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Timber price tracking
B.C. company WoodX offers a market intelligence data service to prospective timber buyers to help them make prudent and competitive bids in the BC Timber Sale program, which provides a good barometer
for trends within the provincial forest industry as a whole.
By Jim Stirling
About 20 per cent of British Columbia’s allowable annual cut is dispersed under the provincially operated BC Timber Sale program.
Consequently, tracking what’s happening and where with those sales provides a good barometer for trends within the provincial forest industry as a whole.
After about three years of generally lateral movement, bids for timber under the program are now on a steady climb, reports Dean de La Mothe, the creator of WoodX, a widely read BC Timber Sale tracking system. “We’re on a general up slope,” he says.
That means bidders are becoming hungrier more consistently for wood fibre. But that said, there are blips along the way. For example, the bid prices for cedar were crazy, while those for cypress were flat at the time de La Mothe spoke with the Logging & Sawmilling Journal.
The bidders trend in the B.C. Interior is toward sales of homogenous stands of small pine. If the stand has a spruce mix, so much the better. “Bidders have gone to a smaller sawlog—about .3 cubic metres a stem—because it’s easier to mill. It represents the sweet spot of the lumber recovery factor as opposed to the larger piece sizes which are more inconsistent,” explained de La Mothe. “So we see quite a lot of strength there.”
BC Timber Sale strives to create a transparent and fair open market system for standing timber. WoodX offers a market intelligence data service to prospective timber buyers to help them make prudent and competitive bids. de La Mothe expanded on the BC Timber Sale role with a supermarket analogy: the prices are for wood on the shelf, ready to go.
“What we bid today, is the market today. It’s the truest market price we can get.” Logging and trucking costs and local knowledge are different for every sale and must be factored in, but the bid is reflective of the true stump price. “One of the cool things about WoodX is that it has levelled the playing field for everyone,” he continued.
It saves time and money by providing equal opportunities for the large forest companies and the single truck operator. “Knowledge is key to the best efficiency.”
deLa Mothe began WoodX about 14 years ago and his prior background reflects both the turbulent nature of natural resource industries in B.C. and the opportunities that arise with their fluctuations. He has a background in geophysics and was involved in the mining industry until it was hit by one of its periodic commodity price slumps. He became a contractor for BC Timber Sale until a slump in lumber prices hit that sector. “Then I moved into high tech, computer networking for large corporations. I did some rewarding jobs but the tech industry is very stressful.” He switched locations, from Vancouver to Penticton, B.C., and reverted to forestry writing code and becoming an active bidder in the BC Timber Sale program. That required gathering accurate information to formulate a competitive bid.
WoodX emerged from that process. It comprises a wealth of data ranging from a region’s bidding history to the people making the bids. WoodX is used by mills, loggers and traders to learn the prevailing timber prices and who owns which sale. It provides the activity levels of bidders on each sale and by geographical area. WoodX users can also acquire timber sale management experience in terms of open to bid sales and the subsequent tracking of where wood is delivered.
“The key is the data base in the background,” emphasized de La Mothe. WoodX provides what he called a relational data base, which essentially links other relevant lists together. The upshot of that is the ability to view many data sources in a single frame without spending time and effort hunting for individual pieces of information needed to formulate the most cogent bid. “WoodX has evolved as a default tool for industry. Loggers to buyers can use it without having to learn a program.”
The WoodX data bank requires constant upgrading to maintain its timeliness and accuracy, and through that the value of the information it offers prospective timber sale bidders. de La Mothe said he and his staff work diligently to accomplish that. He is a strong advocate of the BC Timber Sale process in general and the function it fills in B.C., Canada’s largest timber producer by volume. “I believe BC Timber Sale is the most efficient, effective marketer of wood in North America. It really is a success story as far as getting the wood out and creating a market for it,” he summarized. And through that exercise in market dynamics for today’s wood, it provides valuable insight into future timber type demands and trends.