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Forestry was Mississippi's second-largest agricultural commodity for 2014, with a preliminary year-end harvest value estimated at $1.28 billion, a 13.8 percent increase from 2013. (File photo by MSU Ag Communications/Linda Breazeale)

2014 forest product value holds No. 2 spot

MSU Extension Service

MISSISSIPPI STATE -- A production bump has helped forestry maintain its status as Mississippi’s second largest agricultural commodity.

James Henderson, associate forestry professor with the Mississippi State University Extension Service, estimated the state’s 2014 harvest value was $1.28 billion, which represents a 13.8 percent increase from the $1.13 billion in production reported in 2013.

Since 2009, the least productive year since the recession started, the state’s forest harvest value has increased 48 percent.

The latest estimate is preliminary, Henderson said. More complete data will reveal the official value in February.

Nationwide demand for housing has driven up production for the past three years, a trend Henderson said he expects to continue.

“Expectations are for a nearly 20 percent increase in total U.S. housing starts in 2015. This will be led by single-family starts, which have not done as well as multifamily starts over the past several years,” Henderson said. “Multifamily starts over the past few years have benefited from greater rental demand; however, more potential first-time homebuyers are moving into the market.

“The U.S. economy continues to strengthen as evidenced by U.S. gross domestic product growth, which is expected to be 3 percent or better during 2015,” he said. “Along with that, unemployment fell below 6 percent in 2014 and is expected to be 5.3 percent by the end of 2015.”

Henderson said demand for oak and mixed hardwood sawtimber in 2014 was one of the bright spots of the year. Oak sawtimber stumpage prices were up 17.1 percent over 2013, averaging about $433 per thousand board feet as of the third quarter. Mixed hardwood sawtimber figures were up 10.8 percent, averaging $320 per thousand board feet. Pine sawtimber prices dipped 1.6 percent from 2013, averaging $189 per thousand board feet at the end of the year.

Henderson said those figures are calculated using the Doyle log scale, which is the standard by which hardwood logs are bought and sold.

“Demand for quality hardwood lumber and hardwood mats was strong during 2014,” he said. “Hardwood mat demand has soared with the increased oil and gas drilling in the U.S. Increasing improvement in the U.S. housing starts are also helping to increase demand for pine sawtimber. We are set to end 2014 with U.S. housing starts at 1 million units, compared to the 2009 level of about 554,000 units.”

Pulpwood stumpage prices, however, were down from 2013, according to estimates. Pine pulpwood prices fell 9.2 percent, averaging about $22 per cord as of the third quarter. Hardwood pulpwood prices dipped 4.1 percent to about $31 per cord.

Henderson said the closure of International Paper’s Courtland, Alabama, mill in March has impacted markets in northern Mississippi. Lack of pulpwood demand and less competition caused prices to fall.

“The stumpage price for pine pulpwood in north Mississippi fell 32 percent from the third quarter of 2013 to 2014, while the drop in the southern half of the state for the same period was only 5 percent,” Henderson said. “Pulpwood markets in the southern half of the state benefit from greater competition.”

David Jones, Extension forest products specialist and associate professor in the MSU Department of Sustainable Bioproducts, said he expects timber production to keep increasing because the market has room for improvement and supply is beginning to stagnate in other areas of the country.

“Companies from Canada and the Pacific Northwest are purchasing sawmills in Mississippi, primarily because their wood supply has gotten a little lighter.” Jones said. “They’re seeing opportunities to come down here, purchase sawmills and run them.”

Jones said he also expects the energy market to improve, but this trend will have more of a local and regional impact than a statewide one.

“It’s going to be more toward solid fuels like wood pellets and less toward the liquid fuels,” he said.

Released: December 19, 2014
Photos for publication (click for high resolution image):
  • Forestry was Mississippi's second-largest agricultural commodity for 2014, with a preliminary year-end harvest value estimated at $1.28 billion, a 13.8 percent increase from 2013. (File photo by MSU Ag Communications/Linda Breazeale)
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