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Canadian sawmills, which export a majority of their lumber to the U.S., ramped up production during 2012 to meet the resultant rise in demand for lumber. In particular, sawmills in the eastern provinces saw output jump 16%o in the fourth quarter.

U.S. lumber prices have risen by over 6OVo from late 2011 to March 2013-drawing the attention of sawmills far away from North America. With substantially higher prices and a predicted increase in the demand for lumber in 2013, many foreign companies hope to be able to increase shipments of lumber to U.S shores in the coming year.

The strong lumber market has similarly pushed sawlog prices upward throughout North America. Prices for Douglas-fir sawlogs in the Western U.S. reached a fiveyear high in founh quarter 2Ol2.Prices continued upward in first quarter 2013, due to higher log demand both from domestic sawmills and from log buyers in Asia.

Sawlog prices have also inched up in Coastal British Columbia and Eastern Canada as a result of tighter log supply. Pine sawlog prices in the U.S. South have been surprisingly stable since 2010 and, in fourth quarter 2072, were close to their lowest level in almost l5 years.

However, with the improved housing market in the U.S. and higher lumber prices, it can be expected that sawmills will increase the consumption of logs and that the Southern states will follow the rest of North America with uoward trending log prices during 20 I 3.