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Vol. 17 No. 1                           January 2008

 

 

Cypress Mulch Controversy

 

One of the tenets in the code of ethics for professional foresters includes speaking up to correct public misperceptions and challenging untrue statements about forestry.  The views stated here are from the perspective of a consulting forester, and are not necessarily the views of any particular professional group to which I belong.  Although you (as a landowner) may not be directly affected by this issue, it provides us an opportunity to see how the rights of landowners can be compromised from inaccurate perceptions and ill-advised market policies. 

 

Home Depot, Wal-Mart, and Lowe’s all recently imposed moratoriums on selling cypress mulch from Louisiana.  Lowe’s is not taking any cypress mulch south of I-10 and I-12, while the other stores have moratoriums on cypress mulch statewide.  These moratoriums are the result of environmental activists’ pressures on retailers to stop selling cypress mulch.  The ‘Save Our Cypress Coalition’ (with the support of other mainstream environmental groups) appears to be the main group wanting to put a halt to cypress logging.

 

Many well-meaning people are properly concerned about the health of our wetlands and coastline in Louisiana.  Our cypress forests play an important ecological role in helping to stabilize soils, filter pollutants and nutrients, and help to buffer the effects from hurricanes and storm surges.  In addition, they provide habitat for important wildlife species as well as providing recreation, fishing, hunting, and timber production opportunities. 

 

Some of the ecological functions of our cypress forests in southern Louisiana have been significantly compromised because of the network of flood control and transportation systems.  These include numerous levee systems, the channeling of the Mississippi River, the inter-coastal canal, the numerous transportation canals for oil & gas exploration, roads, railroads, and other flood control structures.  These man-made structures have caused fundamental changes in the way water flows and are the main reasons for the loss of Louisiana’s coastline and are causing soil subsidence and salt-water intrusion in some areas. 

 

Some of our cypress forests are now permanently flooded due to the factors mentioned above.  Cypress trees cannot flourish and certainly cannot regenerate under permanently flooded conditions.  The Barataria, Verret, and Lake Pontchartrain basins in particular were overflow basins of the Atchafalaya and Mississippi Rivers and now have large expanses of permanently flooded areas.  The cypress trees in these permanently flooded areas are in slow decline and will eventually die out without some remediation.   In addition, salt water intrusion along coastline areas and in an area west of Lake Maurepaus is responsible for slowly killing the cypress and is causing ecological problems.   

 

Several years ago, Governor Mike Foster appointed a blue-ribbon commission of experts to study the cypress situation.  Basically, the commission identified three conditions:  Class 1 is where natural cypress regeneration is likely to be successful after logging.  Class 2 is where natural regeneration is unlikely, but planting is likely to be successful after logging.  Class 3 is where neither natural regeneration nor planting are likely to be successful without some remediation.  The commission recommended that science-based interim guidelines be formulated for cypress management while the 3 classes are geographically identified and more information gathered.  

 

While it’s beyond our scope to offer specific remedies for these compromised areas, it is appropriate to address the role of management of cypress forests in general.  Sound science is the foundation for the practice of forestry.  Professional forest management requires us to manage the forest for future generations, as well as for the present.  The forestry community is not recommending that we harvest the timber in the areas that cannot regenerate cypress trees.

 

Mike Dunn, an LSU Extension Forester recently wrote an excellent Discussion Paper entitled “Economic Considerations of Louisiana’s Cypress Resource.”  He presents an excellent argument for encouraging economic markets for cypress products (mulch in particular) for the benefit of landowners, local communities and society.  The report cites facts compiled from periodic government forest inventories that estimate detailed timber volumes, growth and removals on a parish basis.  These surveys have shown increasing total timber volumes in the state since the 1950s.  A brief summary:

 

The issue boils down to sustainability.   Successful regeneration meets a pretty reasonable standard for sustainability.  If cypress can be regenerated through natural seed fall or planting, then landowners should be encouraged to manage their timber without being burdened with restrictions.  Areas not capable of regeneration should be geographically identified and be off limits to logging. 

 

Actually, the forestry industry has successfully promoted forest regeneration and adherence to Best Management Practices (BMPs) for Forestry throughout the state.  The Louisiana Forestry Association (LFA) investigates every complaint and isolates loggers who are repeat offenders.  I have seen substantial improvements in forestry practices during my 30 years of experience in forestry.  There is a serious commitment to adhere to the voluntary BMPs now in place in all sectors of the forestry community. 

 

 I recommend that interim guidelines can be developed most appropriately by requiring landowners in coastal wetland areas to submit, prior to harvest, a reforestation management plan written by a qualified professional forester and agreed to by the landowner.  The Louisiana Department of Agriculture & Forestry can approve the plans and inspect the reforestation successes over time to ensure compliance.  We can ensure that the plans are written by qualified professionals by requiring the forester to either have a Certified Forester (C.F.) designation or have the Association of Consulting Foresters (A.C.F.) designation.  Both of these designations identifies professional foresters that have met certain educational and conduct standards.  These standards are currently in place and can be used with confidence by landowners and the public.  The costs would be minimal to landowners and are likely to increase both economic and environmental benefits.  Bags of cypress mulch coming from Louisiana could be certified as ‘sustainable.’  This certification would show a commitment by private landowners to cypress regeneration and would denote the guidance from professional foresters in managing the wetland ecology.    

 

 

 The Stumpage Report

 

Stumpage is the price that timber brings to landowners as it is “standing on the stump.” 

 

The demand for sawtimber products have been weakening nationwide throughout 2006 and 2007.  Demand for lumber and plywood have dropped along with the domestic housing market.  The graph below shows seasonally adjusted housing starts by month since March 2005:

 

 

1.2 million foreclosures were made on sub-prime loans in 2006.  Another 1 million will be foreclosed in 2007.  In the meantime, the inventory of unsold houses on the market has soared.   Experts predict housing starts to be about 1.2 million starts in 2008.  It is likely that the housing market will recover gradually.  

 

Supplies of lumber in the U.S. fell 15.6% over the past year.  U. S. lumber production is running about 89% of last year’s rate.  Year end production cut-backs may lower that figure slightly.  The largest drops were from reductions in Canadian imports, as opposed to reductions in domestic production.  Canadian lumber production is running about 90% and exports to the U.S. are 84% of 2006 levels.  It is likely that further reductions in lumber supply are necessary in order for lumber prices to become steady.

 

U.S. panel production was 95% of 2006 levels through the 3rd quarter 2007.  Panel imports to the U.S. have basically dried up.  Brazilian plywood producers abandoned the U.S. markets due to the weak dollar in favor of the stronger European markets.  

 

The weak dollar, compared to foreign currencies, has made it less desirable for other countries to export their products to us.  Lumber imports to the U.S. are running about 21% lower than in 2006.  Plywood imports are running about 98% lower from 2006 levels.  Most countries, other than Canada, have found markets for their wood products outside the U.S. due to the dollar devaluation.  Our lumber exports are insignificant in size, and have risen only 6% from last year’s levels.  

 

Log supplies at the mills are variable.  Most mills were able to improve supplies of logs at the mills because of the relatively dry fall.  They came into the fall with less than desirable inventories because of the rainy July and because of the shortage of loggers.  Mill managers appeared to take the attitude that they would continue to run the mills at a narrow margin or take a shutdown if necessary rather than pay more for timber in order to build inventories.   As timber sellers for our clients, we are still hoping for a wet winter and spring to give us a boost in stumpage prices. 

 

Demand and prices for pulpwood are strong.  The weak U.S. dollar makes it easier for foreign countries to buy products made in the U.S.  A large amount of paper products are still made in the U.S.  It’s a good time to get your first thinnings done. 

 

The following graph shows the average quarterly prices of softwood lumber and plywood prices along with the average pine sawtimber stumpage prices from our timber sales since 2003:

 

* compiled from Random Lengths

** average of Templin Forestry, Inc. clients

 

The graph shows that stumpage prices have not decreased as much as the prices for lumber and panels.  Stumpage prices are relatively stronger than the prices for finished goods.  This is certainly a time when landowners can benefit from professional assistance when selling their timber.  Please call us when you decide to sell any timber.  Our professional foresters will work with you to advertise your timber in a manner that will generate the most competition among timber buyers and will result in the best price the market will bear. 

 

 

Real Estate

 

The markets for timberland are strong.  We’ve seen land prices increase 20-25% in the last year alone.  Leading indicators are the Temple-Inland sale to The Campbell Group along with sales of smaller tracts made by TIMO’s.  We’ve had excellent success with sales of our listings as well.  Call Louisiana Forestry Investments, Inc., our real estate firm, if you decide to sell your land.  We will get you the best price for your land. 

 

 

 

Comprehensive Forest Management Services

 

Templin Forestry, Inc. provides comprehensive forest management services to forest landowners throughout Louisiana, east Texas, south Arkansas and west Mississippi.  Our strengths are successful performance in planning and implementation of virtually all forest management services.  Our services include timber marketing, forest inventory, GIS and GPS organization and mapping services, land and timber appraisals, and real estate services.  We also provide site preparation, planting, herbicide applications, fertilization, pruning, and pre-commercial thinning treatments.  We don’t buy timber because that would create a conflict of interest in helping you get the best price.  We are interested in discussing your property and objectives with you and pledge our best professional efforts to assist you in maximizing your benefits from forest management.  Please call us at 318.445.5566