State loses one in 10 sawmills
by Wally Northway
Published: December 22,2009
ACROSS MISSISSIPPI — The overall value of Mississippi’s 2009 timber harvest failed to reach $1 billion for the first time in 16 years, but unlike other crops, extreme weather was not the reason, the Mississippi State Extension Center reports.
New housing starts dropped off sharply because of the current economic downturn. The decline in demand for lumber caused the 2009 timber harvest value to fall below the billion-dollar mark.
The estimated 2009 harvest value for timber is $817 million, down a steep 24 percent from 2008′s value of $1.08 billion.
“The number one wood product in Mississippi is saw-timber, which is used to manufacture building materials,” said forestry specialist James Henderson of the Extension Service. “With the decline in housing starts, there was a decline in lumber production that inevitably led to the decline in timber harvest value.”
When new construction falls off, many mills have no choice but to cut back production or lay off workers. Some went out of business.
“Many mills could not operate at capacity because the demand for lumber was running behind what they needed to cover production costs, overhead and salaries,” said David Jones, Extension forest products specialist. “The mills that stayed open had to run skeleton crews so they could minimize the cost of start-up when the market improves.”
Timber landowners could not find many mills in a good position to buy.
“At least 11 mills in Mississippi closed this year,” Jones said. “That’s 10 percent of the mills that were operating at the beginning of 2009. If people aren’t building houses, no one’s buying lumber.”
The forest industry has a significant impact on Mississippi’s economy, generating more than $17.4 billion and providing 18.5 percent of the state’s jobs. About 78 percent of Mississippi’s 18 million acres of forestland belongs to private, non-industrial owners. Timber companies own about 10 percent, and the remainder is public land managed by state and federal governments.
Lack of harvesting caused a decline in stumpage volume, which also affected the amount of severance taxes paid by landowners.
“It’s no surprise that stumpage volume for pine saw-timber is 27 percent below what it normally might be without the decline in housing starts,” Henderson said. “Severance tax collections are down considerably from last year, too.”
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