This article originally was published in the Times and Democrat newspaper on October 26, 2024.
“Money doesn’t grow on trees” is a saying often heard by those who are spendthrifts. However, for many of South Carolina’s forest landowners, money has grown from their trees for many decades and provided a reliable source of income for their families. Unfortunately, South Carolina’s timber industry has had its share of bad news over the last year following changes at several major wood processing facilities. The 2023 closure of the almost 90-year-old WestRock paper mill in North Charleston and the Pactiv Evergreen paper mill in Canton, North Carolina, impacted pulpwood markets across the Lowcountry and Upstate. An initial significant drop occurred in the statewide average for pine and hardwood pulpwood stumpage, which is the amount a landowner is paid for their wood. More recently, the announcement of the indefinite closure of the Interfor pine sawmill in Summerville and the reduction in shifts or operating hours at Canfor pine sawmills in Darlington and Estill has raised even more concerns from forest landowners on whether growing trees in the state can still be profitable.
Tim Adams, Division Director for Resource Development with the South Carolina Forestry Commission, can provide insight into the drop in pulpwood stumpage and what has led to the most recent sawmill closure announcements. Adams describes the 2023 drop in pulpwood stumpage prices as a “kneejerk” reaction to the paper mill closure announcements but feels that these prices are stabilizing at a lower price point. The statewide average at the end of the second quarter of this year was $7.55 per ton for pine pulpwood. Hardwood pulpwood stumpage has increased over the last year and was $9.92 per ton at the end of the second quarter of this year. Forest landowners and those in the timber industry in certain regions of the state fortunately still have access to pulpwood markets and other processing facilities that use smaller round wood. The former Georgia-Pacific oriented strain board mill in Allendale purchased by WestFraser in 2021 continues to increase production, providing an additional market for pulpwood stems in the western coastal plain.
Adams explained that the loss of lumber-producing capacity in the state is more complicated. “The price of construction materials, such as lumber, plywood and oriented strand board (OSB), is affected by factors such as the interest rates, housing starts, and manufacturing capacity. Although the US is reported to have a large housing deficit, the increase in housing starts has faltered recently as interest rates were increased to bring down inflation due to stimulus spending. Declining lumber prices have resulted in announced lumber mill closures and reduced output. Pricing for other wood products, such as pine plywood and OSB, has been more stable than lumber pricing.”
The statewide average for pine chip-and-saw and sawtimber has held steady the last year, at about $18.50 and $24 per ton, respectively. However, the potential impacts of the most recent pine sawmill closures and reductions in production have not yet been reported. Hardwood sawtimber stumpage can fluctuate seasonally and was reported at the end of this year’s second quarter as $21.75 per ton. South Carolina grows over 30% more wood than is harvested each year. Therefore, prices are not expected to increase significantly until the state’s high supply of sawtimber stumpage begins to be balanced by removals.
Landowners concerned about the economics of continuing to grow timber should consider some important factors. The first is that South Carolina’s forest industry continues seeking ways to expand wood fiber markets locally, regionally, and globally. New products continue to be developed from wood by emerging industries in the state, such as mass timbers and glulam. These engineered wood products are designed to replace concrete and steel in construction and for specific architectural designs where exposed wood is desired. South Carolina also has a strong export market for wood and wood products, including logs, pulp and paper, solid wood, and even wood chemicals. Also, non-timber commodities such as carbon offsets and timberland management to protect forested watersheds in municipal drinking water source areas will continue to become emerging markets.
Also, a critical consideration for landowners concerned about the wisdom of growing trees is the importance of maintaining the health of their existing forests. Although stumpage prices continue to fluctuate, standing timber is still money in the bank. Landowners planning a timber sale soon need to weigh the decreased stumpage price they may be offered for their pulpwood against the detrimental impacts to their forest of not conducting the sale, particularly if it is a first thinning. Properly timed thinnings in natural and planted pine stands can generate income, improve habitat for wildlife species, and, most importantly, maintain a healthy, productive forest. One of the most critical considerations for conducting thinning operations when needed is that it will maintain a healthy forest with a reduced risk of insect attack, primarily from pine bark beetles.
Pine stands that are overstocked and have surpassed the target age for a thinning have less resistance to beetle attack, particularly those on drier soils during periods of extended drought. While thinning does not guarantee that a pine stand will not be attacked during a bark beetle outbreak, it can lessen the impacts since the stand will grow more hardy trees with less competition for site resources. Also, thinned stands will have more significant air movement, which dilutes bark beetle pheromones and reduces the attraction of additional insects to the trees. Dr. David Coyle, Associate Professor and State Extension Specialist for Forest Health and Invasive Species at Clemson University, stresses the importance of reducing the potential for pine beetle outbreaks. “With the prevalence of pine in any area, landowners should be on the lookout for southern pine beetle outbreaks.” Pine bark beetle outbreaks can also be due to Ips engraver beetles, which target stressed, diseased, or damaged trees, particularly during hot, dry weather.
Coyle also emphasizes the impacts of invasive plants on South Carolina’s forest resources. “Invasive plants like the Elaeagnus species may not directly kill trees, but their competition for resources can have a big impact on tree growth, and it can cost a landowner significant effort and resources to manage these pests.” Another emerging forest health concern in South Carolina is the potential impacts of non-native insects. Coyle continues to encourage forest landowners to be on the lookout for two species that are working their way south. One is the spotted lanternfly, which feeds on over 70 different species and can damage various hardwood species and decimate agricultural groups such as tree fruits, berries, and grapes. This insect, native to China, has been found in Virginia. Another emerging threat is the elm zigzag sawfly, native to China and Japan. It can severely defoliate elm species and was found in North Carolina in 2022.
South Carolina’s 12.9 million acres of forestland provide jobs, clean air, clean water, wildlife habitat, recreational opportunities, and timber and non-timber resources. Growing trees is a long-term investment of time and money, but factors other than current timber markets should be considered.
Author(s)
Janet Steele, Cooperative Extension, Forestry and Wildlife Agent
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