Predictions for the Logging Industry 2018

Prices remain volatile, but new logging equipment purchases remain strong.  2017 saw higher prices for lumber across the entire industry. Experts predict that these high prices will continue through this year and the next, and some are concerned that these record-high prices could lead to a supply gap among exporters and importers. With the high-prices taken into consideration, the sales of new logging equipment are actually off to a strong start.

Let’s talk about the causes for this price volatility along with some predictions for the future of the logging industry in 2018.

The U.S. Department of Commerce’s Import Duties

Back in November 2017, the U.S. Department of Commerce decided to impose total countervailing duties (CVD) and anti-dumping duties (ADD) of 20.83% on Canada's lumber exports. This move shocked many; however, others saw it coming for a long time. Nevertheless, Canadian exporters swiftly raised their prices to counteract the move, resulting in higher prices for lumber across the board.

From the exporter to the importer, and ultimately to the consumer, everyone is shelling out much more for lumber this year. To counteract these higher prices, U.S. builders are now depending on a boost in U.S. domestic lumber production and European importers to avoid a potential supply gap.

The Future for U.S. Softwood

If import duties remain the same as many predict they will, industry analysts predict that by the end of the decade, there might not be enough available softwood lumber in North America to meet up with U.S. demand. Luckily, U.S. housing is starting to enter a slow period which cuts the demand substantially. To help avoid a potential supply problem, U.S. importers will need to start importing incremental supplies of lumber each year to keep up with growing demand over the next few years.

All of this being said, new logging equipment financing is off to a strong start in 2018. Industry-leading reporting firm, EDA, recently released financial data for February.

Most Successful Logging Equipment Lenders

1. JOHN DEERE INDL CREDIT                        78
2. CATERPILLAR FIN SVC CORP                      46
3. DE LAGE LANDEN FIN SVC                         25
4. WELLS FARGO VENDOR FIN SVC LLC          18
5. STEARNS BANK                                           15

John Deere continues to place first in equipment financing, as they sold substantially more than the other equipment financiers in the category. They sold equipment to companies across the U.S. using them for various purposes.

Top Equipment Buyers in February

• BLUE STAR EQT LLC DETROIT, MI                             10
• LOGGING EQUIPMENT BANDIT                                  5
• LOGGING EQUIPMENT MORBARK                             5
• TREESMITHS INC SPRING BROOK TWP, PA               5
• LOGGING EQUIPMENT ALTEC                                    5

In a separate report, EDA also disclosed the most popular equipment types sold in the U.S. at the end of 2017. Their findings are as follows:

EQUIPMENT TYPE                              BUYERS            UNITS

1. LOG LOADER                                41,547             89,621
2. SKIDDER                                      46,872             89,598
3. GRAPPLE SKIDDER                      24,636             60,225
4. CHIPPER                                      36,962             58,767
5. FELLER BUNCHER                       18,252             43,563
6. CRAWLR DOZER (LOG)                 20,806            38,263
7. STUMP CUTTER                           23,829             33,041
8. SAWMILL                                     19,883             25,644
9. WHEEL LDR (LOG)                        11,647             23,443
10. EXCAVATOR (LOG)                       10,087             23,435