Mexico Beach, FL., Oct. 14, 2018 Hurricane Michael made landfall on the Florida Panhandle October 10th, with 155 mile per hour winds establishing it as the strongest storm to hit the continental U.S. since 2004. With winds as high as 155 mph, the Categor.

As hurricanes intensify across the Southeastern U.S., timber markets are becoming increasingly vulnerable to sudden price shocks. New research on Hurricane Michael reveals that stumpage prices dropped sharply in the storm’s aftermath—falling 9% for pine sawtimber and plunging 77% for hardwood sawtimber in the most severely affected areas of Florida and Georgia. A broader regional analysis found a 6% decline in pine pulpwood prices across all timber micro-markets, driven largely by oversupply from salvage logging and disruptions to mill operations.

The study, titled Evaluating Hurricane Impacts on Timber Markets in the Southeastern United States: A Case of Hurricane Michael, was conducted by Austin Lamica and Rajan Parajuli of North Carolina State University and Consuelo Brandeis of the USDA Forest Service. Using a regression discontinuity in time (RDiT) model, the authors isolated the hurricane’s causal effects on timber prices following its landfall on October 10, 2018. Their findings highlight how major storms like Michael can create sudden, product-specific price collapses—especially in regions already vulnerable to climate-driven extreme weather events.

The 77% drop in hardwood sawtimber prices was recorded in the zone with the most severe timber damage, where the forest inventory fell to 22.7% of pre-storm levels. Researchers attribute this extreme decline in part to limited mill infrastructure, noting that only 10 hardwood sawmills operated in the affected areas of Florida, Georgia, and Alabama. Pine sawtimber prices in the same zone dropped 9%, with salvage harvests accounting for up to 50.5% of remaining live pine volume.

In surrounding areas—such as southwest Georgia and southeastern Alabama—prices for pine sawtimber fell by 13% in some markets and 7% in others, while pine pulpwood declined by 13% and 16% depending on location. Pine chip-n-saw prices dropped 95% in one adjacent region. These markets are within the procurement radius of mills that began sourcing cheaper salvage timber from hurricane-damaged zones.

Not all markets responded the same way. In certain locations, stumpage prices rose due to increased wood demand for reconstruction. Hardwood sawtimber prices rose 4% in parts of Georgia, while hardwood pulpwood increased 11% in nearby South Carolina. These localized gains likely reflect mills unaffected by the hurricane ramping up output to meet rebuilding demand.

Only statistically significant results were reported in the study. In several markets, price changes were observed but did not meet the threshold for statistical significance and are therefore not included in the impact estimates.

In total, Hurricane Michael damaged 6.17 million acres of timberland and led to the salvage of 1.66 billion cubic feet of wood. An additional 1.5 billion cubic feet of dead standing timber remained inaccessible due to damaged roads and wet soils. In Florida alone, 40,000 homes were destroyed and $25 billion in total damages were recorded.

The study emphasizes that hurricanes can trigger both immediate timber oversupply from salvage harvests and price volatility across local markets. Timberland owners and mill operators are encouraged to account for these localized dynamics in future forest management and risk mitigation strategies.

Please click here for the full study report.

Source:  sciencedirect.com