New home starts boost 2015 forest products value

By Susan Collins-Smith
MSU Extension Service

STARKVILLE, Miss. — An uptick in new home construction lifted the 2015 year-end value of Mississippi’s timber harvest.

James Henderson, associate forestry professor with the Mississippi State University Extension Service, said preliminary figures indicate that this year’s harvest of forest products is valued at $1.16 billion, an increase of 13.4 percent over the harvest value in 2014.

“Continued improvement in the U.S. economy has benefited the housing market, which has been the biggest influence on the rise in value of forest products,” Henderson said. “As of October, housing starts have more than doubled from the record low following the Great Recession of 2007-2009.”

U.S. South, the largest lumber distributor to Southeastern and Mid-Atlantic states, has ramped up production by almost 70 percent since 2011 to meet the demand. As a result of rising demand, pine sawtimber prices increased each quarter of 2015, to their highest point since 2011, Henderson said.

By the third quarter of 2015, pine sawtimber, also called pine stumpage, was selling for an average of $25.82 per ton statewide. This price represents an increase of almost 20 percent since the third quarter of 2011, when pine sawtimber sold for $21.55 per ton.

With more markets in the southern half of the state, landowners south of Interstate 20 get more for their timber than landowners north of that dividing line, Henderson said.

“Pine sawtimber prices were nearly 12 percent higher in south Mississippi as compared with the northern part of the state,” Henderson said.

The third-quarter price for pine sawtimber in north Mississippi was $24.38 per ton. In south Mississippi, the price was $27.26 per ton for the same quarter.

The price landowners actually receive varies from the average considerably, depending on timber quality, the number of acres harvested, distance to the lumber mill, the number of other timber sales in the area, and how badly the mill needs timber, Henderson said.

Since International Paper in Courtland, Alabama, closed in 2014, there is an even greater gap in pulpwood prices. For the third quarter of 2015, pulpwood sold for an average of $4.92 per ton in north Mississippi and $9 per ton in south Mississippi.

Steve Prestridge, vice president and timberlands manager for Barge Timberland Management in Macon, said the plant closure caused a ripple effect for growers in the northern part of the state.

“That had more influence on our pulpwood market than anything,” he said. “Markets are our biggest concern right now. We just don’t have enough pulpwood or chip-n-saw markets for north Mississippi growers.”

However, Barge Forest Products Co., which is an associated company of Barge Timberland Management, owns a sawmill in Macon, which provides a good market for high-grade pine sawtimber.

“We’re not a big player in the markets that buy the younger growth timber, which is a large portion of the markets in south Mississippi,” said Prestridge, who worked as a procurement forester in the Monticello area until seven years ago. “Our clients in this area sell older timber, which is a different product class. It’s a very localized market and gives them a longer growth increment.”

North Mississippi landowners may see more market opportunities when Winston Plywood opens in Louisville. Increased investment along the Grenada railway could also enhance the wood products market.

“The lower prices, lack of competition and a 15-year commitment by Iowa Pacific to operate the rail line should result in some development of the north Mississippi market for both sawtimber and pulpwood,” Henderson said.

Forest products rank No. 2 among the state’s commodities. Poultry remains No. 1 with an estimated $3.22 billion value for 2015. Final figures will be released in February 2016 when more complete data is available.