Just read this on another board and it makes sense "Sent: Wednesday, March 08, 2006 4:07 PM Subject: Bad mulch---read carefully If you use mulch around your house be very careful about buying mulch this year. After the hurricane in New Orleans many trees were blown over. These trees were then turned into mulch and the state is trying to get rid of tons and tons of this mulch to any state or company who will come and haul it away. So it will be showing up in Home Depot and Lowes at dirt cheap prices with one huge problem; Formosan Termites will be the bonus in many of those bags. New Orleans is one of the few areas in the country were the Formosan Termites has gotten a strong hold and most of the trees blown down were already badly infested with those termites. Now we may have the worst case of transporting a problem to all parts of the country that we have ever had. These termites can eat a house in no time at all and we have no good control against them, so tell your friends that own homes to avoid cheap mulch and know were it came from." Rebuttal on the same board: http://urbanlegends.about.com/library/bl_mulch_termites.htm
Well, The local T.V. news did a report on this just last week. Basically said, nope, not an issue, at least for the Memphis area. Had something to do with the weather around here, but I thought the weather here was pretty much the same as the N.O. area - hot & humid. A local landscaper who was interviewed said on way to prevent the spread of any termite from mulch to your house it to keep the mulch about 4 inches away from your house and put down something like pea gravel in the gap. I'll see if I can find an online link to the article from the news station and post it here. Ryan