Forestry’s value up despite lack of home construction

ACROSS MISSISSIPPI — Timber industry observers say low national home construction levels and relatively dry weather resulted in a slightly lower year-end value for Mississippi forest products.

However, at an estimated $1.04 billion, the year-end value of the forest products fell less than 1 percent from last year.

James Henderson, assistant Extension Service professor of forestry at Mississippi State University, said the 2011 value is 19.7 percent above the $864 million figure in 2009, which was considered an exceptionally poor harvest year.

Henderson said the effects of the recession continue to keep demand for timber and prices low.

“Home construction in the U.S. has not increased much since the housing bubble burst in 2007,” he said.

He said 2010 pulpwood prices were exceptionally high due to low mill inventories and an unusually wet 2009-2010 winter.

The average 2011 timber product prices at the beginning of December were 8 percent lower for pine sawtimber, 58 percent lower for hardwood and 30 percent lower for pine pulpwood compared to 2010.

The ups and downs in prices and inventory have contributed to the closure of several mills, while others changed hands, said forestry professor David Jones.

“Currently, we have more than 100 sawmills, both hardwood and softwood, in the state. All of them are running below their capacity, but they are holding on, waiting for an economic recovery,” he said.

Jones said the current number of mills is about a third of what was operating in the 100s.

“When proposed mills related to the biofuels industry open there may be some impact on local markets, but for now, we’re watching the economy and anticipating it will continue its slow recovery,” Jones said.

The forest products industry is second only to poultry, which had an estimated year-end value of $2.44 billion.

Final agriculture commodity values will be released in February.

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