Forestry, Wildlife & Fisheries News
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Forestry Continues Decline In ValueBy Bonnie Coblentz MISSISSIPPI STATE -- Mississippi's timber industry took another hit in 2000 as prices and harvests continued to decline, giving the industry a lower value than last year. Mississippi's timber harvest is estimated at $1.26 billion, a 1.3 percent decline from 1999. This value makes forestry the state's No. 2 crop in market value, behind poultry. "This is the second small decline in timber harvest value since we set an all-time record high in 1998 of $1.36 billion," said Bob Daniels, forestry specialist with Mississippi State University's Extension Service. Daniels attributed the decrease to reduced harvests, lower prices and changing markets. "The story for Mississippi's timber in 2000 revolves around changing markets," Daniels said. "The solid wood products markets such as lumber and plywood that use pine sawlogs began the year well, but pine lumber markets began to weaken in the first quarter. By summer, an overproduction of southern pine lumber and abundant Canadian imports left southern pine lumber too plentiful and overpriced." Mills began to limit log purchases and the prices they were willing to pay. Pulpwood supplies outstripped demand and prices weakened in this market, too. These factors accounted for another small decline in the value of Mississippi's timber harvest. Industry reorganization also affected timber prices and harvest this year. "The forest products industry has been reorganizing through consolidation and mergers for the past two years," Daniels said. "Mississippi was not impacted by these organizational changes much until 2000, but as a result of the mergers and acquisitions, some mills were idled or put up for sale in the second half of the year. This will continue into 2001." During 2000, timber harvest volumes declined about 2 percent, but probably the biggest change came in prices. Pine and oak sawlog prices at the mill were down 1 percent from 1999 and mixed hardwood sawlog prices dropped 9 percent. Delivered pulpwood prices averaged 8 percent lower than last year. "Sawlog markets were better than pulpwood markets, but both saw downward price pressure. The best market this year was hardwood sawlogs," Daniels said. Standing timber prices were hit worse, especially late in the year with pine and hardwood pulpwood down 18 and 16 percent respectively. Next year's timber outlook is unclear. Daniels said the forest industry's continued reorganization will cause some structural changes in Mississippi's industry. Housing markets should be respectable and the paper industry steady in 2000. The lumber industry, however, will be affected by the expiration in March of the Softwood Lumber Agreement, which governs Canadian softwood lumber imports to the United States. "The pending expiration of this agreement should make southern pine lumber markets weak in the first half of the year, but improving paper markets and a projected softwood lumber demand only 2 percent below 1999's record-high demand promises to strengthen the industry if the lumber agreement is renewed," Daniels said. "Settling the Softwood Lumber Agreement would help the market greatly." The drought was not a big economic factor in this year's timber value, but the whole tale has not yet been told on this summer. "The drought contributed to the oversupply of pine lumber because dry conditions made logging easy," Daniels said. "Hardwood were affected by the drought, too. In northern Mississippi, there was noticeable browning of hardwoods this summer, but the effects of a drought are often long-term. We'll have to wait until the spring to see if these trees leaf out, and we won't know until then what kind of mortality we had in our hardwood forests." Often outbreaks of Southern pine beetles accompany a drought, but these did not materialize this year. However, south Mississippi did see noticeable pine mortality from the Ips beetle, a lesser pine pest. Released:
Dec. 18, 2000 |
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