Forecasting hardwood stumpage price trends in Pennsylvania

Commonly used timber species with the longest time series in the Pennsylvania Timber Market Report (TMR) fell into three distinct groups of price growth over the 1984 to 2003 lifespan of the TMR. Black cherry and hard maple had the highest growth rates, followed by northern red oak, soft maple, and yellow-poplar that grew at lesser but still high rates, and lastly white oak and white ash showed the lowest growth rates. The 1984 to 2003 trends show 0.1 to 3.0 and -0.2 to 2.4 point lower nominal and real annual growth rates, respectively, compared to the 1984 to 2000 period due to the economic downturn of 2001. Using a generalized least squares regression model to compensate for strong autocorrelation, forecasts with the full autoregression model (including autoregressive parameters) were not significantly better than the structural linear model alone. Due to the volatility and cyclical nature of the price series, forecasts of more than one quarter have increasingly high errors.