What is in this article?:
- Mississippi timber outlook dimmed by housing depression
- Many producers continue holding timber
With the U.S. housing market continuing in the doldrums, the outlook for demand and price improvement for Mississippi timber producers “is likely to be dismal for some time,” says James Henderson, assistant Extension professor for forest economics and management at Mississippi State University.
With the U.S. housing market continuing in the doldrums, the outlook for demand and price improvement for Mississippi timber producers “is likely to be dismal for some time,” says James Henderson.
“We need to see a rebound in housing demand, but industry projections are that it will be 2014 to 2016 before that occurs,” the Mississippi State University assistant Extension professor for forest economics and management said at the Mississippi Farm Bureau Federation’s Winter Commodity Conference at Jackson.
“Near term, there’s no indication of any huge resumption in demand for building materials, and the negative implication of that outlook for saw timber prices is clear.”
Construction trends are also changing, Henderson says. “Fewer single family houses are being built; instead, there are more multi-family rental properties, and these use a smaller amount of wood per family unit.”There are enough existing homes for sale on the market to act as an ongoing depressant for new home construction, he notes.
“The government assistance program for home buyers in 2009 helped bring down the inventory, but when it expired there was a wave of foreclosures and the inventory rose again. With a loss of 8 million private sector jobs, there was another round of foreclosures because unemployed people couldn’t pay their mortgages.”
Foreclosures are expected to continue at high levels in 2011.
Although the employment picture is improving marginally, Henderson says “we still have a ways to go to make up for 8 million lost jobs, and that will continue to be a drag on the housing market and U.S. and southern lumber production.”