THAT’S BUSINESS

Pine tree growers await turnaround in homebuilding industry

I am carefully making my way through vines with very sharp thorns as I inspect the pines along the creek. I am looking for signs of beaver damage.

Getting here is the problem.

There is no problem spotting the damage to some of the trees. Debarked trunks starting at ground level and rising 2 feet spell doom for trees whose circumference is surprisingly large - the size of a basketball - for these pines that were planted 15 years ago.

They are otherwise flourishing in the rich bottom land, more so than on the hillsides of the farm in central Mississippi.

They are not worth much just now. That’s for two reasons. One is that they will be culled, or thinned, for pulpwood, or small saw timber, to allow the other trees to grow to maturity.

But even so, they are biding their time for a better housing-construction market, which is showing signs of recovery.

Advice from a friend who has worked 40 years for a major timber company is to stay put.

We can justify thinning the crop, but at an unattractive price.

The statewide average in Mississippi was $26 a ton for pine saw timber at the end of the first quarter this year, compared with $49 a ton at the end of the first quarter of 2006, back before the housing market started its swoon.

In Arkansas, pine saw timber ranged from $45 to $50 a ton at the end of the first quarter of 2006, compared with $25 to $30 in the quarter that ended March 31.

Those are statewide averages. For small operators like our family, it’s far worse.

You take what you can get from local buyers. In our case, that’s about a third of the statewide rate.

So our family will deal with the beavers. We’ll contact the state and talk about its beaver-control program.

Still there are signs on the other end of the timber to construction line.

House prices are rising because the supply on the market is getting tighter. That can only mean that if the trend continues, there will be more of a need for building.

In Arkansas, according to CoreLogic, a national research company, house prices have risen 2.7 percent in the past 12 months. Nationally, prices have increased 10.5 percent.

So the little guys wait.

And most plantations in Arkansas are small, slightly more than 100 acres, said Joe Fox, state forester.

But small or large, “distance to the mill dictates price,” Fox said. Transportation is the single biggest variable cost, he said.

“It’s whatever’s in your region of the state. That’s the nature of the beast.”

Beyond that, mills that have curtailed their operations or shut down need the volume of timber to produce lumber so that prices will trickle down to the growers, Fox said.

“It just takes awhile to get there,” he said.

If you have a tip, call Jack Weatherly at (501) 378-3518 or e-mail him at

[email protected]

Business, Pages 67 on 05/12/2013

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