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Post-Katrina timber? $1.1 billion in costs, lost dreams

It can be hard to envision the impact to timber owners and the ripple impact in the economy from the loss of $1.1 billion worth of timber in Mississippi due to Hurricane Katrina.

An estimated 50,000 to 60,000 landowners received some type of damage to their property. For many, the trees represented their nest egg they had planned to help fund college tuition, retirement income and other needs.

The Mississippi Department of Agriculture and Commerce doesn’t even cover forestry. Still, the office received more than 300 calls in their office from distressed landowners.

“A lot of people had almost 100% wipe out,” said Agriculture Commissioner Lester Spell. “Over the years, that is what many people have been investing in. Those trees represented their life savings, and it is gone. We saw more people lose potential income and what was a reasonable degree of wealth in the timber industry than any other industry.”

While there are some government programs to assist with clearing debris and replanting, there aren’t any government programs that compensate people for the losses they sustained in timber. If someone had pine timber 25 to 30 years old, it could have been worth $2,500 per acre. Someone with 100 acres might have lost $250,000.

“Some people who called us were crying, ‘Will you help us get some money for timber we lost?’” Spell said. “A lot of people had the exact same story. I think a big challenge to the state is going to be encouraging the cleanup and replanting of those forests. It is going to be so important.”

Spell said timber producers need not overlook the Gulf Opportunity Zone. The federal GO Zone Act provides tax incentives that could be used to help with new equipment and rebuilding.

Kent Grizzard, public relations director for the Mississippi Forestry Commission, said it was more than dollars and cents that went down with the Katrina felled timber.

“For people who owned the timber, it was their dream of the future to pay college tuition for children and grandchildren, and to provide supplemental retirement income,” Grizzard said. “All of those dreams have been drastically altered by this hurricane. So when we talk about the impact of Hurricane Katrina on tree farmers in the state, it is more than just financial impact.”

After the disaster, the forestry community feared that Washington would not be able to look north of Interstate 10. But Grizzard said one success story is that the federal government did approve some financial assistance for cleanup and replanting.

“A success story that came out of the Katrina disaster is that on a national level, for the first time in history some forestry-based disaster relief programs were approved,” Grizzard said. “In the agriculture community, crop disaster programs are common. But we never had anything for forestry. We think it has to do with forestry being a long-term investment. It is harder to get a governmental commitment on long-term investment as opposed to short-term like row crops and vegetable growers.”

There are concerns some landowners may not want to go through the expense of reforesting their land all over again because of fears another hurricane will come and blow the trees down.

“That is why it is important to keep pursuing Washington to provide some financial assistance to help landowners recover from hurricanes,” Grizzard said. “In Mississippi, 75% of the forest land is owned by private individuals. They are actually producing the forest resources that are being used in rebuilding the whole Gulf Coast region. It is important landowners have some confidence in the future that there will be something in place that will help them if a disaster causes a loss to the timber they are managing.”

Programs that will help include the Emergency Watershed Protection Program of the Natural Resource Conservation Service, and the Farm Service Agency Emergency Conservation Program and Emergency Forestry Conservation Reserve Program. While funding is in place, rules are still being developed.

Timber salvage operations began soon after the storm, and with so much timber on the market, prices plummeted.
“When you have a huge storm like this, there is so much timber people are trying to salvage before it rots that the price for timber begins to drop drastically,” Grizzard said. “Timber prices especially in South Mississippi and Louisiana went way down. Historically, we know following a large-scale disaster like this, it takes a year to a year-and-a-half following the hurricane for prices to recover. In Mississippi, forestry is a big percentage of the economy. We know the value of timber will recover. It will just take time.”

After the hurricane, 26 wet storage yards were established where logs were stacked and saturated with water to prevent deterioration until the logs can be processed.

“Lots of logs have been banked that can be used as much as a year later,” said Mississippi State University Extension forester Dr. Bob Daniels. “Even before Katrina hit, it was a buyer’s market for pulpwood down there. There is an oversupply of pulpwood. Three pulpwood mills have closed in the past three years.”

Daniels said pulpwood has never been thought of as a priority salvage item. The first emphasis is on pine saw logs because they have the highest value. Second is pine pulpwood, and then hardwood.

It is estimated that as much as half of the logging force available has been working on disaster cleanup. That leaves fewer loggers to salvage downed timber.

“Because of the limited logging force, we don’t know how much we are going to salvage,” Daniels said. “There is a lot of frustration on behalf of the wood dealers and land owners. They are trying to salvage what they can, but mills are limited in what they can use.”

Contact MBJ contributing writer Becky Gillette at bgillette@bellsouth.net.

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