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Forestry remains steady despite 2017 challenges
RAYMOND, Miss. -- Despite a slow housing market and other lingering effects of the recession, Mississippi’s forests remain the state’s second most valuable agricultural commodity for 2017.
John Auel, an assistant Extension professor of forestry at Mississippi State University, estimates the value of forest products is $1.4 billion, which is a decrease of 8.6 percent from 2016. However, 2017 numbers are almost 40 percent higher than they were in 2009, when the industry experienced its lowest valued harvest of the 2007-2009 recession.
“All timber categories, except oak sawtimber, have seen a decrease in price. That could be due to wet weather in late spring and early summer,” Auel said.
Oak sawtimber remained steady with a 0.3 percent increase over 2016 prices, and it sold for $433 per thousand board feet. Pine sawtimber experienced a decrease of 2.3 percent, averaging about $182 per thousand board feet. Mixed hardwood sawtimber declined by 5.4 percent, averaging about $344 per thousand board feet. Pulpwood categories were the hardest hit, with pine pulpwood falling 15.4 percent to $17.75 per cord and hardwood pulpwood falling by 24.3 percent to $19.50 per cord. These figures are estimates. More complete data will be available in February.
Randy Rousseau, an MSU Extension and research professor, said the condition of the industry depends on which area of the state landowners occupy. While the entire state has a surplus of timber, markets vary north and south of Interstate 20.
“The biggest issue in the northern part of the state is there are no mills to process pulpwood because the demand has dried up,” Rousseau said. “There is a one-year wait for pine producers to get their stands thinned. These are trees that were planted 12 to 17 years ago and now have 700 trees per acre, which is way too many. But the pulpwood market where these trees would go has gone away to a great extent.”
Overseas markets for biomass pellets are strong and provide a decent outlet for producers in the southern portion of the state. The hardwood market in south Mississippi also is pretty good because of the demand for quality hardwood lumber, Rousseau said.
“Despite decent demand for these products, we still have a surplus of timber that has been brought on by the globalization of markets,” he said. “It’s not an uncommon scenario across the U.S. We’ve lost the pulp and paper market to countries like Brazil and China, where timber grows well and labor is less expensive.”
Pine sawtimber markets are heavily dependent on the housing market, which has remained steady but not as vibrant as before the housing bubble collapse in 2008. Housing starts stood at 1.29 million units in October 2017, a slight decrease of 6.42 percent from October 2016.
“Even though we have a decrease, housing starts are much higher than at the height of the recession, which is indicative of a healthy U.S. economy,” Rousseau said.
Some landowners are considering their options as they face limited pulpwood markets and a surplus of timber possibly at risk for damage or loss from insects, disease and natural disasters.
“Some people are converting traditional forestland back into pasture or to a use that brings more immediate returns, such as real estate,” Rousseau said. “For mixed hardwood, the market is still viable but has shifted from almost entirely to Europe to new markets in Japan and Mexico.”
Extension experts said they believe the outlook for 2018 is positive despite this year’s low prices. Auel said he expects housing starts to continue on an upward trend based on the low number of available homes on the market. Rousseau said tentative plans for possible construction of additional pellet mills along the Tennessee-Tombigbee Waterway could help pine producers in the northern half of the state.
Mississippi producers also could tap other specialty markets, Rousseau said.
“There is a tremendous market for whiskey and wine barrels made out of white oak,” he said. “We can grow quality white oak here, but we need to do additional research and marketing work to better capture this product line. There is a bias by some folks who buy lumber for this purpose. It’s kind of like when someone asks, ‘Where do I go for good race horses?’ The answer is usually not Mississippi. We, in Extension and research, are investigating ways to show that our white oak will compare favorably with white oak from those areas thought of as preferred states.”
Foresters should remain vigilant, as some insects and invasive species continue to threaten the health of Mississippi forests.
“In 2017, there was an increase in southern pine bark beetle activity, which needs to be closely monitored. We want to try to avoid a large loss of pine trees like we experienced in 1996 and 1997,” Rousseau said. “The emerald ash borer is an introduced pest that has quickly spread through the eastern U.S., killing large numbers of various ash species. It has not been confirmed in Mississippi, but it is present in all of our surrounding states.”