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In Mississippi: Forest-based development important

Mississippi has benefited greatly from revenue generated from wood products in recent years, but to maximize forestry's future value, industry representatives are being encouraged not to rest on their laurels.

“The last few years have not been the booming market years the industry experienced in the 1990s, but landowners still can get a good return on their investments,” said Bob Daniels, forestry specialist with the Mississippi State University Extension Service. “But if we, as a state, want to see significant forest-based economic development in the future, we must track and recognize market trends and be ready to meet those trends as they come up.”

Daniels said attracting new mills and expanding existing mills are important to economic development, especially in rural areas that would have trouble attracting larger industries.

“Mississippi missed forest industry recruiting opportunities in the early 1990s when many mills for producing oriented strandboard were built in the United States,” Daniels said. “When the forestry industry was putting the largest amount of its investment capital into building oriented strandboard plants, the states that captured that mill investment were Georgia, the Carolinas and Virginia. In Mississippi, only one OSB mill was located near Grenada and later another near Guntown.”

Oriented strandboard, first produced in 1980, captured 25 percent of the structural panel market from plywood by 1990. A decade later, oriented strandboard had 51 percent of the market. As the production capacity for OSB was being built, Mississippi was largely on the sidelines, Daniels said.

Another forest-products opportunity Daniels sees on the economic development horizon is the production of engineered wood products. One example is wooden I-beams. Similar to steel beams, wooden I-beams are gaining in market popularity, especially for flooring in new house construction.

“These beams have to be made somewhere; it might as well be in Mississippi,” he said.

“Projections suggest demand for forest products will increase 23 percent over the next 40 years or so,” Daniels said. “This increase in demand means Mississippi's forests will be in demand. We must be proactive in looking for market opportunities.”

Agricultural economists and forestry specialists with MSU's Extension Service have estimated the value of Mississippi's 2002 timber harvest at $1.06 billion, compared to 2001's value of almost $1.08 billion. Daniels noted that Mississippi's timber harvest value is 44 percent higher than in 1990 when it was around $737 million.

“Mississippi saw great increases in timber value through the 1990s, with standing pine sawtimber prices more than doubling from about $200 per thousand board feet in 1990 to $441 in 1999,” Daniels said. “Pine sawtimber is now in the range of $380 to $400.”

Other wood markets that prospered in the 1990s have also dipped in recent years. Pine pulpwood that was $30 per cord in 1998 is now around $18 per cord. The downturn has resulted in the closing of or volume reduction in mills across Mississippi.

“As we look to the future, we should expect steady prices and solid demand for the timber we are growing,” Daniels said.

Linda Breazeale writes for MSU Ag Communications.

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