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Timber prices, demand give rise to optimism

ACROSS MISSISSIPPI — After three years of depressed timber markets, prices are increasing because of strong demand for forest products and low inventories of logs following the year’s wettest months.

David Jones, assistant forest products professor with the Mississippi State University Extension Service, said the first half of 2010 showed a marked increase in demand for a number of forest products and price increases in most timber product categories.

“Many of the lumber and paper mills did not have enough logs to meet projected timber needs, let alone to respond to any increase in demand from improvements in the U.S. economy and the residential construction industry,” Jones said.

April and May provided drier conditions, allowing for increased timber harvesting. Jones said timber prices would decline as summer conditions improve timber availability.

“Mills usually keep a small surplus of products to allow for fluctuations in the market,” he said. “Because these inventories have been low to nonexistent, many of the hardwood mills have orders that they are unable to fill. This will lead to an increase in production for the near future and possibly into the third quarter of 2010.”

Jones said the recent price gains might continue as reduced logging capacity is still a major problem for hardwood sawmill owners and operators.

Jones said an added twist to the problems faced by mill owners and operators is the lack of trucks to deliver finished material to buyers. The general downturn in the economy has reduced the number of truck drivers, and tight credit is reducing the number of new drivers entering the profession.

James Henderson, assistant Extension forestry professor, said standing prices for hardwood sawtimber in the first quarter of 2010 increased 12 percent over the fourth quarter of 2009. Standing pulpwood prices increased 21 percent for pine and 59 percent for hardwood pulpwood over the fourth quarter of 2009.

Henderson said long-term improvement in Mississippi’s timber markets depends on growth in the national economy and the U.S. housing market.

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