10.00-£2.00/tonne

Standing clear fells 12 lots = range approx £17.00-£4.00/tonne

Green 16cm td saw logs = range approx £33.00-£25.00/m3ub

Red  saw logs = range approx £29.00-£22.00/m3ub

Red pallet logs 14cm = range approx £20.00-£15.00/tonne

FE Wales Auction

5841 t. MS thin .21/tree = £7.00/t

660 t. MC thin 1.83/tree = £5.00/t

2607 t. NS thin .19/tree = £14.50/t

1176 t. MC thin .37/tree = £6.70/t

2179 t. MC thin .16/tree = £3.25/t

4118 t. Mc thin .20/tree = £2.60/t

8675 t. MC thin .14/tree = £4.75/t

3311 t. MC thin .18/tree = £6.00/t

Green saw logs = £29.00- £27.00/m3ub

Bars = £22.50 - £20.50/m3ub

To enter a parcel into one of Beacon Forestry`s monthly sales and to receive free marketing advice contact Mike Bentley on 01721 724788 or email mb@beaconforestry.co.uk

May 2004

Electronic Timber Marketing Report

 General

Strong demand for sawn softwood timber continues and the pound continues to weaken against the currencies of our major timber importing countries. The strong demand for softwood remains focussed on construction and fencing grades. The weakening pound is also affecting imported supplies of hardwoods allowing home grown prices some much needed breathing space.

 The increased demand and better exchange rates have led to home grown round timber price increases. For the first time in 8 years Beacon Forestry’s average price per m3 obs rose during 2003. This is 7.7% up on the 2002 average price and should provide growers and independent managers some much needed encouragement. Beacon were the first to report actual  price  increases in the last edition of FTA News reflecting the immediacy of competitive open market sales – medium and long term contract timber prices rarely reflect the going rate and in a rising market particularly, the seller often loses out.

 Poor quality, low volume, small diameter stands containing less popular species such as larch, fir and hemlock remain difficult to shift at a realistic price to the grower. Poor quality pine also finds few buyers in some parts of the UK due to long distances to limited markets.

 As evidenced by the standing sale prices achieved so far this year by Beacon Forestry’s electronic auctions (listed below), strong demand exists for virtually all spruce crops; better than average stands of other conifer species and most hardwoods. The key to unlocking the current level of demand so that woodland incomes improve is competition. Better prices will rarely be achieved by relying entirely on negotiated sales and long-term agreements. There are some circumstances where off-market sales can benefit the grower but there is, in our view, an overriding commercial argument for maintaining a significant level of competitive, open market activity.

Outlook

 There is no sign that demand will decrease. If anything it could increase if weather conditions and poor organisation continue to hamper log supplies in Russia and the Baltics. Many Scandinavian producers are now turning their sights on the hungry and more lucrative markets in China and the USA, which must create opportunities for increased domestic supplies. Slightly longer term prospects for increased domestic competition also looks good; a number of major wood fuel projects are progressing towards the time when they will start buying small round wood and sawmill co-products. Coupled with the emerging export markets for small round wood there might just be a much welcomed, albeit small, lift in demand for small round wood on the distant horizon.

Hardwoods are also in greater demand, we have a number of buyers who are very keen to hear of any upcoming parcels, many are prepared to travel and buy from new areas.

Results from recent Beacon Auctions

 Private Sector

6200 tonnes SS clearfell .44m3 - £14.35/tonne (Wales)

13800t SS clearfell .21m3/tree = £10/tonne (South Scotland)

17500t SS clearfell .24m3/tree = £13.75/tonne (Wales)

7000t SS clearfell .7m3/tree = £14.70/tonne (Mid Scotland)

1600t SS clearfell .4m3/tree = £15.75/tonne Mid Scotland

 874 H.ft. Sweet Chestnut logs, roadside = £800 lump sum (S. England)

 FE Wales

1885t SS/NS thinning .30m3/tree = £14.70/tonne

4000t SS/(JL) clearfell .30m3/tree = £13.50/tonne

8350t SS/(LP) clearfell .32m3/tree = £14.50/tonne

Green spruce logs 18cm min td = £28 - £29/m3ub

Short Green logs 14cm min td = £24.75 - £27.50/m3ub

To enter a parcel into one of Beacon Forestry`s monthly sales and to receive free marketing advice contact Mike Bentley on 01721 724788 or email mb@beaconforestry.co.uk

January 2004

Electronic Timber Marketing Report

General

Strong demand for sawn softwood timber continues. The strong demand is focussed on construction and fencing grades with pallet boards fairing less well. Encouraged by the consistent demand throughout 2003 merchants and sawmillers await this spring with growing optimism.

The strong demand and a weaker pound has, at last, led to timber price increases. For the first time in 8 years Beacon Forestry’s average price per m3 obs rose during 2003. This is 7.7% up on the 2002 average price and should provide growers and independent managers some much needed encouragement.

It is however still a difficult market if you have poor quality, small diameter stands containing less popular species such as larch, fir and hemlock. Poor quality pine also finds few buyers in some parts of the UK

Strong demand does exist though for virtually all spruce crops, better than average stands of other conifer species and most hardwoods. The key to unlocking the demand so that woodland incomes improve is competition. Better prices will rarely be achieved by relying on negotiated sales and long term agreements. There are some circumstances where off-market sales can benefit the grower but there is, in our view, an overriding commercial argument for maintaining a significant level of competitive, open market activity.

Outlook

There is no sign that demand will decrease. If anything it could increase if weather conditions continue to hamper log supplies in Russia and the Baltics. Slightly longer term prospects for increased domestic competition also look good; a number of major wood fuel projects are progressing towards the time when they will start buying small round wood and sawmill co-products. If you think this is optimistic then ask yourself why some board, paper and chip mills are lobbying strongly to limit the development of wood fuelled power generation. Their argument is that increased competition for small round wood will lead to higher prices, which they say will make them uncompetitive. In a srw market dominated during the past 5 years by falling prices and reducing capacity it could be that a degree of healthy tension might be around the corner.

Hardwoods are also in demand, we have a number of buyers who are very keen to hear of any upcoming parcels, many are prepared to travel and buy from new areas.

Results from recent Beacon Sales

Private Sector

6200 tonnes SS clearfell .44m3 - £14.35/tonne

13,500 tonnes SS clearfell .33m3 - £11- £12/tonne (tender sale)

480 tonnes NS clearfell .76m3 – around £15/tonne (tender sale)

Approx 220m3 mixed hardwood logs – around 55£/m3(tender sale)

FE Wales

18cm min. top dia. Green logs at roadside – £28.25 -26.25/tonne

18cm min. top dia. Short green logs at roadside £28.50/ tonne

10743 tonnes SS (JL) clearfell/thin .17m3 - £5.60/t.

3045 tonnes MC thin .26m3 - £11.25/t.

1076 tonnes JL thin (WH/LP)  .33m3 - £2.00/t.

6871 tonnes SS (WH) clearfell .31m3 - £11.00/t.

FE Scotland

16720 tonnes SS clearfell .25m3 ( tender - price confidential, sold well, 6 offers)

To enter a parcel into one of Beacon Forestry`s monthly sales and to receive free marketing advice contact Mike Bentley on 01721 724788 or email mb@beaconforestry.co.uk

OCTOBER 2003
Electronic Timber Marketing Report

General

Strong demand for sawn softwood timber continued throughout the summer and sawmillers report being busy at present, this is encouraging as many feared the usual summer holiday slump would kick-in and fail to pick up again. The strong demand is focussed on construction and fencing grades with pallet boards fairing less well in a competitive, well supplied market.

With strong demand and a pound which continues to weaken against the main importers’ currencies, prices for round timber should improve. Whilst some standing parcels have sold very well, exceeding owners’ expectations and drawing bids from outside buyers, it is fair to say that we are not witnessing a consistent and significant increase across the whole of the UK for all species. Why?

It seems that for every gain in the supply chain there is a mitigating loss which cancels the prospect of improved returns being passed back to the owner. The main reasons are well reported in detail elsewhere and include falling values of sawmill co-products coupled with limited outlets for low grade logs and chip/pulpwood. There is also upward pressure on haulage costs and harvesting contractors are experiencing higher overhead costs, particularly through insurance premiums. Despite all that one has to wonder if owners are getting their fair share of any available improvements in overall returns. Are saw-millers and merchants holding on to it? - maybe, maybe not, but how can you be sure?

In our experience (which mirrors the experience of other sectors trading a commodity) the best way to ensure that the owner gets the best deal is to sell competitively, forcing buyers to pay as much as they can afford. Negotiated sales and long term agreements often fail to deliver the benefits promised at the outset and have the added effect of distorting the open market, usually to the disadvantage of the grower.

Outlook

As long as the pound continues to weaken and importers experience trouble getting supplies out of the Baltics this winter we will see demand continue to rise. Also, if some of the wood-fuelled power and heat plants being talked about get off the ground they will provide a much needed alternative market for sawmill co-products.

Look out though ! interest rates are expected to rise and some fear this may lead to a collapse in the housing market, unemployment and loss of consumer confidence. Happy Christmas!

Results from recent Beacon Sales

FE North Scotland

16cm min. top dia. Green logs at roadside - £27.25 – £28.00/m3ub

16cm min. top dia. Green/red logs at roadside - £27.75 - £28.00/m3ub

16cm min. top dia. Red logs at roadside - £19.50-19.75/m3ub

14cm min. top dia. Pallet logs at roadside - £16.50/m3ub

14cm min. top dia. Pallet logs at roadside - £17.50 – 18.75/tonne

10283 tonnes SS/HL clearfell .52m3 – 16.00/tonne

4268 tonnes MC clearfell .35m3 - £11.00/tonne

1381 tonnes SS clearfell .33m3 - £11.20/tonne

2841 tonnes MC clearfell .25m3 - £10.00/tonne

1442 tonnes MC thin .18m3 - £2.20/tonne

3415 tonnes MC fell .49m3 - £12.00/tonne

5293 tonnes MC thin/fell .26m3 - £8.75/tonne

2095 tonnes MC thin .78m3 - £9.00/tonne

Private Sector

13,500 tonnes SS clearfell .33m3 - £11- £12/tonne (tender sale)

480 tonnes NS clearfell .76m3 – around £15/tonne (tender sale)

FE Wales

18cm min. top dia. Green logs at roadside – £28.25 -26.25/tonne

18cm min. top dia. Short green logs at roadside £28.50/ tonne

10743 tonnes SS (JL) clearfell/thin .17m3 - £5.60/t.

3045 tonnes MC thin .26m3 - £11.25/t.

1076 tonnes JL thin (WH/LP)  .33m3 - £2.00/t.

6871 tonnes SS (WH) clearfell .31m3 - £11.00/t.

To enter a parcel into one of Beacon Forestry`s monthly sales and to receive free marketing advice contact Mike Bentley on 01721 724788 or email mb@beaconforestry.co.uk

JULY 2003
Electronic Timber Marketing Report

General

The market for round timber is perhaps healthier at present than at any time in the previous 2 years.

The reasonable run of good weather has helped ensure that demand for carcassing and fencing grades has remained high. In addition, the effect of a weaker pound has helped home grown sawmillers gain market share and increase prices for sawn products. As a result most sawmills and merchants report being very busy keeping up with demand

The positive knock-on effects to growers and managers are not as obvious, but they are there if you look.

Firstly, the number of buyers offering for individual parcels of timber sold by Beacon Forestry has increased in the past 3 months ( 6 or 7 separate bidders is not uncommon for the right sort of parcel) meaning that a competitive sale is more likely to reap rewards than a negotiated sale, and secondly, prices for certain standing parcels have exceeded expectation levels.

Don`t get over excited at this – prices are still well down on 1995 levels but at least there is an improvement to report, even if it is only around £2 - £3 per tonne standing for clearfell conifer.

The improvement in price for round timber would be greater if it were not for the reducing value of sawmill co-products and the limited outlets for red logs and chipwood.

The sort of softwood parcels selling well are ones that : are sold by the tonne, are certified, contain green log material, contain fencing products (instead of small round wood for board manufacturing) and are reasonably accessible to the sawmills and processing plants.

Homegrown hardwood prices are also benefiting from the weaker pound, making it more expensive for importers to buy from mainland Europe.

 Outlook

The customary slump in demand over the summer during sawmill holiday closures is feared by some sawmillers but it remains to be seen if this will materialise. Much depends on the housing market and currency exchange rates.

 Results from recent Beacon Sales

 Private Sector

 Lanarkshire 2400 tonnes – NS clearfell 0.5m3 - £14.00/tonne

Scottish Borders, 11000 tonnes – SS clearfell 0.22m3 - £10.00/tonne

Dorset, 2636m3 – MC thinning 0.75m3 - £5.86/m3

Midlands, 2593m3 – MC/MB thinning 0.59m3 - £1.64/m3 (poor access/extraction)

Argyll, 10000 tonnes – SS clearfell 0.49m3 - £12.75/tonne

 FE England

Green logs at roadside, FOL - £32.00 - £32.50/tonne

Short green logs at roadside, FOL - £24.00/ tonne

Red bars at roadside, FOL - £16.00 - £16.75/tonne

Fencing poles at roadside, FOL - £22.50/tonne

 752 tonnes – SP thinning 0.21m3 - £3.00/tonne

12000 tonnes – SS clearfell 0.24m3 - £14.50/tonne

4254m3 – CP/MB/MC clearfell/thin 1.09m3 - £12.22/m3

2400m3 – CP/SP/OK thinning 0.66m3 - £7.08/m3

3628m3 – CP/SP thinning 1.38m3 - £13.85/m3

 To enter a parcel into one of Beacon Forestry`s monthly sales and to receive free marketing advice contact Mike Bentley on 01721 724788 or email mb@beaconforestry.co.uk

 Beacon`s no sale-no fee commission is just 1.5% for FTA members.