Over the next decade, the surplus of cork in the southern United States will decrease, leading to higher regional sawn timber prices

The southern United States cork wood resources are very important, cost-competitive, and increasingly important for the global supply of several forest products.

In 2020, an estimated 12% of the world's conifer timber will be harvested in the region. Over the past 15 years, the Southern United States has accumulated a large inventory of cork wood. Timber harvests were almost equal to net growth in 2000, but during the housing crisis and the Great Recession of 2007-2009, timber production, sawmilling demand and logging fell sharply, resulting in an increase in cork wood stocks. Over the past decade, the demand for softwood sawn timber has increased as sawmill production has recovered. Higher log consumption results in a narrower difference between timber harvesting and growth, thereby reducing the accumulation of additional log surplus.

However, there is still a large gap between the amount of cork timber harvested (discharged) and the net growth in productive woodlands in the southern United States (estimated to be about 62% of the increase in 2020).

Despite the surplus of cork wood in the U.S. region, supply is becoming increasingly tight in micromarkets, namely the Atlantic states, primarily South Carolina, Georgia and Florida. At the same time, most Gulf states have healthy surpluses. Over the next decade, the southern United States will enter a new phase in which cork inventories are no longer increasing, and timber harvesting may exceed growth rates in some states.

Due to the oversupply of timber in the region and the low cost of timber, the southern United States has attracted more interest and investment not only from North America but also from Europe and Asia.

Sawn timber prices in the region have always been one of the most competitive in the world and have been low for more than a decade. From 2011 to 2021, sawn timber prices in the Southern United States are 10-30% lower than the Global Sawn Timber Price Index (GSPI). The pattern of coniferous pulp logs and wood chips is similar, with prices significantly lower than the global wood fiber price index over the past decade.

The outlook for sawn timber prices is that the gap between the micro-market with tight log supply and the micro-market with a large surplus of cork will widen. On the other hand, pulp wood prices are likely to remain at current levels or even decline in the medium term due to limited changes in wood fibre demand and an increased supply of sawn timber residues and pulp logs.