No other land produces more clean air and water or more wildlife habitat than forest ecosystems, and in Mississippi forestland takes up much of the state.
It’s the role that forest ecosystems play in Mississippi that will be highlighted in a new forestry exhibit at the Mississippi Museum of Natural Science. After months of design work and planning, the artist’s rendition of the forest ecosystem display was unveiled last Tuesday evening, Oct. 22. The event was the opening event for the Mississippi Forestry Association’s (MFA) 65th Annual Meeting, held Oct. 22-24 at the Hilton Jackson, where the forestry industry in the state was discussed.
“It’s going to take months to build,” said Bruce Alt, executive vice president of the MFA of the museum exhibit.
The exhibit is estimated to cost more than $150,000 to build. A capital fundraising campaign has been started to raise donor funds. Various individuals have already committed nearly one-half of the funds necessary to build the exhibit.
Everard Baker, assistant state forester, said the exhibit is important to the state because of the role that the forest industry plays in Mississippi.
“It’s just such an important part of our daily lives,” Baker said. “It’s one of the most important factors of the state and it will continue to be.”
However, the importance of the industry to the state does not preclude the fact that timber continues to be a volatile commodity that goes up and down for a number of reasons.
“We’ve lost some major wood fiber markets in the state in the last couple of years,” Alt admitted. “We’re in a prolonged cyclical downturn heavily impacted by the effects of global competition. We are growing far more wood fiber than we’re currently using, so our challenge is one of economic development-developing markets for the wood fiber that private landowners are investing in and producing.”
Long term, however, timber continues to be a valuable investment. Alt, for one, says people in the forest products industry have a preference of owning forestland, which changes over time.
Dick Molpus, president of The Molpus Company, The Molpus Woodlands Group (MWG) and Molpus Timberlands Management LLC (MTM), agreed with Alt that long term, timberland is a solid investment particularly in the U.S. Gulf South.
“Demand will increase as the population and the middle class expands,” Molpus said. Molpus and his staff work for individuals or individual groups, buying and managing properties for pension founds. MWG and its sister operating company MTM are together one of just 12 timberland investment management organizations in the United States. MWG acquires, manages and eventually sells timberland for clients. The focus of the company is on long-term investments of more than 10 years to ensure optimum cash returns and responsible forest stewardship simultaneously.
Molpus said timberland has up and down cycles and those who want to invest in timberland with short-term horizons are encouraged to stay away from timber because it is such a volatile market. But for the patient individual, long term the return is solid and the risk is low.
For the patient individual, returns sound good now-there’s an average of 10% to 14% return on investments that timberland normally offers.
“That’s one reason we’re having real intense interest in timberland right now,” Molpus said.
But three years ago, with clients who were making 25% to 30% returns a year in the stock market, many asked themselves why they were investing in timberlands. After the downturn of the stock market however, Molpus said his clients’ attitudes changed.
Dr. Bob Daniels, extension professor at the forestry department at Mississippi State University, said the forest products industry as well as the pulpwood industry has been going through a period of consolidation and mergers.
“It’s been a slow time for the industry although this year seems to be a little better than last year, which maybe was the bottom,” Daniels said. While pine saw timber prices have fallen off about 30% from the peak the industry saw three years ago, however, prices are still good and the market is decent right now. And housing starts have remained steady as well, with a reported annual adjusted rate of 1.8 million units-also good news for the lumber industry.
On the other hand, however, the pulpwood market has been off the last couple of years, hit hard by overproduction. Companies are still working to get stock values up.
The pulpwood market for landowners has been weaker than it was two or three years ago as well. Standing prices have dropped 40% to 50%. But there is still a demand for pulpwood, and recently in a conversation with foresters Daniels found that prices had moved up some for pine pulpwood. Long-range projections, however, are that prices will stay fairly steady for pulpwood returns.
Even with this news, Daniels said the fact that the harvest timber is up this year over last is good news. It’s indication that markets are strengthening and steadying out, he said.
Assistant state forester Everard Baker said the timber industry in the state is holding its own for the most part.
“Of course it’s like the rest of the economy,” Baker said. “It fluctuates like everything else does.”
But, Baker said, timber prices are fair.
“We’re still planting trees,” Baker said. “We’re not planting as many
as we need to be planting right now but here again that goes back to the economy.”
Regardless of how the industry is doing nowadays, it’s still important to note that many of the small towns in Mississippi that started 100 or more years ago were as a result of the industry.
“We have 18.5 million acres of forestland in Mississippi based on a 1994 number,” Daniels said. “I’m confident we have more than that now.
The forest products industry is very important and has been important in the development of this state. It will continue to be.”
Contact MBJ staff writer Elizabeth Kirkland at firstname.lastname@example.org or (601) 364-1042.