Forestry holds place as second largest ag commodity

STARKVILLE, Miss. -- For all the major investments and structural changes in 2025, marked by significant sawmill expansions, shifting market dynamics and continued pressure in the pulp and paper sector, Mississippi’s timber industry observed limited monetary change.

The state’s total timber value for 2025 is estimated to be $1.47 billion, which is down 1% from last year.

This year’s harvest amounted to 36.4 million tons of timber products, which is down slightly from last year based on timber severance tax receipts. The value of standing timber paid to landowners as stumpage was $660 million, a 9% decline from 2024. The harvest and trucking industries, however, added $807 million to timber’s value in 2025, which was 7% more than last year.

Eric McConnell, associate professor of forest business in the Mississippi State University Forest and Wildlife Research Center, said the industry experienced a sizable increase in the small pine sawtimber, aka chip-n-saw, harvest at the expense of larger sized pine timber. The total value of the chip-n-saw harvest improved 17%, while the total value of the pine sawlog harvest declined 18%.

“Advanced technology is allowing pine sawmills to recover more product from smaller sized logs than traditional sawing systems, and we have had several new mills come online in recent years,” McConnell said. “Chip-n-saw logs are a lower priced product class and can provide mills cost savings if the pine sawlog price ‘premium’ becomes too high. Plus, 2-by-4s are more versatile in the market than larger lumber sizes like 2-by-12s, which are being increasingly replaced by lighter weight wood composite joists.”

Regional prices of pine plywood and oriented strand board trended down over 2025, while pine lumber prices increased in the first half of 2025 and declined in the second half. Regional appearance grade hardwood lumber prices improved throughout the year. Hardwood sawtimber saw a 14% increase in total value on a 10% increase in harvest for the year. But hardwood products overall comprised only 16% of the total timber harvest.

Stumpage is the value remaining from lumber’s product value after all costs, risks and profits have been deducted along the supply chain, including manufacturing, trucking and harvesting.

“We have seen logging costs in Mississippi exceed national inflation indexes for the industry’s inputs since 2000,” McConnell said. “The trucking sector as a whole is experiencing a persistent driver shortage, and the Mississippi forest industry is no different. Moreover, logging equipment and technology advanced.”

Collectively, this means competitive wages must follow those trends to compensate the knowledge, skills and abilities needed to safely operate the long hours logging often requires.

“A silver lining to this shift in income is logger income tends to remain local,” McConnell said. “Those competitive wages support families that own homes and vehicles, purchase groceries, have accounts with local banks and insurers and pay taxes that support roads and schools.”

Investment announcements this year included Southeastern Timber Products’ $120 million expansion of its Ackerman sawmill. The project increased the facility’s annual production capacity from 120 million to 300 million board feet -- an increase of 150% -- significantly strengthening demand for sawtimber in the region.

Biewer Lumber also announced a major investment, committing $40 million to expand its Newton facility. The expansion will add 100 million board feet of annual capacity and create 45 new jobs, building on the mill’s existing workforce of approximately 125 employees.

Sabhyata Lamichhane, a forestry specialist with the MSU Extension Service and assistant professor of forest economics at MSU, said the largest single recent timber investment in Mississippi came in September when Hood Industries announced a $245 million expansion of its Waynesboro sawmill. The expansion is scheduled to be completed in October 2026.

“Together, these projects reflect strong industry confidence, with multiple firms investing hundreds of millions of dollars in new and modernized mill capacity across the state.” Lamichhane said.

Hood Industries is also on track to open a rebuilt laminated plywood mill in Beaumont. Manchester Industries plans to open a new paper converting facility in Columbia, while SDI Biocarbon Solutions is on track to open its facility in 2026 to support its neighbor Steel Dynamics in Lowndes County. Huber Engineered Woods oriented strand board mill is on track to begin operations in 2026.

The forestry industry also faced pulp and paper headwinds. In mid-September 2025, Domtar indefinitely idled its Grenada newsprint mill, impacting more than 150 workers and reducing local demand for pulpwood. Since opening in 1989, the facility had consumed approximately 235,000 metric tons of newsprint annually, making its closure a meaningful loss for Mississippi’s pulpwood market. Enviva also closed its Amory pellet mill this year.

Lamichhane said timber market conditions in 2025 were influenced by a range of demand-side factors, including trends in residential construction, lumber mill capacity utilization, pulp and paper mill closures and conversions, tariffs on Canadian lumber imports, immigration policy and overall economic growth.

“High inflation and elevated interest rates in recent years continued to constrain housing affordability, slowing the recovery in single-family housing starts and softening demand for softwood lumber,” she said. “Weaker growth in remodeling and repair activity added further pressure, leading lumber producers to scale production in line with market conditions.”

Looking ahead, Federal Reserve interest rate cuts in 2025 may help ease construction costs and support a recovery in housing starts, potentially strengthening lumber demand. The Board of Governors of the Federal Reserve System issued three cuts to the federal funds rate over 2025. The most recent occurred Dec. 10 when it lowered the rate to a range of 3.5-3.75%.

“Pine products rely on the housing market, which in turn is influenced by interest rates,” McConnell said. “The No. 1 market for appearance grade hardwood lumber nationally is exports, and international trade has been in the news prominently throughout the year. The value of hardwood lumber exports is down 8% nationally year over year. That is more pronounced for declared exports from Mississippi, but hardwood lumber export values have been trending downward here for the last few years.”