MISSISSIPPI STATE -- Hurricane-damaged trees that flooded the market and drove prices down are the primary cause for an expected 9.6 percent decline in Mississippi's timber harvest value.

Marc Measells, a research and Extension associate with Mississippi State University's Department of Forestry, recently predicted the state's timber harvest value at $1.3 billion in 2006, compared to $1.45 billion the previous year. He based his estimate on timber severance tax collections and timber prices through October.

2006 was a striking contrast to 2005 when the state's No. 2 agricultural commodity's value increased almost 16 percent from the previous year. Forestry ranks just behind poultry with an estimate value of almost $2 billion.

“The decreased value for 2006 is a result of the decline in prices for all products. Average prices for pine sawtimber dropped by 6.3 percent through October,” Measells said. “Mixed hardwood sawtimber declined by almost 10 percent, while oak sawtimber declined by almost 14 percent. Pine pulpwood prices have declined more than 9 percent and hardwood pulpwood prices declined 18.6 percent for the year.”

Measells said Hurricane Katrina interrupted lumber production and disrupted timber markets, especially in south Mississippi, in 2005. When harvest resumed, many landowners worked quickly to sell damaged trees before they lost more quality, thus dumping a large amount of poor quality trees on the market.

“As a result, the standing and delivered timber prices have fallen significantly across the state in 2006,” he said. “Other factors contributing to the declining prices included rising imports and energy costs as well as the declining residential housing market.”

Glenn Hughes, Extension forestry professor in south Mississippi, said the housing market historically has a significant influence on timber prices. That continues to be true despite increased use of imported wood, primarily from Canada.

“Most of the wood produced in Mississippi remains in the South, and much of it is used for residential purposes,” Hughes said. “That means housing has a huge impact on our market and therefore on timber prices.”

Hughes said single-family home sales in the South declined 4 percent to almost 13 percent in the first three quarters of 2006, compared to the same quarter in 2005. Building permits for new, privately owned housing for October were 24 percent below the previous October. Privately owned housing starts for the same month were 32 percent below October 2005.

“Additionally, many of the log decks that were established after Katrina are still full of sawtimber-sized wood. The large supply of wood and poor building demand does not bode well for the timber market until the later half of 2007,” Hughes said. “That will be when rebuilding in Katrina-damaged areas should pick up its pace and increase the demand for forest products.”

Hughes also said that as more attention turns to reforestation of Katrina-damaged areas, landowners should get seedling orders in early or risk not being able to get trees.