Impact of weather on harvesting and stumpage prices

Matthew Pelkki, R.F., C.F., Ph.D.George H. Clippert Endowed Chair

Impacts of Weather on Harvesting

• Wet weather

• Drought/dry weather

• Climate change = difficult planning

Impacts of Weather on Stumpage Prices

Jul-98 Apr-01 Jan-04 Oct-06 Jul-09 Apr-12 Dec-14$0

$5

$10

$15

$20

$25

$30

$35

-1.500

-1.000

-0.500

0.000

0.500

1.000

1.500

2.000

2.500

Hdwd Saw Prices Standard Precipitation Index

Har

dwoo

d Sa

wtim

ber

Stum

page

Pric

e

Stan

dard

Pre

cipi

tatio

n In

dex

(Ark

ansa

s St

ate

Avg.

)

Impacts of Weather on Stumpage Prices

Jul-98 Apr-01 Jan-04 Oct-06 Jul-09 Apr-12 Dec-14-$10

-$5

$0

$5

$10

$15

-1.500

-1.000

-0.500

0.000

0.500

1.000

1.500

2.000

2.500

Hdwd Saw Prices Standard Precipitation Index

Chan

ge in

Har

dwoo

d Sa

wtim

ber

Stum

page

Pric

e

Perv

ious

Qua

rter

's

Stan

dard

Pre

cipi

tatio

n In

dex

(Ark

ansa

s St

ate

Avg.

)

Conclusions• Deviation from expected precipitation levels in the

previous period explains between 6 and 20% of the changes in stumpage prices– Drier means lower prices– Wetter means higher prices

• Still many other factors more significant and important in affecting stumpage prices for timber

• Economists and weather forecasters cannot be separated on the basis of accuracy in predicting the future.