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Timber industry begins to stabilize
MISSISSIPPI STATE -- The predicted 1.2 percent decrease in value of Mississippi's timber harvest may represent a turn towards better conditions in the next few years.
Agricultural economists and forestry specialists with Mississippi State University's Extension Service are predicting the value of Mississippi's 2002 timber harvest at $1.06 billion, compared to 2001's value of almost $1.08 billion.
Bob Daniels, Extension forestry specialist, said the value of the 2001 harvest represented a 17 percent decrease from the previous year, rather than the expected 10 percent decrease. With harvest volume down 17 percent, 2001 turned out to be a very difficult year for the forest products business.
"It was good to see some stabilization in 2002, even if the estimated value is still lower than in 2001," Daniels said. "Signs for the timber industry in the second half of the year are better in some sectors than they were this time last year."
Daniels noted that total harvested volume in Mississippi was about 3 percent higher in 2002, but prices for pine sawlogs -- Mississippi's most important product -- were about 5 percent lower than in 2001.
"Since pine log values comprise 60 percent of the timber harvest value, the price decrease helped cause harvest values to fall," he said.
Daniels said pine log prices have fallen in response to the falling Southern pine lumber prices in 2002. Southern pine lumber prices are down 8 to 10 percent despite a good housing market and low interest rates. Southern pine lumber producers still blame too much imported Canadian lumber as a big problem, even as negotiations with Canada continue.
The housing market did help hardwood enterprises, including solid wood flooring and cabinet sales, both up about 11 percent in June, compared to the previous year.
"In 2002, Mississippi hardwood delivered log prices were steady to about 1 percent higher. A steady year is good news for an industry that has seen 18 months of below par business," Daniels said. "While most hardwood users started 2002 slow with talk of a recession, the second half of the year provided some improvement and room for optimism."
Daniels said the U.S. paper industry continued consolidating and balancing production with demand in 2002.
"In Mississippi, pulpwood remains a buyers' market. Prices remained steady for pine and hardwood pulpwood in 2002, but pine pulpwood prices moved up a bit at the end of 2002," he said. "In some areas of the state, demand is so low that it is still hard to find people willing to thin pine plantations for the first time."