The white, cottony masses covering the small branches on this American beech tree, Fagus grandifolia, are beech blight aphid nymphs. The nymph’s abdomen is covered with a white, cottony mass of waxy filaments. If the branch is disturbed, the aphids “wag their tails” and do the boogie-woogie.
Aphids feed on plant sap. Their feeding generates a lot of honeydew, which is a sticky, sugary substance excreted by aphids. These sugary drops support the growth of a black sooty mold that grows on any surface, including the leaves of plants where the honeydew collects. The mold is harmless to the plant and just grows across the surfaces, although it is unsightly and will block some sunlight needed for photosynthesis.
The adult beech blight aphids leave the beech tree in the fall and seek out bald cypress trees, where they feed on the roots before returning to the beech trees in the late winter to lay eggs that hatch the next spring.
The aphids pose minimal damage to the beech tree, but copious amounts of sooty mold will blanket plants below. This sooty mold species, Scorias spongiosa, associated with the beech blight aphid, is different because it forms a very thick mass that starts off honey-colored and turns black with age.
For more information about this insect and how to control it, see NCSU Extension Beech Blight Aphid.