Modeling Prices for Sawtimber Stumpage in the South-Central United States

The South-Central United States, which includes the states of Louisiana, Mississippi, Texas, and Arkansas, represents an important segment of the softwood sawtimber market. By using the Seemingly Unrelated Regression (SUR) method to account for the linkage among the four contiguous timber markets, this study examines the dynamics of softwood sawtimber stumpage markets within the region. Based on quarterly data from 1981 to 2014, the findings reveal that both pulpwood and chip-and-saw (CNS) prices have a positive influence on the Texas and Arkansas sawtimber markets. Moreover, Granger-causality tests suggest that unidirectional causality runs from pulpwood and CNS markets to the respective sawtimber market. Compared to the pre-financial crisis period, sawtimber prices in these four states are 9%–17% lower in the recent years.