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2006 forest product decline may repeat
MISSISSIPPI STATE -- Mississippi's 2006 timber harvest value declined almost 17 percent from the previous year, and industry watchers do not expect much improvement in 2007.
Glenn Hughes, a forestry professor with Mississippi State University's Extension Service, said a significant amount of Hurricane Katrina-damaged timber remains in storage -- wet-decked -- in lumber yards awaiting use.
“In addition, the housing market tanked across the South in 2006, which is where a lot of the lumber normally goes, and it hasn't picked up much,” Hughes said. “A combination of the glut of timber and the weak housing market has not allowed prices to improve much in 2007.”
Glenn said he expects improvements to begin near the end of 2007 or even in 2008.
“Recovery from Hurricane Katrina has been very slow as homeowners settle disputes with insurance companies and future insurance rates remain in limbo,” he said. “The good news is that once recovery time arrives, it will be a boom for the entire timber industry, including private forest landowners, loggers and manufacturers.”
Hughes said the 2006 drought made Mississippi forests vulnerable to damage from Ips pine bark beetles. Their sporadic damage was most visible along highways as they were spread by trucks moving infested trees. Rainfall amounts received so far and predicted for the rest of 2007 is much better than last year, which will help reduce widespread problems.
“I've heard some reports of green timber sales reaching pre-Katrina prices, but it will take an earnest recovery to pass the 2006 timber harvest value,” he said.
Marc Measells, a research and Extension associate with MSU's Department of Forestry, recently reported final figures for 2006.
“The total value of Mississippi's 2006 timber harvest at the first point of processing was just over $1.2 billion,” he said. “While that is lower than 2005, it is the 14th year for the state's timber production value to exceed $1 billion. The only more valuable agricultural commodity in the state is poultry and eggs, valued at $2 billion.”
Measells said Hurricane Katrina in 2005 caused a major disruption in timber markets and lumber production, especially in south Mississippi. Other factors that hurt standing and delivered timber prices in 2006 included rising imports, energy costs and a declining residential housing market, the worst in nearly 20 years.
“As a result, prices fell significantly across the state during 2006,” Measells said. “The harvest volume of pine sawlogs decreased by almost 3 percent, and the value declined by more than 12 percent. Pine pulpwood volume decreased by 13 percent, and the value decrease by 20 percent.”