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.
Many producers continue holding timber
From 1994-2006, Mississippi’s timber growing stock increased by 23 percent, he says; but with mills consuming less “a lot of people are holding timber. There is a lot of supply building up, and saw timber prices are going to be depressed for some time.”
In 2008, demand for pulpwood “was like turning off a faucet,” Henderson says. “Nobody wanted it. There was a bit of a price spike in the very wet winter of 2009-10, when mills ran low on inventory. But once inventory was rebuilt prices fell again.“We’re now starting to see some price improvement as more goods are being produced, and there could be some improvement in demand for this sector over the next couple of years.”
From 2004 to the fourth quarter of 2010, pine stumpage prices have dropped from $49 per ton to a new low of $25.88.“Everything is tied to home construction,” Henderson says. “In 2006, home building volume was 2 million per year. By the spring of 2009, that had dropped by 80 percent tothe lowest level since 1959.
“Typically at the end of a recession housing construction picks up almost as sharply as it fell. In the most recent recession, we’re not seeing that resumption — housing starts are just bouncing around in the 500,000 to 600,00 range, and that’s not good for the timber industry.