1. Impact of weather on harvesting
and stumpage prices
Matthew Pelkki, R.F., C.F., Ph.D.
George H. Clippert Endowed Chair
2. Impacts of Weather on Harvesting
• Wet weather
• Drought/dry
weather
• Climate change =
difficult planning
3. Impacts of Weather on Stumpage
Prices
$35 2.500
Standard Precipitation Index
$30 2.000
Hardwood Sawtimber
(Arkansas State Avg.)
1.500
Stumpage Price
$25
1.000
$20
0.500
$15
0.000
$10
-0.500
$5 -1.000
$0 -1.500
Jul-98 Apr-01 Jan-04 Oct-06 Jul-09 Apr-12 Dec-14
Hdwd Saw Prices Standard Precipitation Index
4. Impacts of Weather on Stumpage
Prices
$15 2.500
Change in Hardwood Sawtimber
Standard Precipitation Index
2.000
(Arkansas State Avg.)
$10
Pervious Quarter's
1.500
Stumpage Price
1.000
$5
0.500
$0
0.000
-0.500
-$5
-1.000
-$10 -1.500
Jul-98 Apr-01 Jan-04 Oct-06 Jul-09 Apr-12 Dec-14
Hdwd Saw Prices Standard Precipitation Index
5. 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.
Editor's Notes
Wet weather = increased costs = more BMPsDry weather = reduced costs (but not so much compared to the increased costs of wet weather) = improved and less expensive access into areas that usually cannot be harvested = some increases in BMP establishment if seeded logging sets and skid trails don’t have adequate moistureClimate change makes it tough to plan, normal cycles of purchase and storage can be disrupted, mill supplies can reach critical levels if rains disrupt harvest in what is normally a “drier” portion of the year
Prices versus precipitation deviation (not total rainfall, but deviation from median amount) While Palmer's indices are water balance indices that consider water supply (precipitation), demand (evapotranspiration) and loss (runoff), the Standardized Precipitation Index (SPI) is a probability index that considers only precipitation. The SPI is an index based on the probability of recording a given amount of precipitation, and the probabilities are standardized so that an index of zero indicates the median precipitation amount (half of the historical precipitation amounts are below the median, and half are above the median). The index is negative for drought, and positive for wet conditions. As the dry or wet conditions become more severe, the index becomes more negative or positive.Plot of timber prices from 2001 to mid-2012
Correlation is statistically significant at the 5% level of error
