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The Fascicle

Welcome

Summer, 2005

fascicle [fássik´l]

1. bundle: a small bunch or bundle of something.
2. a quarterly electronic newsletter devoted to forestry in southeast Mississippi.

The Fascicle provides information useful to private landowners, Extension and agency professionals, professional foresters, and others interested in forestry. Items covered in this issue include:

  • MFC Reorganization
  • Hurricane Preparedness
  • Southern Pine Beetle Update
  • Mississippi Timber Markets Trend lower with the Season
  • Prescribed Burning Short Course Update
  • List of Upcoming Forestry Educational Programs

 

MFC Reorganization

The winds of changes are blowing at the Mississippi Forestry Commission (MFC), driven largely by budget reductions. The MFC suffered a 17.3% budget reduction effective July 1, 2005. This is resulting in significant changes as the MFC moves forward, although the scope of changes is not yet fully determined. An immediate change, effective July 1, is that the MFC has gone from six to four districts. The district offices in Philadelphia and Wiggins are being closed, and the district office in Bay Springs is assuming the majority of these counties. An external Advisory Committee has been formed to provide recommendations to the MFC as they enter a new and challenging period in their history.

The MFC is an important organization to landowners, the forest industry, and the state of Mississippi. The Commission provides fire protection, manages 16th section lands, oversees the Forest Resources Development Program that provides cost-share for replanting, and provides advice and information to landowners and the general public. The dedicated and professional staff at the MFC will continue to provide value to their clientele.

The mission of the MFC is "to provide leadership in forest protection, forest management & information about the forest of Mississippi, through a fully informed, well-trained work force and support staff, reflecting the needs of the public and employees." You can find out more about forestry and the Commission by visiting their Web site at http://www.mfc.state.ms.us/.

 

Hurricane Preparations

The year 2005 has been an active one for tropical storms. By July 5th we had four named storms, the earliest date this has occurred since we began keeping records. Cindy and Dennis recently visited Mississippi, dropping in excess of eight inches of rainfall in some areas. Hurricane Dennis came ashore just east of Pensacola, Florida, as a category 3 hurricane, but winds died rapidly as it moved inland. By all accounts, damage in Mississippi from Dennis has been minor.

If you have forestland affected by events such as Tropical Storms or Hurricanes, take some basic steps. First, save a newspaper showing the catastrophic event. Although you will remember the storm, the IRS agent reviewing your tax return may need a copy. Second, damage to forestland typically falls into the 1) Casualty Loss, or 2) Involuntary Conversion categories.

A Casualty Loss is a total loss of timber value caused by a sudden, unexpected, and unusual event from natural or other external forces. Examples are losses from hurricanes, tornados, floods, plane crashes, wildfires, hail, and ice storms. The loss is limited to the loss in fair market value or the basis in the property, whichever is lower.

If your timber is damaged, but not a total loss, you are required to reasonably try and salvage the timber. If you have sawtimber, and the timber is no longer merchantable as sawtimber, but can be used for pulpwood, the salvage requirement still holds. If, after subtracting sales expenses and the timber basis, you have a net gain, you are required to pay taxes on the gain. This is called a gain on an involuntary conversion since you had to convert the timber involuntarily from timber into money. It will be a capital gain if you have owned the timber at least a year and a day.

To avoid paying taxes, under IRS rules you can reinvest the total proceeds from the sale (not just the net gain) in qualified replacement property. Qualified replacement property would be investing in timber, timberland, reforestation costs, etc. Special rules do apply; the taxpayer must let the IRS know that he or she is electing to defer the gain on an involuntary conversion. He or she must explain the circumstances of the conversion (casualty or other loss and conversion) and what replacement property is to be acquired.

As always, seek professional guidance from a qualified accountant. In addition, if you inherited forestland, but do not have an accurate basis in your land and timber, now is the time to get one. A registered forester can do this. A list of registered foresters is available online at http://www.cfr.msstate.edu/borf/.

 

Southern Pine Beetle Update

It looks like the southern pine beetle (SPB) is making a comeback in Mississippi this year. The SPB is the most destructive insect of Southern pine forests. While other bark beetles can kill pines, the SPB is particularly dangerous because, in an outbreak, it can kill hundreds of acres of trees at a time. In 2000, more than 60,000 multiple-tree infestations were recorded across the South, resulting in millions of dollars in killed timber. Mississippi was fortunate to avoid significant damage during this outbreak.

In most years, SPB populations are at a relatively low level. Occasionally they reach outbreak, or epidemic status, and this is when the majority of the damage occurs. To help predict population trends, a South-wide Southern Pine Beetle Survey is conducted, coordinated by the Texas Forest Service.

To conduct the survey, each spring traps baited with the SPB attractant and southern pine turpentine are set out in pine forests when dogwoods begin to bloom.  Dogwood blooms mark the primary dispersal season for populations of the destructive SPB as well as certain beneficial insects.  The traps are monitored weekly for a four to six week period by federal and state cooperators.   Of particular value for forecasting purposes are catches of clerids (also called checkered beetles), known predators of SPB.   Using data on the average number of SPB captured per trap per day and the relative proportion of SPB to checkered beetles, infestation trends for the current year can be predicted.

In Mississippi, most traps are located on U.S. Forest Service land. The data predict the population 1) trend (declining, static, or increasing), and 2) level (low, moderate, high, or outbreak). For 2005, the average for Mississippi is an increasing population trend, with moderate to high SPB populations. Most survey areas showed an increase in the population trend, so landowners should monitor their land for any beetle activity and take appropriate action. Two counties, Oktibbeha and Winston Counties, were classified as having outbreaks of SPB, so landowners should be particularly wary in those areas.

There is no cost-effective way of "preventing" SPB attack. The best strategy for landowners is to maintain healthy trees, as bark beetles, including the SPB, generally attack trees with one or more stress factors. Some of the stress factors that can predispose trees to SPB attack include drought, lightning strikes, damage to the root system, and overly dense pines. One of the best ways to reduce stress is to thin pines when they need thinning.

Pines attacked by bark beetles should be removed to prevent spread to adjacent trees. With SPB, this includes cutting a buffer zone around the infected area, the width of which is the height of the average tree.

For more information on the SPB, visit the Southern Pine Beetle Internet Control Center at the following Web site: http://whizlab.isis.vt.edu/servlet/sf/spbicc/index.html.

 

Mississippi Timber Markets Trend lower with the Season

The following is a May 2005 summary of market comments from Dr. Bob Daniels. The full text is available at the following Web page: http://msucares.com/forestry/prices/commentary/index.html. Also, more information on Timber Price Reporting for Mississippi from Dr. Daniels is available at the following Web page: http://msucares.com/forestry/prices/index.html.

Standing timber prices have been trending lower from the high prices we saw in the December/January period. Pine Sawtimber prices statewide in the March/April period were 2% lower at $43.74/ton, down from $46.86/ton in November/December, 2004. Chip-N-Saw pine was up slightly at $24.72/ton, and Pine Pulpwood was 7% higher at $9.30/ton. Mixed Hardwood Sawtimber prices were down 8% at $22.96/ton. Hardwood pulpwood prices dropped 19% to $9/ton. Standing timber prices typically trend lower beginning at this time of year, bottom out in July and August then trend higher in the fall.

The economy remains in generally good shape. Energy prices are up and interest rates are rising slightly, but the housing industry remains solid.

When we think about the timber economy in Mississippi there are three sectors to remember: pine lumber and structural panels, hardwood lumber, and paper. By far, pine lumber and panels account for most activity, with products from pine sawlogs -- lumber, panels, and poles accounting for about 66% of Mississippi's annual timber harvest value.

The major markets for our pine lumber are new house construction, house repair/remodeling, and treated lumber. Softwood lumber demand should remain strong in 2005 as housing stays strong. Housing starts in March were at 1.5 million units and new housing permits above 2 million units. These levels should support a good pine lumber market as we get into the heart of building and remodeling season this summer.

A strong housing market also helps Mississippi's hardwood industry. Red oak lumber has declined in demand and price recently but comments in industry publications describe this as a measure to reduce lumber production to adjust the market. Hardwood lumber markets are expected to be good as the flooring, cabinets and millwork industries report strong market growth. Also, the pallet and railroad tie markets are expected to be very strong. The U.S. furniture market is suffering from imports, mostly from China.

The U.S. paper industry increased production 3.5% in 2004 and saw many price increases. The industry is cautiously optimistic for 2005, but cites rising oil prices, increasing interest rates, a weak dollar, and a slightly slower growing U.S. economy as negative influences.

All these conditions look generally positive for landowners. I think this will be a good year to make a timber sale. Housing starts have been strong for three or more years. Since housing is a cyclic business, a downturn is coming sometime. When it does, sawtimber prices will drop. The market is good now to sell. Pulpwood prices are good to get plantations thinned. Take your opportunity this year if you can.

 

Prescribed Burning Short Course Update

Prescribed burning is one of the best tools that forestry and natural resource managers have in the South. A number of landowners expressed interest in having this short course in the southern part of the state. In response to this demand, the next short course will be held from Sept. 12-15, 2005, at the Mississippi Gulf Coast Community College in Perkinston. To become a Certified Burn Manager, you must take a four day Prescribed Burning Short Course and pass an exam at the end of the course. For those not interested in becoming a Certified Burn Manager, taking the test is optional.

The registration fee for the Short Course is $395, and this includes materials, meals, and refreshments. The Coastal Plains Resource Conservation and Development (RC&D) Council has agreed to fund a limited number of scholarships to offset $200 of the cost. Scholarships will give priority to 1) landowners, and 2) consultants that work with landowners. We're excited about this, and thank RC&D for supporting this important effort.  

The easiest and fastest way to register is to go to the Continuing Education Web site for online registration. This is available at http://www.ce.msstate.edu/ptd/forest.html#prescribedshort. Alternatively, you can print out the registration form from the above Web site, fill it in, and either fax or mail it to Continuing Education. For a scholarship application, contact Continuing Education at (662) 325-7330.

If you are new to this course, and want to become a Certified Burn Manger, you will need to take a prerequisite that is provided by Mississippi State University FREE upon your registration in the MSU Prescribed Burning Short Course. This self-paced correspondence course provides an understanding of several topics that are a must for prescribed burning certification. Upon satisfactory completion, you will be ready to take the Prescribed Burning Short Course. Foresters will also receive 10 Category 5 CFEs. Be aware that the prerequisite material is quite detailed, and you will need a couple of weeks to digest and successfully complete the material.

Upcoming Short Course and Workshop Information:

A number of forestry workshops and short courses are scheduled for the Southeast MS. These are listed below. In addition you can find out about programs occurring statewide by going to the following Web site: http://msucares.com/forestry/education/short_course.pdf.

Covington County -- Topic: Tree Farm Workshop
Description: Tree Farms are recognized by the distinctive green and white diamond shaped signs. This workshop will review the Tree Farm program, recent changes, and benefits to private landowners in becoming a Certified Tree Farm.
Date: September 2, 2005 Time: 8:30 am -- 2:30 pm Cost: $10
Location: Covington County Multi-Purpose Bldg., Collins, MS
Contact: Carolyn Conger, Covington County Extension Director, 601-765-8252

George County -- Topic: Tree Farm Workshop
Description: Tree Farms are recognized by the distinctive green and white diamond shaped signs. This workshop will review the Tree Farm program, recent changes, and benefits to private landowners in becoming a Certified Tree Farm.
Date: September 9, 2005 Time: 8:30 am -- 2:30 pm Cost: $10
Location: TBA
Contact: Mike Steede, George County Extension Director, 601-947-4223

Wayne County -- Topic: Forestry for Baby Boomers Workshop
Description: We are in the midst of a huge generation shift in assets, including land, from the World War IIgeneration to the Baby Boomer generation. Boomers are not as connected to the land as their parents, and may not know what to do when they inherit or purchase forestland. This workshop is designed to help new or potential landowners with the basics of forestland management. The workshop includes indoor presentations and an afternoon field trip.
Date: September 22, 2005 Time: 8:30 am -- 2:30 pm Cost: $20
Location: TBA
Contact: Allen McReynolds, Wayne County Extension Director, 601-735-2243

Lamar County -- Topic: Forest Investment Analysis Shortcourse
Description: This shortcourse concentrates on the practices and procedures of forest investment analysis. Participants learn how to use investment calculations to aid decision-making in forestry. Topics include southern timber demand and outlook, investment analysis terms and basic formulas, and investment analysis computer programs.
Date: October 5, 2005 Time: 8:30 am -- 3:00 pm Cost: $35/person, $45/couple
Location: Lamar County Multi-Purpose Center, Purvis, MS
Contact: Clayton Rouse, Lamar County Extension Director, 601-794-3910

Stone County -- Topic: GPS Workshop
Description: Forest landowners and forestry professionals will benefit from this hands-on GPS workshop. We will introduce the basics of GPS, how it works, current applications, and potential for future use. We will conclude with a hands-on activity where participants use GPS receivers in the field.
Date: October 22, 2005 Time: 7:30 am -- 3:00 pm Cost: $20
Location: Dees Hall, Rm 207, MS Gulf Coast Community College, Perkinston, MS
Contact: Dr. Judith Breland, Stone County Extension Director, 601-928-5286

Jones County -- Topic: Timber Tax Fundamentals Shortcourse
Description: Many landowners pay more than their fair share of taxes on timber income. Knowing the tax laws applicable to forestland will help you to keep better records, plan forest management activities, and ultimately pay less in timber income taxes. This shortcourse is for the average forest landowner and features real-world examples to explain timber taxation.
Date: November 3, 2005 Time: 8:30 am- 3:00 pm Cost: $35/person, $45/couple
Location: Jones County Magnolia Center, Laurel, MS
Contact: Chuck Grantham, Jones County Extension Director, 601-428-5201

Greene County -- Topic: Timber Tax Fundamentals Shortcourse
Description: Many landowners pay more than their fair share of taxes on timber income. Knowing the tax laws applicable to forestland will help you to keep better records, plan forest management activities, and ultimately pay less in timber income taxes. This shortcourse is for the average forest landowner and features real-world examples to explain timber taxation.
Date: November 4, 2005 Time: 8:30 am- 3:00 pm Cost: $35/person, $45/couple
Location: Leakesville Community Center on "Center Street", Leakesville, MS
Contact: Mark Gillie, Greene County Extension Director, 601-394-2702

Kemper County -- Topic: Tree Farm Workshop
Description: Tree Farms are recognized by the distinctive green and white diamond shaped signs.
This workshop will review the Tree Farm program, recent changes, and benefits to private landowners in becoming a Certified Tree Farm.
Date: TBA Time: 8:30 am -- 2:30 pm Cost: $10
Location: Farmers Market Building, DeKalb, MS
Contact: Ruby Rankin, Kemper County Extension Director, 601-743-5112

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