“We are on pace to exceed 36 million tons of timber harvested, which would be the highest level we have experienced this century, surpassing the previous high set in 2005 prior to the Great Recession,” said Eric McConnell, an associate professor of forest business at Mississippi State University.

The increased harvest helped Mississippi’s forestry industry remain in third place among the state’s agricultural commodities, with an estimated production value of $1.5 billion. That is a 9.6% increase from 2022.

Poultry and soybeans ranked first and second at an estimated production value of $3.1 billion and $1.6 billion, respectively.

Timber’s value of production is estimated based on monthly severance taxes collected by the Mississippi Department of Revenue. Final figures will be available in early 2024.

Homebuilding drives the consumption and production of softwood lumber and is one of the main economic indicators of the forestry industry.

“Rising interest rates push housing starts down, which has a negative impact on lumber price and quantity demand,” said John Auel, certification programs coordinator with the Mississippi Forestry Association and retired MSU Extension Service assistant professor of forestry. “If that trend continues, the effect would be felt next year in our markets with lower prices and reduced volumes harvested.”

Many economic analysts were warning of an imminent recession with lumber prices trending downward since July and a slowing demand for paper packaging, which is used for shipping products. However, there is cautious optimism after a Federal Reserve Board announcement in mid-December.

“Housing starts were predicted to hold steady at 1.4 million or even decline slightly in 2024. But the news on December 13 that the U.S. Federal Reserve plans three interest rate cuts in 2024 is good news for homebuilding,” he said.

Another bright spot for Mississippi’s industry is the opening of new mills over the last few years, which has added 1.3 billion board feet of pine lumber capacity to the state’s sawmill industry. Once these mills reach full production, Mississippi will see pine production increase from 1.5 billion board feet per year to 2.5 billion board feet per year.

Huber Engineered Woods has announced plans to build an oriented strand board mill in Shuqualak, and SDI Biocarbon Solutions intends to build a biochar facility in Columbus. Enviva is back online in Amory after the March 24 tornado damaged the facility. Enviva is also opening another wood pellet mill in Epes, Alabama.

“Huber’s announcement is welcome news for northeast Mississippi’s pulpwood market,” McConnell said. “SDI will produce feedstock for the new Steel Dynamics aluminum mill in the Golden Triangle, which is part of the largest total industrial investment in state history. Wood pellets is another industry that we are seeing locate in Mississippi or nearby where Mississippi-owned wood will figure prominently in mill supply.”

Drought conditions across the state have slowed growth and caused some tree death. Newly replanted stands and young stands have seen the highest death rates.

“Mortality rates exceeding two-thirds have been reported in some replanted stands,” McConnell said. “Young stands suffered from 40 to 60% mortality. Stands at and around thinning age were observed to have mortality in the 10 to 15% range. In mature stands, many of the trees were likely losing vigor because of competition for resources, and weather extremes may have accelerated the process.”

While drought caused most of the tree death that people are seeing in the state, foresters have seen an increase in Ips beetles and pockets of severe damage from them. In Mississippi, there are five species of pine bark beetles that attack pines. Three of them are Ips beetles. All five species are always present, but Ips are of special concern for drought-stressed trees.

“We haven’t seen this much activity from Ips beetles since 2005,” said Butch Bailey, a forester with the MSU Extension Service. “Overall, the damage this year has been scattered and light in most places, even though the damage is much more than in typical years. However, for landowners near our National Forests, the damage has sometimes been severe.

“The good news is that while Ips can cause a lot of damage, they’re not as bad as the southern pine beetle species. And we aren’t seeing a huge amount of southern pine beetles,” he said.

Ips activity is typically highest in November and should lessen as temperatures drop and available groundwater increases into the winter. Conditions are conducive to heavy beetle activity in 2024. Trap counts by the Mississippi Forestry Commission and the U.S. Forest Service will help give a clearer picture of what infestation levels landowners may see.

“All timberland owners can rest easy for now, but I’d be sure to watch my pine stands closely as temperatures warm up in late February and into the spring,” Bailey said.

Curtis VanderSchaaf, Extension forestry specialist, said climatologists predict a wet winter, which should help alleviate the stress on trees.

“Landowners will likely continue to see trees die over at least the next year,” he said. “Hopefully, this expected rainfall will provide some soil moisture recharge, which will help reduce the negative impacts from this year’s drought.

“For pine, at least, we have an overabundance of supply and not enough demand for wood. Thus, some mortality will likely not greatly impact long-term timber supply. Beyond that, many landowners who had reforestation issues during the winter of 2022-2023, but who were part of cost-share programs, will likely receive further assistance this winter to reforest their property,” VanderSchaaf said.

In addition to input costs such as diesel fuel, equipment, labor and insurance, the geopolitical climate is causing concern in the industry. As construction around the world increases after the pandemic, several factors are putting pressure on the industry, McConnell said.

“The Canadian wildfires have softwood lumber traders concerned with the Canadian industry’s ability to help meet U.S. softwood lumber demand,” he said. “Trade sanctions on Russian softwood lumber by western countries were expected to be buffered by Chinese purchasing, but this did not occur because China’s economy slowed. Russia is the world leader in softwood lumber exports. How the war and inability to move lumber globally impacts the Russian economy and ultimately, its populace, is unclear.”

Source: msstate.edu