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Ag report: Housing market wilts plant, lumber sales

    The down housing market’s economic effects are even being felt by farmers, according to the latest Tuolumne County crop report.
    A lack of demand for development has, in turn, reduced the demand for landscaping plants, according to county Agricultural Commissioner Vicki Helmar, who compiled the report.
    The new report tracks the gross values of county farm and wood products from 2008 to 2009.
    Helmar unveiled the report at a Board of Supervisors meeting earlier this month. The report showed a decline in virtually all agricultural sectors. The county’s production values, in all, decreased by 25 percent.   
    According to the report, the value of total apiary and nursery products produced in the county — which includes landscaping plants —decreased from $394,000 to $348,000 from 2008 to 2009.
    Helmar blamed both a late spring freeze and the down housing market for hitting landscaping suppliers. The county has seven licensed production nurseries, she noted.
    George Kirk, owner of Solomon’s Gardens nursery, across from Standard Park, said he’s seen business drop in both landscaping and nursery sales.
    “They’re both down a bit. We’ve been fortunate to have a few big jobs,” he said.
    It’s hard to pinpoint, however, where the softness originates, he said. “You have housing sales dropping, but the whole economy is down.”
    The housing market’s tie-in to agriculture comes as no surprise to local developer Jim Todd of California Gold Development Corporation.
    “I keep saying that everything is connected,” he said.
    Todd described the real estate market as being in “a death spiral — where you get a plane in a certain condition and you can’t pull out of it.”
    Todd sees a couple reasons for the lack of capital flowing into potential developments. First, he said, it’s easier for banks to borrow money from the Federal Reserve at zero interest and buy U.S. Treasuries, which pay interest, than to take risks on housing or commercial developments.
    Also, according to Todd, recently passed federal regulations have banks wary to lend, for fear that they won’t meet new capital requirements.
    Some economists and leaders, though, point to the new regulations as a way to keep the banks from taking on so much risk that they crash they economy, as they did in 2008.
    In all, Tuolumne County’s agricultural value in 2009 was $20.2 million, down from $26.8 million in 2008.
    By far the largest decline in value came via the timber industry which, like landscaping nurseries, were affected by the decline of the housing market.
    Timber receipts — which include both commercial lumber and firewood — were cut in half from 2008 to 2009, going from $7.2 million to $3.2 million, according to the report.
    The board footage extracted from 2008 to 2009 went from just under 53 million board-feet to just under 30 million board-feet. A board-foot is equivalent to a unit of wood that measures 1 foot long, 1 foot wide and 1 inch thick.
    A small ranch-style house with three bedrooms requires about 3,000 board feet to build.
    The county production figures, in part, reflect last year’s closure of Sierra Pacific Industries’ Standard Mill, which is still closed pending an upgrade.
    It wasn’t just a lack of supply that brought wood prices down. The report also shows that the price of lumber dropped dramatically, from $107.70 per thousand-board-feet to $61.26 per thousand-board-feet.

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