Stumpage prices: a review of influential factors

Stumpage prices are important to both public and private landowners as they affect the profit received from a timber investment and are an important aspect of the total cost equation for forest products. We performed a review of the major factors affecting stumpage prices mainly using peer-reviewed forestry literature published from 2000 to 2015. We concentrated on journals published in English that were judged the most relevant for publishing research which assessed stumpage price trends and the economics associated with stumpage price levels. Most of the published literature concerned trends observed in North America and Europe, and computational analyses into the factors that helped explain variation in stumpage prices. Variation in stumpage prices arises from national and regional demand and supply factors and market developments, regional and local manufacturing costs, seasonal variation in wood supplies, the occurrence of natural disasters, and various regulatory and organizational policies and procedures. At a local level, the sale mechanism (auction, negotiation), the physical location of forests with respect to mills or woodyards, the forest site characteristics, and other sale-specific aspects can affect the stumpage price. Variation in regional stumpage price levels also is influenced by geography, hauling distance, and competition. We proposed a few areas of future research that would complement prior analyses of local and regional stumpage price trends and that might examine the global technology, business, and market factors that may influence stumpage prices received by private landowners in countries where private ownership of land is significant.