MISSISSIPPI STATE -- The combined influences of a poor housing market and lingering effects of Hurricane Katrina kept the timber industry down in Mississippi, with the estimated value of forestry falling more than 8 percent to $1.1 billion in 2007.

In 2005, the year Katrina hit, the state posted a record-high forestry value of $1.4 billion. That value dropped to $1.2 billion in 2006 before falling further the next year. Despite the declines, timber retains its place as Mississippi's No. 2 agricultural commodity, behind poultry.

“The Mississippi timber economy is continuing its downward trend,” said Marc Measells, a forestry researcher with the Mississippi State University College of Forest Resources. “Salvaged timber from Hurricane Katrina, which had been kept in wet storage, impacted markets the first quarters of the year, and the drought conditions across much of the state and the worst housing market in 16 years has further hindered prices in the industry.”

Measells said the timber salvaged and stored after the hurricane was almost used up in 2007 as the housing market continued its slump.

“The housing market has to turn around to get timber prices back up,” he said. “Historically, the timber and forest industry economic outlooks lag behind the housing market. Once that market starts to increase, timber markets will move back up within a few months to a year.”

Glenn Hughes, Extension forestry professor with the Coastal Research and Extension Center in Biloxi, said timber owners may wait a while for the housing industry to improve.

“They're not predicting an uptick until 2009,” Hughes said. “It's caught us at a terrible time. We're coming out of the salvage business after Katrina, and people do have timber, but the market is really not great.”

Hughes said larger timber can be “banked on the stump,” or not harvested until prices improve.

“The trees are going to grow and result in maybe a 5 percent gain every year. Some people are in a position to take advantage of that growth and are waiting to sell when the markets improve,” Hughes said.

Others are still struggling to get their timber acreage cleared and replanted.

“There was so much land that had to be salvaged that in some cases, there were not enough people to do all the site preparation and clean out all the debris that remained,” Hughes said. “It has prolonged our regeneration efforts by a year or two.”

Hughes said landowners waiting to replant are losing at least $50 per acre per year. Seedling supplies, which often run out by winter, ran out early this year as demand was strong in the state for the young trees. Longleaf pine has been in high demand as this species fared better than other varieties in the hurricane's winds.

“Landowners are not pleased with this situation, but there's not a lot that can be done,” he said.

Pine sawtimber and poles account for more than 60 percent of the state's timber value each year. In 2007, the stumpage price, which is the price the timber owner receives, for sawtimber averaged an estimated $312 per thousand board feet, down 24 percent from 2006 prices. The stumpage price for poles was $442 per thousand board feet, a 19 percent decrease from the previous year.

“It's still a good price, but not like it was in the late 1990s when prices were extremely high,” Measells said.

Hardwood prices varied in 2007, with mixed hardwood prices rising an estimated 6 percent to $224 per thousand board feet. Hardwood sawtimber prices dropped to $266 per thousand board feet, down 12 percent from 2006. Hardwood sawtimber makes up about 12 percent of the state's annual timber value.

Pine and hardwood pulpwood, which together account for about 25 percent of the state's timber value, both increased in 2007. By late 2007, pine pulpwood averaged $7.59 a ton, up 12 percent from 2006 levels, and hardwood pulpwood averaged $5.57 per ton, up 3 percent from the previous year.