This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha
Sawlog customers were cautious last year
“During 2014, Southern lumber producers were generally cautious in their production decisions. For some producers, construction activity at their mill and startup challenges with new equipment disrupted their production. We expect these production headwinds to shift to tailwinds in the latter half of 2015, as they work out the kinks in their new equipment.
Other customers are in the midst of their capital projects and we expect this increased capacity will come online over the course of the next two years. All this investment bodes well for southern sawlog demand in the coming years
Packaging customers remained healthy and competitive
“Packaging customers remained healthy and competitive the other customers who bought the bulk of our southern pulpwood production, some new pulp mills began taking deliveries towards the end of 2014 and others are scheduled to begin production over the course of 2015. As these mills move up the start up curve, we expect them to exert healthy competition in their local pulpwood markets.
3.5-3.8m tons of timber for 2015 in Northern Segement
“Looking forward to 2015, we are planning to harvest between 3.5 million tons and 3.8 million tons of timber in the Northern segment, with roughly a 60-40 mix of sawlogs and pulpwood. We expect to see the normal seasonal variation in harvest volume, with the second quarter harvest being the lowest of the year.
15m tons in the south
“For 2015, we are expecting harvest between 15.5 million tons and 16.2 million tons of timber in the South. We expect the mix to be similar to 2014’s harvest, approximately 42% sawlogs, 58% pulpwood.
Timberland selling for 2k per acre in the south
“n the South, where well-managed industrial timberlands are being valued in excess of $2,000 per acre, the price premiums associated with HBU lands have compressed to the point where the current premiums are not as compelling. In these markets, we are inclined to hold these properties off the market for the time being and allow the HBU premiums to bill to the point where the value differential is more substantial.
Maybe some slowing from China but western markets very tight
“As we think about Asia, we are seeing probably slightly slower demand coming from China here early in the year for the first six months. Inventories in Asia have come down significantly from where they were six months ago. I think there is still a little bit of rebalancing there to take place and then we will probably see a better feel for their underlying demand, but our Western markets, they remain very tight.
The Chinese just need to get their inventories in line
“Clearly, we have seen the shiploads in the last few months going from the west coast to China have come down significantly.
I think the inventories were as high as 4.5 million cubic meters. They are down to 3 cubic meter and 3.4 meters 3.5 meters now, still above where they like them and there is a different balance in each port, but I think it’s the next six months, where the Chinese really get their inventories in line and then we will see activities normalize.