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A Supremely Important Decision About America's Logging Industry

A Supremely Important Decision About America's Logging Industry | Timberland Investment | Scoop.it
On December 3, the U.S. Supreme Court will consider who is best suited to set national environmental policy – the experienced scientists and regulators at the Environmental Protection Agency or activist trial lawyers.

Northwest Environmental Defense Center (also known as Decker v. NEDC) the justices will review a 2011 Ninth Circuit Court of Appeals decision that overturned 35 years of EPA Clean Water Act regulation of the logging industry, the source of 2.5 million American jobs. The high court will decide between two theories of regulation: (1) the law tells states (as the EPA insists) to regulate runoff from logging roads via “Best Management Practices” (which are flexible, federally supervised standards tailored to local conditions, that activists cannot challenge in court); or (2) the law requires (as the Ninth Circuit says) “point source” permits usually reserved for factories, mines and chemical plants, and subject to court challenges.

This arcane technical dispute has real-world consequences.

Under the Ninth Circuit ruling, a permit could be demanded for every drain and ditch that directs water from a logging road to a fish-bearing stream. The U.S. Forest Service estimates that getting all its roads fully certified could take as much as a decade. The state of Washington has said that, on average, it will need one permit per mile for all 55,000 miles of its eligible roads, with, by some estimates, the cost of processing a single permit running $2,800. And, unlike BMPs, permits will be subject to activists’ lawsuits. Senator Ron Wyden (D-Oregon) has warned that upholding the Ninth Circuit decision will “bury private, state and tribal forest lands in a wave of litigation.” More like a tsunami.
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Timberland Investment
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Sponsored by...

Sponsored by... | Timberland Investment | Scoop.it

Prentiss & Carlisle  is one of the largest timberland asset managers in North America. P&C provides ongoing management services on approximately 1.75 million acres of timberland located in Maine, Michigan, New York, Vermont, Wisconsin, Ontario and Quebec. Nearly every acre under management is certified by the Forest Stewardship Council through either our clients or through P&C itself, which holds FSC certificates for both Forest Management and Chain-of-Custody.

 

P&C provides turnkey land management from long-range forest planning through on-ground forestry, marketing of forest products, harvesting, transportation, road construction and maintenance, stump-to-mill accounting and reporting, client cash management, administration of third-party relationships, public advocacy/representation and strategic asset planning. P&C also provides specialized consulting services in related areas of expertise:

  • Timber inventory design, execution and analysis
  • G&Y modeling and timber harvest scheduling
  • GIS mapping and data management services
  • Timberland valuations and appraisals
  • Acquisition and disposition due diligence
  • Market studies
  • Timber supply modeling

 

About this magazine

Our aim is to provide a gathering place for news and opinion about timberland investing. We cover both publicly traded issues including listed timber companies, real estate investment trusts (REIT's), and exchange traded funds (ETF's), and the more private world of institutional investing in timberland. Our focus is on: the rationale for investing in timberland; performance of publicly traded timber investments; timberland deals and transactions; timber supply, demand and prices, and; public policy issues that impact timberland investing. Not interested in all of these topics? You can easily filter the stories by using the Tags button above.

 

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Some useful links

 

Stock quotes, news and financial metrics

These links take you to customized Google Finance pages for timber REITS, indexes and other publicly traded companies of interest:

 

Prentiss & Carlisle newsletters

Quarterly updates on conditions in our operating regions

 

Timber Mart North 

Lake States price reporting service published by P&C

 

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Enviva launches wood supply tracking system

Enviva launches wood supply tracking system | Timberland Investment | Scoop.it
Enviva Holdings LP, the world’s largest producer of wood pellets, recently publicly released the first data from its groundbreaking Track & Trace (T&T) program. T&T is a proprietary system that enables Enviva to track every truckload of wood the company procures from the forest back to its source, providing a detailed understanding of the characteristics of the wood the company uses. Demonstrating an unmatched commitment to transparency, Enviva is now making that information available to the public.

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Before selling wood to Enviva, a supplier must provide detailed data on the specific forest tract being considered for harvest, including each individual tract’s precise geographic location, acreage, forest type, species mix, age and the share of wood from each harvest that goes to Enviva versus other consumers. Enviva does not accept any wood from a harvest without this information, and the company records the data and verifies the accuracy of its procedures through third-party audits.

 

T&T data are presented in two ways. First, the Forest Trend Map is based on time-series data from the U.S. Forest Service and displays changes in overall forest conditions in the Southeast U.S. and in each of Enviva’s forest supply areas. Second, the Enviva Wood Supply Map provides detailed information on actual timber harvests around each of Enviva’s facilities during the first half of 2016. Data include harvest site, landowner type, forest type, harvest type, years since last harvest, the number of acres harvested and the percentage of the harvest volume provided to Enviva for wood pellet production.

 

The first T&T public release includes Enviva wood purchases from January through June 2016.

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American Loggers Council Outlines Priorities for New President, Congress

American Loggers Council Outlines Priorities for New President, Congress | Timberland Investment | Scoop.it

The American Loggers Council (ALC) today outlined key priorities for the 115th United States Congress and the Trump Administration’s first two years.
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ALC’s top priorities include:


Regulatory Accountability Act: The American Loggers Council joins the U.S. Chamber of Commerce in supporting swift action on Regulatory Accountability Act that has already been approved by the U.S. House of Representatives (HR 5).

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The Act would make the regulatory process more transparent, agencies more accountable for their decisions, and regulations better-tailored to achieve their purpose without unnecessary burdens on stakeholders.


Federal Forest Management Reform: Much of America’s forest land is controlled by the federal government. While a large portion of federally-owned forests are non-reserved and suitable for sustainable timber production, harvest levels on federal lands remain low.

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ALC supports sensible reforms to the National Environmental Policy Act and Endangered Species Act, and supports giving the U.S. Forest Service adequate resources to prepare and implement forest projects.


Future Careers in Logging: Timber harvesting operations are very similar to family farms with sophisticated and expensive harvesting equipment that requires young men and women to learn how to run the business, including equipment operation and maintenance, prior to obtaining the age of eighteen.

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ALC supports extending the agricultural exemption now enjoyed by family farmers and ranchers to train their sixteen- and seventeen-year-old sons and daughters to carry on the family business to mechanical timber harvesters.


Carbon Neutrality of Biomass: Congress must pass legislation formally recognizing the renewability and carbon benefits of biomass energy derived from wood and plant material, putting biomass in the same category as wind, solar, and other renewables.

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Predictable and Uniform State-Federal Transportation Standards: Across state lines, loggers and truck drivers often encounter patchwork and inconsistent transportation laws and regulations. ALC supports more predictable weight limit standards for hauling forest products, and other measures to improve efficiency and safety.

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Western Wisconsin timber economy may be headed for downturn

Western Wisconsin timber economy may be headed for downturn | Timberland Investment | Scoop.it

WASHBURN COUNTY - The local timber economy is heading toward what some in the industry see as a downturn. “We will be going through some pains here in the forest products industry, at least for the next year or two,” said Max Ericson, who is a local logger and operator of the Springbrook Wood Yard in the Town of Springbrook. The problem comes from a combination of issues, one being that the price per cord of wood that loggers are receiving is down, as is the ability to sell their harvest.

 

Despite the loss of profit, Ericson said that is not stopping loggers. “We all still have to keep working. When you’ve got all this machinery, you can’t stop the wheels from turning,” said Ericson, who is also the president of the Great Lakes Timber Professionals Association.

 

The overhead to run a timber harvesting operation can run in the millions of dollars with equipment and transportation costs. “The reality is that these guys cannot afford to let the equipment sit idle. They have payments and need to maintain cash flow. Scaling back on harvesting is a means to match production to current demand,” said Washburn County forest administrator Mike Peterson. Peterson manages 148,000 acres of public land within the Washburn County forest for timber production and public recreation. Peterson added that loggers under contract in Washburn County face revocation, bond retention or stumpage increases if they do not meet the contract deadlines for harvest.
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Peterson said this is in part because loggers have not been able to harvest due to wet conditions for the last two summers. Combined with a wet fall this year, getting into the woods to harvest has been impossible. To compound matters there are simply not enough loggers in the state to complete all of the sales under contract during the short winter logging period. In addition, mills are not buying as much as before – and they’re paying a lower rate. This has Ericson thinking the situation could put some loggers out of business.
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As operator of the Springbrook Wood Yard, Ericson used to purchase wood from other loggers to fill the needs of mills but now he can fill those needs with his own harvest and still have excess. “And that’s for hardwoods, the pine markets are worse. They are pretty near non-existent,” he noted. More than just the timber harvesters could feel the effects of the downturn though. Ericson said that this could also affect county bottom lines, like Washburn County, that utilize timber revenues as a funding source.
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He also questioned the continued viability of the higher value timber market found in Washburn County. Sustainable? “The county forest system has seen record prices and revenue streams over the last 10 or more years and while this has been advantageous to county functions, I question whether this is sustainable,” said Peterson. He said that strong competition for timber sales over the last decade has driven standing wood prices higher, but if the prices go too high for wood-consuming industries to operate, “they will likely source their fiber from other, cheaper locations.”

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Alternative fundraising down in 2016 despite uptick in private equity capital

Alternative fundraising down in 2016 despite uptick in private equity capital | Timberland Investment | Scoop.it

Alternative investment funds raised a total of $602 billion in 1,228 funds last year, down in capital terms from $637 billion raised by 1,486 funds in 2015, according to a new report by alternative investment research firm Preqin.

 

Currently, there are 2,965 alternative investment funds seeking to raise a combined $1 trillion.
 

Among the alternative investment asset classes, 807 private equity funds closed on a total of $345 billion in 2016, up from $328 billion by 944 private equity funds in 2015.

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Infrastructure managers raised a record amount of capital in 2016, with 51 funds closing on $58 billion, up from 70 funds that raised $40 billion in 2015.

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Natural resource funds did not fare as well. Some 70 natural resources funds raised $58 billion in 2016, down from 91 funds with a total of $74 billion in 2015. The top 10 natural resources funds raised a combined $38 billion and they were all focused on energy.

 

Real estate and private debt fundraising also faltered. Real estate managers closed on 214 funds with a combined $104 billion in 2016, down from a total of $123 billion by 274 funds in 2015. 

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Global Timber and Wood Products Market Update

Global Timber and Wood Products Market Update | Timberland Investment | Scoop.it
The two Global Wood Fiber Price Indices were close to parity in the 3Q/16. The Hardwood Wood Fiber Price Index (HFPI) has rebounded by 5.6% from the 1Q/16 when it reached an 11-year low. The biggest price increases this year have been in Brazil, Indonesia, Australia and Chile where prices have gone up despite the strengthening of the local currencies. However, hardwood fiber prices have not gone up in all markets this year. Hardwood pulplog prices were lower throughout Europe, Eastern Canada and the US South.

Except for Russian pulpmills, which have by far the lowest hardwood fiber costs in the world, hardwood pulp-producing regions throughout North America, Europe and Latin America currently have wood costs ranging in a fairly narrow range between US$75/odmt to US$100/odmt. Five years ago, when the HFPI reached its all-time-high, this range was substantially wider at US$75/odmt to US$175/odmt.

Softwood chip and pulplog prices fell in the local currencies in much of Europe and North America which, together with a stronger US dollar against the Canadian dollar and the Euro, resulted in a decline of the Softwood Wood Fiber Price Index (SFPI) in the 3Q/16. The SFPI is currently close to the lowest level in over ten years. During the past 12 months, softwood fiber costs in US dollar terms have fallen the most in the US Northwest, British Columbia, France, Norway and Germany, while they have gone up the most in Brazil, New Zealand and Japan.
Sam Radcliffe's insight:

Note: The Global Wood Fiber Price Index is a weighted average of delivered wood fiber prices for the pulp industry in all regions tracked by the publication Wood Resource Quarterly. These regions together account for 85-90% of the world’s wood-based pulp production capacity. The price is based on current quarter average prices, and country/regional wood fiber consumption data. The global average price for softwood and hardwood is calculated in nominal US$ per oven-dried metric ton (odmt) of wood fiber.

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Sand project would require huge wetland loss

Sand project would require huge wetland loss | Timberland Investment | Scoop.it

State and federal regulators are reviewing plans for an industrial sand plant in western Wisconsin that would represent the largest loss of wetlands by a single sand project in Wisconsin since at least 2008.

Meteor Timber, the largest private landowner in the state, is proposing to build a sand drying plant along I-94 in Monroe County and a sand mine in neighboring Jackson County.

Together, the projects are valued at $65 million and would create nearly 100 jobs. With nearly 50,000 acres in forest holdings in the state, the sand operation would be Meteor’s first entry into a business sector catering to the petroleum industry.

 

To build the plant, Meteor says it would have to eliminate 16.6 acres of wetlands. Much of the property includes land that a U.S. Army Corps of Engineers official describes as pristine forested wetlands.

By comparison, since 2008 the Department of Natural Resources has issued 60 wetlands permits to sand operators, which allowed for the destruction of 26 acres of wetlands, according to DNR figures.

 

Meteor’s sole project represents more than 60% of that total.

Sand mining grew rapidly with the boom in hydraulic fracturing, but more recently it has struggled as oil prices fell.

Sam Radcliffe's insight:

Not sure how the headline "huge wetland loss" squares with the 16 acres in the project. According to the DNR there are 5.3 million acres of wetlands in Wisconsin!

 

Meteor Timber is a Timberland Investment Resources (TIR) entity. Shows there are all kinds of potential income streams from timberland.

 

 

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Some Wisconsin loggers holding off on timber harvests

Some Wisconsin loggers holding off on timber harvests | Timberland Investment | Scoop.it
Some northern Wisconsin loggers are putting off timber harvests. The prices for timber products they deliver have fallen over the past eight months.

Great Lakes Timber Professionals Association Executive Director Henry Schienebeck said some loggers are holding off on harvesting wood they bought under contract. He said an oversupply of raw material on the market is leading some to consider their options.

“The guys are still able to produce the wood. Now, they’re trying to adjust their production levels to what the mill requirements are right now,” Schienebeck said.

Larger mills don’t have as much need for wood since they have full inventories, according to Forrest Gibeault, analysis and investment operations director with forestry consulting firm Steigerwaldt Land Services out of Tomahawk. He said several factors are driving that.

“One of them being that the mills are probably not working at full capacity,” Gibeault said. “Their product demand may not be where they would like to see it.”

He added loggers likely expanded their workforce last year to produce more wood for mills that had lower inventories at the time. Now, Gibeault said larger mills can afford to pay loggers less for the wood they deliver because of adequate supplies.

While some loggers are delaying harvest, that’s increasing uncertainty for northern Wisconsin counties that aren’t paid for timber sale contracts until the wood is harvested. 

Jon Harris, director of forestry and natural resources for Douglas County, said they’re seeing a backlog of active contracts. The county's number of contracts that haven’t yet been harvested has increased by about one-third in the last decade.

“I believe we have just upwards of $13 million of stumpage on our books right now. We haven’t realized any of that obviously until it gets harvested,” said Harris. “The longer you’re carrying that inventory, the more you’re at risk for losing some of that inventory.”

Harris said a wildfire, windstorm or market collapse could mean a revenue loss for the county. He said eight contractors are seeking final, fifth-year extensions on about 20 timber sale contracts this year. The county typically sells contracts on a two-year term to harvest, offering up to two extensions. Anything beyond that, loggers may see their bidding privileges suspended.

“The winter harvesting season the last couple years has been poor. Also, most of these contracts that were purchased three, four years ago were purchased at a fraction of the cost of what timber is being sold for today,” said Harris. “The longer they hold these, the greater the profit return they’re going to have on them.”
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Alternative plans sought for Oregon's oldest state forest

Alternative plans sought for Oregon's oldest state forest | Timberland Investment | Scoop.it

In a public meeting that exposed deep concerns about global warming and deforestation, Oregon's top elected state leaders on Tuesday postponed a decision on the proposed sale of the Elliott State Forest to a timber company, instead making a pitch for alternatives that would maintain public ownership of the state's first public forest.

 

Speaker after speaker came from cities, towns and farms to pack the meeting room in the Keizer Community Center, north of Salem. They beseeched their leaders to reject the sale of the 82,500-acre forest in the Coastal Range to Lone Rock Timber Co. and its tribal partners.
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The sale of the forest was proposed because timber harvest revenues that go into a school fund have dropped in recent years.
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Some school board representatives backed the sale, saying the $221 million it would fetch should go into the Common School Fund. Several speakers recommended that if the sale does not go forward, that the forest be removed from the Common School Fund portfolio so it would not suffer negative impacts with declining timber harvests.

 

Lone Rock, based in Roseburg, had said it was confident that it could turn a profit by extracting at least 35 million board feet per year from the forest while providing protections for older forests, streams, recreation opportunities and local jobs. The state has not logged nearly that amount in recent years. State officials have been unable to harvest much timber from the forest in recent years because of environmental protections and lawsuits.

"It is a sustainable harvest level based on the estimated 70+ million board feet of forest growth each year," Jake Gibbs, director of external affairs of Lone Rock Resources, told The Associated Press in an email.

 

After years of sustained gains since 1997, net revenue from the forest fell from $5.8 million in 2012 to losses of $3.3 million in 2013 and $1.8 million in 2014, the Oregon Department of State Lands says. But 2015 saw gains. This year through 2019 are expected to be borderline.

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Rosboro of Springfield announces its sale, starting with timberlands

Rosboro of Springfield announces its sale, starting with timberlands | Timberland Investment | Scoop.it
Wood products manufacturer ­Rosboro, one of Springfield’s oldest employers, has sold its timber holdings, and the rest of the firm, including its large mill on Main Street in Springfield, could be sold by the end of the year.

Rosboro announced Tuesday that it sold about 95,000 acres of timberlands in ­Western ­Oregon to an entity managed by Campbell Global LLC, based in Portland.

Privately held Rosboro did not disclose a purchase price. Based in Springfield since 1939, Rosboro also said it expects to sell its factories, ­including mills in Springfield, but did not offer details about a sale except that the deal could be completed by the end of December.

“We especially want to acknowledge and show our strong appreciation for our customers, suppliers, contractors and employees for the incredible relationship and partnership we have had over the years,” Chief Executive Scott ­Nelson said in a written statement.
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Why Colleges Are Getting a 'C' in Investing

Why Colleges Are Getting a 'C' in Investing | Timberland Investment | Scoop.it

A Wall Street bond researcher named ­David Swensen took over the endowment at Yale University in 1985. The portfolio, then a little over $1 billion, was 80% invested in U.S. stocks and bonds, exactly in line with the typical college endowment.

 

Swensen completely remade it. Harnessing a rare investing talent, but also adapting it to the efficient-markets doctrine that had become an article of faith in academia, Swensen redeployed close to 90% of Yale’s fund into a diverse mix of assets stretching across the investment universe: venture capital, leveraged buyouts, hedge funds, foreign equities, real estate, natural resources such as timber. The result was a revolution in the quiet but competitive world of university endowments. Over the three decades through June 2015, ­Swensen’s portfolio grew at an annual pace of 13.9%, outpacing those of his peers and all the relevant benchmarks.
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Not surprisingly, other schools rushed to adopt Swensen’s approach—now known as the “endowment model.” Today more than half (52%) of endowment assets are invested in so-called alternatives (everything from private equity to real estate) while only 16% are deployed in what was formerly the bedrock investment class, U.S. listed stocks, according to the 2015 National Association of College and University Business Officers (Nacubo)/Commonfund report.

 

Swensen, for his part, still has the magic. Over the past two decades Yale’s endowment has outperformed the average school’s by a whopping five percentage points. Over 10 years, Yale earned 8.1%—three points better than the average.

 

But elsewhere in academia, people are beginning to wonder whether that remarkable record has less to do with Swensen’s model than with the manager himself. That’s because few schools have been able to pull off what Yale’s investing wizard has accomplished. Through 2016, the average university endowment has had a poorer record—over one year, three years, five years, and 10 years—than the average public pension fund, according to the Wilshire Trust Universe Comparison Service.
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Even Yale’s ancient Ivy League rival has struggled of late. Under the tutelage of Jack Meyer, its endowment chief from 1990 to 2005, Harvard’s returns sizzled. But in the past decade, the $35.7 billion endowment fund has returned only 5.7% a year, significantly underperforming the passive 60%/40% blend it uses as a yardstick. Harvard Management Co., which runs the endowment, has been rocked by turmoil. It recently hired a new CEO—its fourth in a decade—and talented investors have departed amid embarrassing publicity over disappointing performance and eye-catchingly generous bonuses.
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So why isn’t the endowment model performing? There seem to be three parts to that answer—all beginning with the letter “C,” which is a fitting grade for the investment performance of universities today.

 

The first is unnecessary complexity. It isn’t just that schools are chasing ever more elaborate portfolios; it’s that they’re doing so with an ever more complex roster of overseers.
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Second is competition: It has whittled away the edge, even for the bigger and elite schools that have typically racked up the best results. Capital has poured into private equity funds, raising deal prices and reducing returns, which now mirror those of public markets.
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And the third, and perhaps most important, is conceptual. The endowment model—which emphasizes broad diversification—emerged from the dogma of efficient markets: the notion that, generally speaking, markets are good at internalizing available information, and therefore they generally price shares appropriately. That makes it hard to beat the market consistently over any long period. Nonetheless, many endowment managers try to outperform anyway.

 

Not everyone considers this a conceptual muddling. Andrew Golden, a Swensen disciple who manages the endowment at Princeton, says it’s not contradictory to respect the market as mostly efficient while trying to beat it. To the extent there are at least a few inefficiencies scattered about, presumably somebody can make money off of them.

 

And this is where the rub on that third “C” comes in: Swensen’s idea has always been that he could outperform by exploiting an edge. “If you don’t have an edge,” says Bruce Zimmerman, who just stepped down as head of the mammoth University of Texas endowment, “you ought to be simple and passive.”
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Then there is the edge that flows from research. Mendillo, Harvard’s former endowment chief, discovered that pulp companies were eager to get timber assets off their books. Realizing she was dealing with motivated sellers, she scooped up timber at an attractive price.

 

The problem for smaller or less connected funds that copy the strategies of the big endowments is that price inefficiencies last only a short while. By the time that copycats invest in a well-marketed “timber fund,” the asset is likely to be fully priced.
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One of the few schools to shun the Yale model, Southern Virginia University, has one of the best records anywhere. Jesse Seegmiller, the chief investment officer who oversees the school’s tiny $1.1 million endowment, says simply, “We have a discipline and we stick to it.” The discipline consists of bottom-up selection of a relative handful of stocks. It does not own private equity or hedge funds. “The idea that alternative investments are an ‘asset class’ just doesn’t make sense,” says Seegmiller. Timber is a commodity; hedge funds are a legal framework for investing in any of a number of asset classes. Private equity is simply equity; indeed, over the past decade the average private equity fund has merely kept pace with public equities.
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In truth, many academic institutions—small and large—would be best off investing by way of low-fee index funds, as Yale’s Swensen has argued the average small investor should do. But then few people think of themselves as average, and few endowment managers do either. If only they knew.

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Ohio Police & Fire timber investments to be included in new real assets allocation

The Board approved a recommendation to convert the timber allocation to a real assets allocation consisting of timber, infrastructure and agriculture. The target allocation for real assets will be 5.0 percent of the total portfolio, which was the same as the target for timber.

As of 10/31, the timber allocation was valued at $290 million, or just over 2.0 percent of the total portfolio. Broadening the timber space to include infrastructure and agriculture should allow for more diversification, better risk-adjusted returns and an improved ability to implement the mandate. It has been difficult to indentify acceptable timber opportun ities that would allow OP&F to reach the five percent target. OP&F’s first timber exposure came in spring 2012.

No RFP will be issued and opportunities will be brought to the Board after evaluation from staff and consultants.Click here to edit the content

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Softwood lumber hostilities resume as U.S. group files complaint

Softwood lumber hostilities resume as U.S. group files complaint | Timberland Investment | Scoop.it

The U.S. Lumber Coalition has filed a petition asking the U.S. Department of Commerce to investigate Canadian softwood lumber shipments with an eye to potentially levying new duties, kicking off a fresh round of litigation between two countries with a long history of trade disputes over wood.

The petition is said to be hundreds of pages long and its exact contents are not yet known.

But the arguments it makes are expected to be familiar to the Canadian industry, which has had to defend itself against complaints of unfair subsidization and dumping in the past.

In a news release, the U.S. lobby group alleged that Canadian provinces provide trees to lumber producers for a fee that is below the market value for timber, which Canada denies.

"Canadian lumber is being sold for less than fair value in the United States," the release said. Friday's petition details the alleged injury suffered by U.S. industry and workers because of "unfair" imports.

After the previous softwood lumber agreement expired last year, it said, Canadian imports surged from 29.5 per cent of U.S. total consumption in the third quarter of 2015 to 33.1 per cent in the fourth quarter of the same year and to 34.1 per cent so far in 2016 — at the "direct expense" of U.S. producers.

But U.S. construction has also been on the rise, and the Canadian lumber industry maintains its American counterparts  cannot fulfil the requirements on its own. 

The petition blames Canadian imports for a drop in lumber prices. Mill closures and job losses resulted, it said, calling on the United States to "impose duties to offset the harm."

The move was previewed Thursday evening in a statement issued by a spokesman for International Trade Minister Chrystia Freeland.

"Canada is prepared for any situation, and our government will vigorously defend the interests of Canadian workers and producers," Alex Lawrence wrote.

"‎‎Our softwood lumber producers and workers have never been found in the wrong; international bodies have always sided with our industry in the past."

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Early U.S. softwood lumber finding stokes fear of job losses in Canada

Early U.S. softwood lumber finding stokes fear of job losses in Canada | Timberland Investment | Scoop.it

The U.S. International Trade Commission says it has found there was a reasonable indication that softwood lumber products from Canada materially injured American producers, setting the stage for the imposition of preliminary duties that softwood producers fear could impact Canadian jobs.

 

The trade commission announced Friday that it made an initial determination of harm from Canadian lumber that is “allegedly subsidized and sold in the United States at less than fair value.”

It said the U.S. Commerce Department will continue anti-dumping and countervailing duty investigations launched Dec. 16 into the imported products.
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The preliminary finding could force U.S. importers of Canadian lumber to pay cash deposits to cover preliminary countervailing duties in early March, followed in mid-May with deposits for any anti-dumping duties, unless the deadlines are extended.
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The decision to investigate is in response to petitions filed in November from the U.S. Lumber Coalition, which alleges that provincial governments, which own most of Canada’s vast timberlands, provide trees to Canadian producers at rates far below market value, along with other subsidies.
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Paul Quinn of RBC Capital Markets said the Americans will likely initially impose a high duty to get Canada to negotiate a deal over a long period that’s favourable to the U.S.

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Hong Kong Regulator Sues StanChart, UBS Over 2009 Timber IPO

Hong Kong Regulator Sues StanChart, UBS Over 2009 Timber IPO | Timberland Investment | Scoop.it

Hong Kong’s securities regulator has filed a lawsuit against Standard Chartered Plc, UBS Group AG and audit firm KPMG LLP over an initial public offering by China Forestry Holdings Co. in 2009.

 

The Securities and Futures Commission is seeking unspecified damages for minority shareholders related to alleged “market misconduct” by the defendants connected to China Forestry’s IPO prospectus, and the company’s financial statements for 2009 and for the first half of 2010, according to documents filed with Hong Kong’s High Court on Jan. 16.

 

 
Standard Chartered and UBS were joint sponsors of China Forestry’s $216 million first-time share sale in November 2009, while KPMG was its auditor, data compiled by Bloomberg show. The two banks had previously disclosed potential regulatory action for their work on unspecified IPOs in Hong Kong. UBS said the SFC move could result in its suspension from working on first-time share sales in the city.

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The regulator is seeking compensation from the defendants to “restore” independent minority shareholders who had bought China Forestry stock and held the equity at the time trading was suspended in January 2011, according to the court documents.

 

China Forestry has been halted from trading since then and was in the process of delisting after financial irregularities were discovered. Liquidators were appointed for the logging company in June 2015 by a court in the Cayman Islands, where it is incorporated.

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Conservation groups team up to buy forestland in Piscataquis County

Conservation groups team up to buy forestland in Piscataquis County | Timberland Investment | Scoop.it

The Forest Society of Maine has teamed up with the Appalachian Mountain Club and the Open Space Institute to acquire and conserve 4,358 acres of forestland surrounding Silver Lake and 12 miles of the West Branch of the Pleasant River in Piscataquis County.
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The acquired lands are visited each year by thousands of people from Maine and afar for fishing, hiking, camping, paddling, hunting, snowmobiling and other recreational activities, according to a joint statement from the conservation groups. The groups noted that the property's campsites and access to the river and lake are amenities important to the region's recreational and tourism economies."Public recreational access is now guaranteed forever," the groups stated.

 

The project safeguards vital river habitat for Eastern brook trout and Atlantic salmon spawning, and habitat for American black duck, Canada lynx, Northern long-eared bat, wood turtle, bald eagle and many other species of state and national significance. The project also protects a 400-acre mature silver maple floodplain forest — one of the largest and best examples in Maine. The newly conserved lands are adjacent to the historic Katahdin Iron Works and help to buffer this state-owned site. "The remarkable mix of ecological and recreational values found here made this a high priority project for us, especially as it is fills a key gap in the network of two million acres of already conserved lands in this region of Maine's North Woods," said Alan Hutchinson, executive director of the Forest Society of Maine.

 

With the acquisition complete, the Appalachian Mountain Club now owns these lands and the Forest Society of Maine holds a conservation easement on the property. The Silver Lake – Pleasant River lands are adjacent to AMC's 70,000 acres of other conservation holdings in the area, which provide the focus for its Maine Woods Initiative, an innovative approach to conservation that combines outdoor recreation, resource protection, sustainable forestry, and community partnerships. The Forest Society of Maine worked with Conservation Forestry — a New Hampshire-based timber investment firm and the owner of these lands since 2009 — to develop a conservation future for the property, recognizing the special ecological and recreational values found there.

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Chart of the Month: Canadian Lumber Imports

Chart of the Month: Canadian Lumber Imports | Timberland Investment | Scoop.it

Despite the sunsetting of the Softwood Lumber Agreement (SLA), Canadian lumber imports to the US have risen by over 82 percent since the Great Recession and the subsequent bottoming of the housing market in 2009. Interestingly, even though total lumber imports from Canada are 30 percent lower than they were at their peak in 2005, lumber from Canada continues to make up a significantly higher percentage of new, single-family housing units.

 

The exchange rate effect cannot be ignored when analyzing this chart; the US dollar has remained strong against the Canadian dollar, which has resulted in cheaper Canadian lumber over the last two years. Also of note, the period between 2006-2015—when the SLA was in effect as a trade policy—the Canadian “market share” of US housing construction was at its highest, reaching a peak in 2011. While this market share has abated during 2012-2016, levels remain above the historic average, which signifies that, relative to today’s housing market, Canadian market share is strong.

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Pope Resources Closes $381 Million Timber Fund

Pope Resources Closes $381 Million Timber Fund | Timberland Investment | Scoop.it
Pope Resources (NASDAQ: POPE) announced today that its subsidiary, Olympic Resource Management LLC (ORMLLC), has closed ORM Timber Fund IV (Fund IV), a private equity timber fund, with $381 million of committed capital, 15% of which, or $57 million, will be co-invested by Pope Resources. ORMLLC is actively looking for timberland properties to acquire on behalf of Fund IV, which will invest in commercial timberlands in the Pacific Northwest region of the U.S.

"We are pleased to announce this capital raise which represents the fourth private equity timber fund that we have created since 2005 when we began executing on the strategy of matching our own capital with that of third parties interested in investing alongside an experienced Pacific Northwest timberland owner," said Tom Ringo, President and CEO. "We currently have $364 million of timberland assets under management in two funds and the closing of Fund IV represents yet another significant step forward in the execution of our private equity timber fund strategy. Through our co-investments in the funds we have been able to diversify our capital over a larger timberland portfolio than we could acquire on our own, allowing us to achieve economies of scale that reduce the cost of managing Pope Resources' 100%-owned timberland while simultaneously earning fees from management of fund assets."
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Comments on the Liquidity of Timberland Investments - Forisk

Comments on the Liquidity of Timberland Investments - Forisk | Timberland Investment | Scoop.it
What worries investors?  One way to think about liquidity is to consider the situations where, as an investor, it might matter. If you have an asset that you want to sell, how long would it take and would you net a satisfactory price (or return)? These two questions get to the heart of the matter: speed and price. The inability to move an asset quickly may “cost” you something, and the need to accept a “below market” price because you are in a hurry also “costs” you something. In an emergency, a lack of liquidity affects your ability to extract value, and in the case of a market squeeze or crash, where sufficient buyers and sellers do not exist, you may not be able to move your asset at all.

In finance and investing, liquidity is an idea, a theoretic construct, that affects certain folks in certain situations; it does not affect everyone all of the time. In fact, liquidity only affects a small number of folks with any frequency. Some folks worrying about it may squander time and energy and, possibly, resources trying to protect themselves. Liquidity in practice is only a problem when you don’t have it or can’t get it, so from a portfolio perspective, the best strategy may be to account for liquidity at the portfolio level in advance.

This would be the way to think about timberland. It’s not a super liquid asset, so account for this fact up front and then table it as an issue. Maintain access to some cash or more liquid securities. While it helps to plan in advance how you might unload the timberland in an emergency, you can get part-way there by breaking down the forest asset into its salable components.  These include timber and hunting rights and choice parcels. Every sizable timberland investment represents, in and of itself, a diversified portfolio of smaller assets. In most cases, the issue of liquidity for timberland is not an all or nothing proposition.
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EIA begins monthly reporting of wood pellet data

EIA begins monthly reporting of wood pellet data | Timberland Investment | Scoop.it
The U.S. Energy Information Administration has published the initial results of a new survey launched in January 2016 to gather information on wood pellets and other densified biomass production, sales and inventory.

The survey gathers data from operating pellet plants in the U.S. Facilities with an annual capacity of 10,000 or more tons report data monthly, while smaller facilities file annual reports.

According to the EIA, it conducted the first survey of densified biomass fuel manufacturers in January, with data collected from 119 facilities. Fourteen of those facilities were planned or under construction, and expected to begin operating within one year. Seventeen of the facilities had capacity of less than 10,000 tons per year, and are not required to complete the EIA’s monthly survey. The remaining facilities reported their production and sales data for January 2016.

The data shows the U.S. currently has 11.52 million metric tons of existing pellet production capacity, with an additional 2.74 million metric tons planned or under construction.
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Forest Investment Associates and The Molpus Woodlands Group Acquire 295,000 Acres of Timberland from the Hancock Timber Resource Group

Forest Investment Associates and The Molpus Woodlands Group Acquire 295,000 Acres of Timberland from the Hancock Timber Resource Group | Timberland Investment | Scoop.it

Forest Investment Associates (“FIA”) and Molpus Woodlands Group (“Molpus”), two timberland investment management organizations, today announced the joint purchase of approximately 295,000 acres of timberlands in Arkansas and Texas from the Hancock Timber Resource Group (“HTRG”).

 

The property was originally part of HTRG’s acquisition from TimberStar in 2009. Primarily consisting of high-quality pine plantations, the timberlands provide timber products to industry leaders including International Paper, West Fraser and Georgia-Pacific through long-term supply agreements that have been in place since 2006. FIA’s clients acquired approximately 146,500 acres in the states of Arkansas and Texas and Molpus’ clients acquired approximately 148,500 acres in the same states, and each acquisition will be separately managed by FIA and Molpus.

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Wyoming sells land in Grand Teton National Park to feds for $46M

Wyoming sells land in Grand Teton National Park to feds for $46M | Timberland Investment | Scoop.it

A $46 million deal between Wyoming and the Interior Department put a square mile of land inside Grand Teton National Park into U.S. government hands Monday, eliminating the possibility that the pristine property with breathtaking views of the Rocky Mountains' Teton Range might be developed.

 

The sale ended years of drama in which Wyoming officials sought to sell the land called Antelope Flats in the Jackson Hole valley while federal officials and environmentalists worried it could end up privately owned.
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The open area of sagebrush was among a number of private and state-owned land called inholdings that never became part of Grand Teton when the park was established with its current boundaries in 1950.

 

Few inholdings remain in Grand Teton but the remaining ones include another square-mile state section on the park's eastern boundary that also has stunning mountain views. It is valued at about the same price as the parcel that was sold but could be more attractive to developers because a road runs through it.

Negotiations for the federal government to buy or trade other lands for that parcel are underway.

 

Wyoming officials have leased the state's Grand Teton inholdings for grazing but took in very little revenue compared to the potential value of the land on the open market. Jackson Hole has some of the highest property values in the western Rocky Mountains.

Sam Radcliffe's insight:

Kind of off-topic but I couldn't resist a $71K per acre deal.

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Have we seen the end of productivity improvement with mechanised harvesting?

Have we seen the end of productivity improvement with mechanised harvesting? | Timberland Investment | Scoop.it
Researchers show that the next wave of productivity improvement will come from human factors.

There has been recent concern that the continuous improvement of forest harvesting has stagnated or possibly decreased in the Nordic countries. A modern problem is not the lack of knowledge, but the inability to put the knowledge into practise. Through a literature review, researchers examined whether human factors can improve the performance of harvesting systems by simulating continued performance improvements. The researchers focussed on mechanized cut-to-length (CTL) operations, with specific reference to the operation of the single grip harvester and the harvester-forwarder system. The researchers created a conceptual framework to allow the analysis of human, technology, organization and environmental interrelated elements. The researchers discovered that the correct abilities, skills, techniques and training alone are not sufficient to ensure the high performance of a logging system.

It was discovered that education, training, semi-automation, shift scheduling, harvester-forwarder cooperation and inter- and intra- organizational knowledge exchange were all very important in order to obtain improvement and development. Automation specifically will introduce a system change that will have a similar effect on the forestry industry as that change which occurred when mechanisation was introduced into logging. Semi-automated solutions and increased decision support will pre-empt the move to automation, which is already a stated goal for countries such as Sweden. In order to gain productivity benefits, research is required into methods, interfaces, forms of interaction, risk analyses and automation technology.

The research was published in the International Journal of Forest Engineering, Vol. 27 (2), 2016. The authors are C Häggström and O Lindroos. Source:http://dx.doi.org/10.1080/14942119.2016.1170495
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Austin’s Forestar Group sells off $100 million in timberland

Austin’s Forestar Group sells off $100 million in timberland | Timberland Investment | Scoop.it
Austin-based Forestar Group is selling more than 58,000 acres of timberland in Georgia and Alabama in a deal that should net the company more than $100 million, according to a Tuesday securities filing.

The company – through its subsidiaries — has agreed to three separate timberland sales, according to filings with the U.S. Securities and Exchange Commission.

Those deals are:

*The sale of 26,319 acres in Georgia to SPP Land for $43.426 million.

*The sale of 12,043 acres in Georgia and Alabama to an investment fund managed by Timberland Investment Resources, LLC for $23.73 million.

* The sale of 20,143 acres in Georgia to a different investment fund managed by Timberland Investment Resources, LLC for $37.42 million.

The company said the three transactions should close in the fourth quarter, and would combine to net it $104.58 million.

Forestar Group, which was spun off from the former Temple-Inland Inc. in 2007, operates in real estate and other natural resources and has interests in dozens of residential and mixed-use real estate projects.

The company said in April that it would sell off some of its non-core investments as part of a plan to address shareholder concerns. Last week, the company said that in the past year it has sold off $425 million in non-core assets and reduced its outstanding debt by more than $320 million.
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New Forests launches third Australia New Zealand forestry investment fund

New Forests launches third Australia New Zealand forestry investment fund | Timberland Investment | Scoop.it

Australian-based fund manager New Forests today announced the launch of its third investment fund dedicated to Australian and New Zealand forestry investment, with more than AUD 660 million in capital commitments.

 

The Australia New Zealand Forest Fund 3 (ANZFF3) will invest in a diversified portfolio of hardwood and softwood plantation assets in Australia and New Zealand. The fund mandate also allows for investment in processing or infrastructure facilities, such as sawmills, ports, and bioenergy facilities.

 

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New Forests manages more then 2.5 billion of investments in Australia and New Zealand and has funds, assets under management, and committed capital of more than AUD 3.6 billion globally. The company’s investments and operations include more than 780,000 hectares of plantation forestry and land as well as the Timberlink wood processing, sales, and distribution business, the forest management business Forico, and the international timber marketing business New Forests Timber Products. ANZFF3 will be managed to reflect New Forests’ longstanding commitments to sustainable forest management, third-party forest certification, and responsible investment.

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Election not expected to slow move to alts

Election not expected to slow move to alts | Timberland Investment | Scoop.it

The election of Donald J. Trump as the next U.S. president has not changed economic or market expectations enough to slow the migration to illiquid assets by institutional asset owners searching for investment returns.

 

But it does appear to have pushed some investors to begin research into considering inflation-sensitive assets.

 

“We've seen investors stay the course. (Pension funds) are long-term investors that are very focused on their liability streams and their funded status. So they have investment policies built for the long term,” said Josh Levine, head of alternatives specialists for the Americas at BlackRock (BLK) Inc. (BLK)
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That said, the BlackRock managing director noted he's seeing clients interested in exploring assets that are sensitive to inflation. “They're beginning to research some themes,” Mr. Levine said. “But we're in the first inning on that.”
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“Investors have been going more into private markets to achieve returns. I don't think you're going to see that changing,” said Catherine M. Konicki, a partner and head of the endowment and foundation practice at NEPC in a phone interview. She added that because the lifespan of most private market investments averages 10 to 12 years, most investments in illiquid assets will outlast any short-term market volatility caused by a presidential administration of four to eight years.

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