Files
Abstract
Three different aspects of timber markets were addressed using 40 years of quarterlyprice data provided by Timber Mart-South for 22 regions in 11 southeastern States. Markets for pine sawtimber (PST) and pine pulpwood (PP) were determined across regions using one-price cointegration and accounting for endogenous structural breaks. The PST markets could be interpreted as nine minimarkets or six markets that were driven by three independent markets made up of the largest mill-capacity regions. The PP markets were one major market that spanned from northern Georgia to southern Texas (seven regions) and four markets made up of two regions. Compared to earlier studies, the markets were more fractured. The timing ofendogenous breaks was consistent across regions, with breaks in the early 1990s for PST and PP and again in 200708 for PST. Causality among prices of PST, PP, and chip-n-saw (CNS) from southeastern markets in the United States was determined using the Granger causality test. Based on the number of significant predictabilities, the strongest causality was for prediction of CNS from PST, and the weakest was for prediction of PP from CNS. Of all the regions, the highest number of significant causalities was in northern Alabama and southern Georgia; no causalitiesiiwere significant in southern Arkansas and northern Louisiana. Stumpage and delivered pine prices plus their differences were also analyzed with Granger causality tests. For both PST and PP, fewer than 40% of regions had significant delivered-to-stumpage causality, but more than 80% of regions had significant stumpage-to-delivered causality. Accounting for breaks and seasons had an effect for PP but not for PST. Effects of other factors were examined for southern Georgia. Mining/logging wages and midwestern housing starts were significant for stumpage anddelivered prices. Industrial production and average hourly construction wage were significant for differences between stumpage and delivered prices. Industrial production was significant for delivered but not stumpage prices. In contrast, the 10-year treasury rate was significant for stumpage but not delivered prices. Delivered prices generally affected stumpage prices more; however, causality was dependent on season and breaks.