Mississippi Timber Price Report

May/June 2000
Timber Market Comments

 

Sawtimber

An extended period of dry weather statewide has made logging easy and created an oversupply of timber. Summer is usually a slow season for timber sales anyway but the current timber market is especially sluggish.

The brightest spot in the timber market is oak sawtimber. Extra dry conditions mean loggers have access to trees located in some of the wettest areas of the state that are normally difficult to reach. That's where some of the best hardwood timber grows. The oak log market is good right now to take advantage of that. For landowners with good quality oak to sell the market is there. Red Oak logs have averaged around $370 per thousand board feet which is about 25% higher than six months ago. Some prices for the best grade have been as high as $450.

The pine sawtimber market has been steady around $430 to $450 per thousand board feet, statewide. But sales volume seems low. Many consultants report that most large tracts of quality timber are being held off the market for a better market this fall. This is especially true in southeast and central Mississippi. In that area a large volume of industrial timber in the market has caused an additional oversupply.

Most contacts report that pine sawmills have plenty of logs. Quotas are common. Lumber is reported to be moving in the markets but prices have been trending lower for months. Competition from Canadian and West Coast lumber have kept pine lumber prices retreating. Some mills have taken downtime to relieve the production pressure. If the normal lumber price cycle for the past few years holds we should be near the bottom for prices and begin a run up of price as we head toward the end of the year.

There was one report of a spruce pine sale at $300/MBF in central Mississippi and one for $350/MBF in south Mississippi. There was one report of cypress stumpage for $200/MBF in the Delta.

Pine pole sales were more active in May/June in south Mississippi with poles selling in the range of $500 to $590/MBF.

 

Pulpwood

The pulpwood market remains sluggish despite overall improving paper industry production levels. The dry weather is affecting pulpwood too. Pulp mills are only buying the wood needed immediately so inventory backs up in the woods.

The best pine pulpwood market right now appears to be north Mississippi. Foresters in north Mississippi seems to be able to get pine plantations thinned and prices are in the high side of today's depressed range. Central and south Mississippi markets were described by contacts as "dead". Once contact said that "It's hard to give pine pulpwood away these days." Many reporters in central and south Mississippi remarked that the pine pulpwood market to Alabama and southeast Mississippi was oversupplied with pine pulpwood from large landholding in Alabama that are being harvested. They complained that they could not interest mills in wood from pine plantations that need thinning. Many said their landowners were frustrated with the situation. If landowners who want to thin their pine plantations are having difficulty finding a market they may just have to wait out the oversupply.

Some other situations are impacting the pulpwood markets in Mississippi these days as well. Mergers, acquisitions and rearrangements by various forest industry firms are changing Mississippi'' forest industry and many organizations are trying to sort out the new arrangements. The International Paper/Champion International merger impacts Mississippi because IP is a prominent firm in south Mississippi and Champion's Courtland, AL mill buys wood in northeast Mississippi. IP's Natchez paper mill has been put up for sale. Georgia Pacific is buying Fort James, Bowaters is buying Newsprint South and the Timber Company, the land management subsidiary of Georgia Pacific will be purchased by Plum Creek Timber Co.. All of these changes may be unsettling to landowners but markets for timber should remain competitive when the dust from these changes settles. According to Forest Service projections of US timber demands published this month the demand for Mississippi's timber resources will remain positive out to the year 2050.

Prices for pine pulpwood are between seven and ten dollars per ton which is 15% less than six months ago. Over the same period, hardwood pulpwood prices have dropped about 10% to six to seven dollars per ton. Hardwood pulpwood is moving better than pine, but both are sluggish.

 

Other Comments

A look at timber severance tax collections through June, 2000 suggests that timber harvest volumes are about 95% of last year at this time but May/June have been much slower months. March/April ran ahead of last year but figures suggest a significant slow down in May/June.

Industry contacts reveal that many mills have little timber bought for winter and this is an opportunity for landowners. The fall market should be better as mills buy timber to last through the normal rainy season. Most mills are only buying timber as they need it so they don't have a lot of standing inventory. That should set up conditions for a better fall market.

Anytime we get extended dry periods, southern pine beetle becomes a threat. Despite some Alabama counties with epidemic levels of southern pine beetle, Mississippi has not had any serious outbreaks yet. No significant Southern Pine Beetle activity was reported in May/June but some activity was noted in east central Mississippi along the Alabama line from Kemper to Wayne counties. Some activity was also noted by reporters in extreme southwest Mississippi.

A drought map for July, shows the status of the drought in the nation. It shows the most severely dry areas in Alabama, Mississippi and Georgia. With these kinds of dry conditions, we expect to see southern pine beetle problems. Timber owners should stay on guard for beetle problems.

Would you like to receive Mississippi Timber Price Report (MTPR) information by E-mail? If you would like to receive a short version of the MTPR to your E-mail box send a message requesting this to the following address: Bob Daniels. We'll use your requests to create a distribution list to send this information to you.

View the Standing and Delivered prices for May/June 2000.

As always, your comments, pros and cons are welcome.

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