Hardwood stumpage price trends and regional market differences in Pennsylvania

Pennsylvania is a major hardwood lumber producing state. Since 1984, the Pennsylvania Timber Market Report (TMR) has provided quarterly stumpage and mill-delivered prices for important timber species groups for four subregions within the state. Stumpage price data covering the period from 1984 to 2000 are available for eight species groups. These series were analyzed with log-linear regression to determine nominal and real price growth rates. While all species show increasing prices over the period, three distinct groups are identified. Black cherry and hard maple show the highest rates of price growth (10.1% to 14.1% nominal and 6.5% to 10.7% real); northern red oak, soft maple, and yellow-poplar form an intermediate group (6.6% to 9.5% nominal and 3.1% to 6.1% real); and white oak, white ash, and miscellaneous hardwoods show the lowest rates of growth (4.3% to 6.8% nominal and 0.0% to 3.6% real). Additionally, a regression model with qualitative regional variables (i.e., "dummy" variables) was used to test whether the four market regions used by the TMR are statistically different, in terms of both the general level of prices and rates of change. The results clearly show significant differences in the price levels and trends among all regions for at least some species groups. The two regions showing the fewest significant differences are the southeast and southwest regions. The two northern regions are quite different from the southern regions. The northwest region was the most distinct of all the regions. Specific regional differences are noted for individual species groups.