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Housing starts help fall timber markets
MISSISSIPPI STATE -- Strong nationwide housing starts are helping the timber markets buck late summer traditions and remain strong heading into the fall months.
Bob Daniels, forestry specialist with the Mississippi State University Extension Service, said prices normally are lowest during the driest months when timber is most accessible for harvest.
"Housing construction is what is really driving timber prices. A consistently strong housing market through June helped continue a strong lumber market," Daniels said. "Housing starts are running about 2.6 percent ahead of the same period last year."
Mississippi produces Southern pine lumber and structural panels for housing construction. Decks and other outdoor building projects also require treated Southern pine. Demand for Mississippi hardwood lumber in furniture, flooring, cabinets and decorative panels depends on housing starts. Hardwood is also used for pallets, railroad ties and other industrial needs.
Terry Reynolds, co-owner of Louisville-based Rives and Reynolds Lumber Co. Inc., said there are clear signs of an improving economy as the demand for lumber continues even as supplies increase.
"We've been playing catch-up since hardwood lumber supplies were emptied in 2003," Reynolds said. "We are just now beginning to replenish the pipeline, and the economy has picked back up. In addition to housing starts in general, the market for hardwood flooring and kitchen cabinets is also contributing to help business."
Reynolds said he has a tendency to watch over his shoulder for bad news, but he is generally optimistic about the future, barring unforeseeable circumstances.
"Fuel, labor and insurance costs are all up, but we've increased our productivity. New technologies have helped us increase our efficiency," Reynolds said. "Our per-unit (1,000 board feet) cost is probably less than 10 years ago."
Daniels said the use of new technologies has helped Mississippi's production remain fairly consistent despite the closing of some sawmills in recent years.
"One example of new ways pine mills have increased production of lumber is the use of curved sawing technology," Daniels said. "Innovations like this allow producers to get more lumber out of an average log."
Daniels said he is optimistic about timber markets for the next few months.
"The general economy is expected to continue to grow through the rest of the year. Timber markets should continue to be firm," Daniels said. "Landowners with good stands of pine and hardwood sawtimber, especially oak, should find favorable markets from now through the fall."