Ag report: Housing market wilts plant, lumber sales

Walt Cook, The Union Democrat /

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.

11817738
The Union Democrat
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