The annual increase of Northeastern regional timber stumpage prices: 1961 to 2002

Annual percentage rates of change for Northeastern regional sawtimber and pulpwood stumpage prices were estimated for the period 1961 to 2002. In addition, we examined if there have been any changes in the annual percentage rate of change during the same period. The results showed that the real (nominal) annual percentage rates of change for hardwood sawtimber and softwood pulpwood stumpage prices were 4.6 percent (8.5%) and 0.7 percent (4.6%), respectively. Annual real hardwood pulpwood stumpage prices increased at 0.6 percent while annual nominal hardwood pulpwood stumpage prices increased at a faster rate during 1961 to 1981 than during 1982 to 2002; namely, 7.3 vs. 1.6 percent, respectively. Annual nominal softwood sawtimber stumpage prices increased at 5.2 percent while annual real softwood sawtimber stumpage prices increased at a slower rate during 1961 to 1981 than during 1982 to 2002; namely, 0.6 vs. 2.2 percent, respectively. This research indicates that an average landowner holding an average mix of hardwood sawtimber could reasonably achieve a 4.6 percent annual increase in the revenue from a future sale of that sawtimber due to real price appreciation alone. The same landowner may achieve greater or lesser gains depending on species composition, structure, age, and density of the stand combined with prudent forest management choices. While the annual percentage rates of change described here may not reflect the stumpage markets of a specific sub-state region or individual property, they may provide a forestry consultant with additional information to help compare potential returns from forest management to other uses of a landowner's capital such as mutual funds, stocks, and bonds.