How Landowners Can Leverage Mississippi's Recovering Timber Market
Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.
This article was updated on 10/30/23.
More than half of the land for sale in Mississippi is made up of forest land, making its timber land market a large contributor to its economy: A 5.6% increase in jobs in the timber industry has strengthened what once was a declining market.
Demand for timber is continuously growing thanks to the rising popularity of paper-based packaging, and Mississippi landowners can leverage this by cutting and selling timber from their acreage. What's more is that the state will additionally give a large income tax credit through the Mississippi Reforestation Tax Credit as a way to continue reforestation.
Hardwood and pine are the primary types of trees in Mississippi forests. The state ensures that for every removal, a couple more trees replace the one used for timber.
With that said, let's look at some data and statistics that Mississippi landowners can use to leverage the state's timber market.
What's the Average Cost Per Acre of Land for Sale in Mississippi?
According to our research, the average price of land for sale in Mississippi is $2,860 per acre. The state has varying prices across regions that can differ dramatically:
- Adams County: $3,149 per acre;
- Harrison County: $5,200 per acre;
- Pearl River County: $4,821 per acre;
- DeSoto County: $5,907 per acre.
The differentiating prices reflect the land's productivity in farming and timber.
Q2 2021 Findings on Mississippi's Timber Market
Price reporters used 91 timber sales from Q2 2021 for findings on the market during that time. These reports are beneficial to landowners looking to sell their timber. Staying up-to-date each quarter can give insight into future trends and what increases the value of your timber.
Note that, as of Q4 2022, the production value of timber has risen about 15% since the same quarter in 2021. Timber harvesting and delivered wood prices are both rising, as well.
#1 – Landowners Benefitted From the Wetter Weather
The Q2 report indicated that increased rainfall led to increased timber prices. Wet weather makes logging difficult and undesirable. Harvesting timber when wet can cause soil rutting, which decreases the forest ground's ability to produce well.
When dry weather comes around, trees are easier to cut down and transport.
The smaller production of limber meant constrained supply, which then led to inflated prices. Landowners were able to profit well from the cost increases.
As the weather dried, standing timber overwhelmed loggers. Prices have decreased but then are coming back up again as mills gain traction in the industry.
#2 – New Mill Constructions & Expansions Are Underway
A few timber companies have opened sawmills in Mississippi to exploit the state's timber oversupply. Pro South and Biewer are just a few processors contributing to the state's timber industry.
The presence of these mill constructions and expansions provides more jobs in the industry, which then allows landowners to keep selling and processing lumber from their properties.
Almost half of Mississippi's timber is exported, attracting businesses to process the state's supply. Many are foreseeing the state's timber market to catch up to the national growth level.
#3 – The Timber Market's Recovery
High lumber prices discouraged housing permits and starts in 2021; however, the current abundance of timber will decrease prices, which will likely bring up more housing construction.
Other Ways Investors Benefit From Mississippi Land
The fertile soil that produces Mississippi's healthy forests also contributes to the large production of corn, rice, and cotton. Additionally, this soil attracts wild animals, like waterfowl and deer.
Along with renting out farmland, landowners can use private acreage as hunting and recreational sites for others to use to take advantage of the state's rich habitat.
Develop a Forest Management Plan With a Professional
Forest management plans are for landowners to maximize their forest land to profit from the timber it can produce. It includes outlining the goals and objectives owners have for the land.
There are multiple ways owners can utilize forest land. Foresting is just one avenue that can bring the biggest return on investment. These plans will define how an owner will use the land, like foresting, and determine how and when timber can be harvested and kept healthy.
Landowners may also use forest acreage for recreational, aesthetic, or hunting purposes, all of which can be lucrative options.
Management and Stewardship Plans
Management and stewardship plans are used to define long-term objectives for land. Resource inventory is one part of these plans. Taking an inventory can account for timber, wildlife, and recreation values.
Management plans draw out ten-year objectives regarding timber, which can qualify an owner for the Reforestation Tax Credit. Stewardship plans regarding wildlife also have benefits through taxes and the Stewardship Incentives Program.
Practice and Activity Plans
Practice and activity plans are also known as timber sale plans. These outline the specifics of lumbering within an acreage. Such factors include tree types, erosion control, and reforestation.
Using these forest management plans will make investing in your land a smooth process.
Parts of a Forest Management Plan
Landowners should always seek out a professional when it comes to creating forest management plans. Foresters, FF&L, and other organizations can walk forest landowners through making plans.
Plans typically include these major factors:
- Ownership Goals;
- Management Objectives;
- Topographic, Soil, and Aerial Maps;
- Legal Property Boundary Descriptions;
- Resource Inventory Data;
- Timber Inventory Data;
- Management Recommendations;
- Activity Schedule Recommendations; and
- Management Option Costs.
Drawing out these specifics will help forest landowners profit from their resources.
Economic Forecasters See Continuing Market Recovery Through 2021
As the economy bounces back from vast unemployment, the timber market is predicted to fare well through the rest of 2021. Timber oversupply will be fed through mills so that the industry can roll at a faster pace, likely to grow Mississippi's impact on the timber industry massively.
Browse & List Land for Sale in Mississippi for Free on MyEListing.com!
List and browse land for sale in Mississippi for free right here on MyEListing.com. Sign up for an account and receive accurate market intelligence as well as customized property-type alerts.
Other recent articles
Article Search
Share
All Article Categories
