The market for hardwood lumber has not improved in Tennessee since the last report; still remains "terrible" at best. Two bright spots are railroad ties and pulpwood - both are strong and have increased in price in an attempt to help with the higher cost of transportation primarily. Many sawmills are low in log inventory, partly because of the rainy weather, but also because of the poor market and inability to generate a profit. It is difficult to find something you can cut that will be positive. The high cost of fuel is making it extremely tough for loggers to make ends meet. Tough to find timber to cut as well for some as some landowners, aware of the poor market and are waiting for better times to sell their timber.

Overall, U.S. lumber production through the first quarter this year totaled 7.541 billion board feet, down 16.5% compared to the first three months of 2007, according to the Western Wood Products Association. Firstquarter production in the West was down 20.9%, while production in the South declined 12.0%. WWPA also released final 2007 production figures for the West. The region produced 16.3 billion feet last year, a 9.3% decline compared to 2006.

Timber-Mart South reports that south-wide average sawtimber stumpage prices declined significantly this quarter compared to 4th Quarter 2007 and to one year ago. Pulpwood prices, however, eased upwards. Stagnant housing and lumber markets weakened solid wood prices, while strong domestic and international pulp markets supported higher pulpwood prices. While hardwood lumber markets have been hard-hit by the U.S. housing market slump, hardwood products also have a strong and strengthening export market.