Don't know if this is internet lore or not, but the pessimist in me buys it:



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.

Isn't almost all mulch made from bark, or shells of some kind? How long could a termite live sealed inside a plastic bag?

Just for the hell of it I looked it up on Snopes.com. Here is what they had to say:

Claim: E-mail warns that buying mulch from home improvement stores may spread the Formosan subterranean termite.

Status: Undetermined.

Example: [Collected via e-mail, 2006]

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.

Origins: We've long realized that transporting people and goods (particularly plants and food crops) from one region to another can result in our also inadvertently carrying unseen little critters into areas where they are not normally found, and that unleashing bugs and other animals into new environments can have disastrous consequences. Free from predation, natural defenses, and other factors that may ordinarily keep them in check, these creatures can wreak havoc by preying on (or crowding out) other plants and animals.

One such accidental transplantation occurred around the time of World War II, when the Formosan subterranean termite was introduced into the United States by ships that carried the species from China to U.S. coastal towns. This species of termite has since established itself throughout the southern United States (including Hawaii and southern California), where it poses a threat to trees and the timber industry, as well as just about anything — utility poles, homes, buildings, ships — constructed wholly or partially from
wood.

Back in October 2005, Louisiana State University's (LSU) Agricultural Center (AgCenter) issued a warning about the potential spread of Formosan subterranean termites into new areas from southern Lousiana through the re-use of wooden building materials taken from homes damaged by Hurricane Katrina and installed in new structures elsewhere. As the LSU AgCenter notes, termites can be spread through the movement of many different kinds of wood products, including mulch:
This termite hitches a ride to new areas in infested cellulose. At the time of this writing, the number one method of spreading the Formosan subterranean termite is infested railroad ties. The second most important method of spreading the Formosan subterranean termite is infested utility poles. Other methods of spreading the termite include: wood from structures, lumber, pallets, landscape timbers, wood used in the oil industry, firewood, trees, woody plants, sawdust, mulch, wood in boats, potted plants, mobile homes, homes and paper.
The scenario described in the message quoted at the head of this page is therefore possible, but we can't really say how probable it is or how much of a danger it might pose. We don't know for sure that mulch made from damaged trees in New Orleans is (or will be) showing up in major home improvement chain stores such as Home Depot and Lowes, or, if so, how widespread such usage might be and whether any of the mulch actually does contain termites. (And, in any case, there are a number of mitigating factors, such as the fact that the Formosan subterranean termite is rarely found above 35° N latitude because the colder temperatures typical of higher latitudes prevent its eggs from hatching.)

For those homeowners who find themselves dealing with termite infestations (whatever the cause), there are are number of good sites on the web that provide information about termite control methods, some of which are linked in the "Additional information" section below.