Solid prices, beetles prompting timber owners to harvest
by MBJ Staff
Published: July 12,2012
ACROSS MISSISSIPPI — Landowners debating the timing for their next timber sale should send trees to the market sooner, rather than later.
James Henderson, assistant forestry professor with Mississippi State University’s Extension Service, said increases in housing starts are contributing to gradual timber price improvements, but better reasons to harvest could be related to insects and taxes.
“Southern pine beetle activity in southwest Mississippi introduces an element of risk to landowners. Thinning on time is always the recommendation, but the recent threats from these beetles make it even more important,” he said.
Landowners often hesitate to thin stands because they do not like pulpwood prices, but Henderson describes that issue as “small potatoes” in the big picture.
“When you delay thinning over a couple dollars a ton, you delay the final harvest of the sawtimber product, which is where the big payoff is. Delaying reduces the value of your investment, and you risk losing the entire investment because of the threat from Southern pine beetles,” he said.
Another factor to encourage landowners to sell trees this year is the approaching end of the 15 percent long-term capital gains tax rate, which could increase to 20 percent if Congress does not extend the lower rate through 2013.
The recent market price increase reflects an improvement in the home construction sector.
“New home construction has increased 25 percent, and permits are up by 28.5 percent during the past year,” he said. “These increases are the best news we have had since 2006 when the housing market started its collapse.”
Henderson said pine sawtimber and chip-n-saw prices have increased modestly since the summer of 2011. Dry conditions open up a lot of timberland and that has kept the market from going up more.
Andy Londo, an Extension and research professor in MSU’s Forest and Wildlife Research Center, said the long-overdue Southern pine beetles are causing damage in the Homochitto National Forest in southwest Mississippi.
“Mississippi loses trees every year to Ips beetles, but we’ve had very little activity from Southern pine beetles in recent years,” he said. “Southern pine beetles have the potential to be much more damaging than Ips because of how their damage spreads. Ips may impact a spot of 20 trees or so and stop, but Southern pine beetle damage expands to encompass thousands of acres.”
Trees that are stressed from conditions such as drought or lightning damage are at a greater risk of beetle attack.
Londo said control of Southern pine beetles begins with identifying the infestation’s origin and determining the direction the beetles are moving.
“We recommend removing a buffer of trees — as wide as trees are tall — around the advancing head of the spot to stop its spread. It is better to cut too much than try to salvage later. Ips infestations typically do not require removal to stop spreads,” he said.
Londo encouraged landowners to thin stands that are ready to thin, especially in the southwest portion of the state.
“Thinning is the best way to avoid beetle damage because it helps keep trees healthier,” he said.
To sign up for Mississippi Business Daily Updates, click here.
Top Posts & Pages
- BILL CRAWFORD: Dan Jones not the angel he is portrayed to be
- JOSH MABUS: Bill Murray and business misfits
- The Dan Jones-IHL saga: Is this the story that started it all?
- Analysis: Closed meetings can feed false public impressions
- Email from Nash to Delta Council’s Morgan included in DHA court file
- DAVID DALLAS — From Dan and Dixie with love
- Bill would use casino taxes for bridges, little for tourism
- Suit against Kemper employee Brett Wingo is dismissed
- Statue depicts famous duel that originated 'Bowie knife'