April 2012-Timber Market Update
April 2012
Timber Market Update
by Dr. James Henderson, Extension Forestry
It appears that the long awaited recovery in U.S. home construction is finally underway. Building permits for March are up to 747 thousand (Figure 1). That's a 30% increase from a year ago. Home construction volume should gradually increase this summer, which will increase lumber production across Mississippi, resulting in increased consumption of timber products. Stumpage prices for Mississippi as reported by Forest2Market, while at historically low levels, are beginning to show improvement. Pine sawtimber prices for the first quarter of 2012 reached $27.33 per ton rising for the third consecutive quarter. Fluctuations in timber prices will continue; however, given the recent promising rise in building permits (the highest since 2008), pine sawtimber prices should continue to show signs of improvement. Another positive indicator of increased demand for Mississippi timber is the current volume of homes available for sale. Both new and existing homes are at 6-month supply levels, which is generally considered to be characteristic of a "healthy" housing market. That volume reached 12-month supply levels during the recession. Mortgage rates remain at record lows and financing availability is improving as mortgages are being bundled and sold to investors again. So, conditions for seeing improvement in home construction are the most favorable we have seen since the recession.
Print advertising expenditures in the U.S. have fallen to the lowest levels since the late 1980s. This results from a combination of the lingering impacts of the recession and greater use of internet advertising. However, the paper sector is expanding production as the economy is growing, albeit modestly, which should help boost pulpwood demand in the months to come. Pulpwood prices for both pine and hardwood for the first quarter 2012 were $7.37 and $5.79, respectively.
News
RAYMOND, Miss. -- Mississippi’s 2023 timber harvest is expected to set a record for the 21st century. “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.
RAYMOND, Miss. -- An increase in both the amount of timber harvested and delivered wood prices landed Mississippi’s forestry industry in third place among the state’s agricultural commodities. At an estimated production value of $1.3 billion, timber is up 15% from 2021. Poultry and soybeans ranked first and second, generating an estimated value of $3.8 billion and $1.8 billion, respectively, in 2022.