Timberland Invest...
Follow
Find
46.1K views | +64 today
 
Scooped by Sam Radcliffe
onto Timberland Investment
Scoop.it!

China's Insatiable Demand For Timber Destroys Cambodia's Forests

China's Insatiable Demand For Timber Destroys Cambodia's Forests | Timberland Investment | Scoop.it
Cambodia's forests are being destroyed at a dizzying pace, with much of the wood destined for China. Much of the logging is carried out illegally — and people who get in the way of the loggers face violence and in some cases death.
more...
No comment yet.
Timberland Investment
Timber Industry | Deals & Transactions | Investment Rationale | Financial Performance | Investors | Asset Managers
Curated by Sam Radcliffe
Your new post is loading...
Your new post is loading...
Scooped by Sam Radcliffe
Scoop.it!

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.


We encourage readers to interact with our site:

  • Click on the Follow  ere, and Scoop.it! will deliver a summary of our new content to your inbox every morning.
  • Alternatively, subscribe to the RSS feed   
  • Click the Share button above or at an individual story to Tweet or post a link on Facebook.
  • Click the Suggest button above to propose content for inclusion in the magazine. If the story is accepted, you will be credited as the source with a link that can drive traffic to your own website, Facebook page, blog, etc.


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


more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

New study: Global warming triggers surge in tree growth

New study: Global warming triggers surge in tree growth | Timberland Investment | Scoop.it

Some trees are growing up to 70 percent faster than just a half century ago, as global warming supercharges their metabolism, German researchers report in a new study published in Nature Communications


Three decades ago, forest dieback was a hot topic, with the very survival of large forest ecosystems seemingly in doubt. But instead of a collapse, the latest studies indicate that forests have actually been growing at a faster rate. The new data from the Technische Universität München comes from forest plots that have been closely monitored since 1870. The forested areas are also representative of the typical climate and environmental conditions found in Central Europe.


“Our findings are based on a unique data pool,” maintains Prof. Hans Pretzsch from TUM’s Chair for Forest Growth and Yield, who headed up the study.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

California and Quebec announce first joint cap-and-trade auction

California and Quebec announce first joint cap-and-trade auction | Timberland Investment | Scoop.it

The California Air Resources Board and the Québec Ministry of Sustainable Development, Environment and the Fight against Climate Change today announced their first joint cap-and-trade auction will take place November 19, 2014.


The two jurisdictions have worked together for several years to ensure their cap-and-trade regulations are equally stringent and can be integrated. The two programs officially linked on January 1, 2014, and have been working toward a joint auction. California held its first cap-and-trade auction in November 2012 and Quebec held its first auction in December 2013.


“This joint auction is a logical next step in our efforts to develop a cost-effective, inter-governmental model for reducing greenhouse gases,” said CalEPA Secretary Matt Rodriquez. “California has worked closely with Quebec to develop our cap and trade programs with this kind of linkage in mind.” 


The November joint-auction will be held in the same online platform both parties have used for their individual cap-and-trade auctions. The platform was tested by stakeholders during a joint practice auction in August of this year. Carbon allowances sold in the auction may be used in either the California or Québec cap-and-trade programs. All participants must be registered in the Compliance Instrument Tracking System Service (CITSS) and the auction platform.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Timbervest LLC Acquires More than 13,000 Acres of Timberland for Investment Fund

Timbervest LLC Acquires More than 13,000 Acres of Timberland for Investment Fund | Timberland Investment | Scoop.it

Timbervest LLC, an Atlanta-based company that manages timber-related assets and investments, today announced it acquired 13,220 acres of timberland for its Timbervest Partners III, LP (TVP III) investment fund. The $400 million commingled fund consists of 250,000 acres of timberland located throughout the country, and is comprised of institutional and high-net-worth investors.
***
Effingham, Georgia Property

The approximately 2,550 acres of industrial grade timberland in southeast Georgia is located 30 miles northwest of the Port of Savannah and 15 miles north of Interstate 16. Accessible by county roads, the Effingham property is a large contiguous tract that is predominantly merchantable pine plantations with flat terrain and little elevation change. A portion of the wood fiber harvested from the property will possibly be exported to Europe as wood pellets.
***
Tennessee Select Property

Located 80 miles from Nashville in northwest Tennessee, the 9,400-acre property consists mostly of mixed hardwoods and loblolly pine plantations. Comprised of 20 non-contiguous parcels of institutional grade timberlands, the property’s diverse terrain includes hill country and some steep elevations with beautiful viewsheds of Kentucky Lake.
***
Green Acres, Vermont Property

The east central Vermont property is approximately 1,270 acres of mixed hardwood timberland, and consists of three non-contiguous tracts. The property is 20 miles from Montpelier in an area that is heavily forested and scattered with small family farms. Green Acres’ high quality hardwoods are a result of the strong forest management practices used by previous owners. The tracts include flat terrain and gently rolling hills, and are accessible by paved frontage roads on portions of the property. Additionally, a well-maintained internal road infrastructure allows for easy access to most areas.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

UK timberland fund aimed at global pension funds

UK timberland fund aimed at global pension funds | Timberland Investment | Scoop.it

FIM Services, the UK-based forestry and renewable energy investment manager, has launched its first institutional fund, the FIM UK Timberland Fund, with an initial target of £100m (€125m) to be raised from a number of cornerstone investors, including pension funds worldwide.


The fund is intended to give institutions the chance to invest in high-quality, well-located commercial plantations, taking advantage of current opportunities FIM has in the pipeline.


Anthony Crosbie Dawson, forestry portfolio manager at FIM, said timberland was an attractive asset for pension funds to consider because it had no correlation with equities, and served as a hedge against inflation.
***
Crosbie Dawson said the fund would select high-yield assets well located for timber markets, with good infrastructure and unconstrained access.

Assets will also be selected on their potential for ‘higher and better use’ (HBU), particularly in relation to wind farms.
***
FIM will acquire commercial plantations within the UK, which consist primarily of Sitka spruce – the fastest-growing conifer in the UK – and with the largest number of end-uses. Plantations will be located mainly in Scotland and Wales, the wettest parts of the UK, where the trees grow the quickest.
***
FIM, which has more than £500m under management, also runs two funds for retail investors – FIM Forest Fund I and FIM Sustainable Timber and Energy – with £63m and £99m, respectively, under management.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Campbell Global, focused but flexible: Top Workplaces 2014

Campbell Global, focused but flexible: Top Workplaces 2014 | Timberland Investment | Scoop.it

Campbell Global doesn't seek the spotlight. The firm prefers to tend to its knitting, acquiring and managing forestland for investors. But, by all accounts, the people who work there are a happy bunch, which is why the company is being honored this year as one of The Oregonian's Top Workplaces. Employees say their opinions are respected, managers are approachable and the workplace friendly and flexible.
***
The 33-year-old company, known until this spring as The Campbell Group, manages more than 3.1 million acres of timberland in the U.S. west and south, and in Australia. It has more than 300 employees, ranging from people who tend trees to those who pull the trigger on million-acre purchases of forested land. Chief executive John Gilleland leads a six-member executive team based in downtown Portland.
***
Founder Duncan Campbell sold a stake in the Campbell Group in 1989 to United Asset Management. United Asset was acquired 11 years later by Old Mutual Asset Management, which bills Campbell Global as an affiliate. Campbell Global's assets are marketed to institutional buyers.


"We place a high value on relationships with clients and with our employees," Gilleland said. "Receiving this award is a great affirmation of those values."

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Forest products industry puts $8 billion into Maine's economy

Forest products industry puts $8 billion into Maine's economy | Timberland Investment | Scoop.it

At quick glance, the aerial view of Maine’s forest products industry looks pretty much the same now as it did 20 years ago.


First and foremost are the 17.6 million acres of forest that comprise 89% of the state’s total acreage, making Maine the most heavily forested state in the country. The U.S. Forest Service’s 2012 tree census reported 24 billion trees of at least an inch diameter growing on all those acres — an increase of 6.3% since 2007 and the equivalent of 18,688 trees for each of the state’s 1.3 million residents. For the past 22 years, Maine has harvested an average of 6.7 million cords each year.


Then and now, no question about it, Maine’s forest products industry is a major sector in the state’s economy, with its current economic impact pegged at $8 billion. Although no one questions that Maine’s forest products industry is a major business sector, it would be a mistake to conclude from a quick aerial view that not much has changed over the past 20 years. “This is not your grandfather’s forest products industry anymore, or even your father’s,” says Patrick Strauch, executive director of the Maine Forest Products Council since 2004.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Allstate Bets on Timber, Property to Help Annuity Result

Allstate Bets on Timber, Property to Help Annuity Result | Timberland Investment | Scoop.it

Allstate Corp. is betting on timber and real estate to boost returns at a struggling annuity unit. “We do need to figure out what we do with our annuity business,” Chief Executive Officer Tom Wilson, said at an investor presentation today.

***

Allstate, the largest publicly traded U.S. home-and-auto insurer, has been retreating from annuities as low interest rates weigh on results.

***

In annuities, insurers profit when investment returns exceed the promised payouts to policyholders. Allstate said in its annual report that investment returns on immediate fixed annuities exceed customer payouts by 0.9 percentage points. The company will benefit when rates eventually rise, Wilson said today.


“In the meantime, we’re putting more money into alpha investments,” Wilson said. “We’re investing in things like timber and some real estate.”

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Real Interest Rates And Future Chaos

Real Interest Rates And Future Chaos | Timberland Investment | Scoop.it

The folks at Gresham’s Law just published a nifty interactive chart of real (i.e., inflation-adjusted) interest rates since the 1960s that explains a lot about today’s world.
***
Since the 2008 crisis the real rate of interest has been mostly negative, which accounts for the global boom in real assets. For someone with access to borrowed money it now makes sense to use it to buy fine art, trophy real estate, farmland, and other things that governments can’t create more of. All of these things are in raging bull markets, implying that the smart money is responding to negative interest rates exactly as you’d expect.


So what now? History as depicted here says the borrowing binge/asset bubble continues until real rates spike, either because nominal rates soar or inflation plummets. It also implies that the phase change, when it comes, will be sudden. Looking at 1975, 1980 and the volatility since 2007, it’s clear that a financial system based on fiat currencies is inherently unstable — i.e., incapable of finding a stable price for money. So the least likely scenario is a return to a nice, placid world of “normal” interest rates.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Brookfield Quarterly Research Report on TIMO's vs REIT's

Sam Radcliffe's insight:

Provided by Industry Intelligence

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

US carmakers, Brazil soy farmers drive timber fund fortunes

US carmakers, Brazil soy farmers drive timber fund fortunes | Timberland Investment | Scoop.it

US automobile production may have risen at its fastest in five years last month. But it is not enough to help out struggling Phaunos Timber Fund, for which a wet Brazilian soybean harvest, would also help reverse its somewhat disappointing performance.


The first public report by forestry consultancy Stafford Timberland of Phaunos's assets, which recommends the sale of at least one of the investments, has revealed the breadth of the influences on the performance of the portfolio. These include well-recognised drivers, such as the performance of China's construction industry, a well-documented, major timber consumer, likes its peer in the US, but whose slowdown prompted a 16% drop in lumber imports in the January-to-March period, compared with the quarter before. The impact, thanks to raised log inventory levels at Chinese ports, has been a 20-30% slump in log prices in the April-to-June quarter in New Zealand, a major timber exporter, where Phaunos Timber Fund owns 35% of forestry group Matariki.
***
Other factors influencing Phaunos's fortunes include the fate of the soybean harvest in Brazil, where it owns outright Eucateca in the major corn and soybean growing state of Mato Grosso. Eucateca, besides owning teak plantations, which it has failed in an effort to sell, provides eucalyptus as a biomass fuel for drying crops.


And US auto production is also a driver, through its consumption of pig iron which has, historically, been largely sourced from Brazil. Phaunos's 19,000-hectare Mata Mineira operation in Minas Gerais, a state better known for coffee production, provides eucalyptus logs for converting into charcoal, in turn a major component of pig iron. "[Brazilian] pig iron produced from charcoal has declined by approximately 33% since 2007, due in part to decreasing US demand and unfavourable exchange rates," Stafford said.
***
Stafford gave its insight into the Phaunos portfolio as it recommended the sale of some investments deemed "higher risk", including some which comprised immature trees too young to harvest.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

A New Rayonier, But The Same Old Problem

A New Rayonier, But The Same Old Problem | Timberland Investment | Scoop.it

For the major publicly-traded timberland owners - a list that includes Rayonier (NYSE:RYN), Plum Creek (NYSE:PCL), Weyerhaeuser (NYSE:WY), Pope Resources (NASDAQ:POPE), and Potlatch (NASDAQ:PCH) - the frustrating wait for a housing-led recovery goes on. Although Rayonier does have a relative advantage to Plum Creek with its larger (as a percentage) weighting to the Pacific Northwest and its New Zealand joint venture, not to mention the absence of wood products operations, the company can do relatively little in the face of persistent weakness in stumpage prices and sluggish demand for HBU real estate.

***

Earlier this year, Rayonier completed the spin-off of Rayonier Advanced Materials (NYSE:RYAM), the company's former specialty cellulose, ethers, and pulp business. Now, Rayonier is effectively a timberland pure-play - owning about 2.1M acres of U.S. timberland, another 200K acres designated as HBU land (to be sold for its real estate value), and more than 300K acres in New Zealand owned through a 65% interest in a joint venture with Matariki that focuses on Radiata pine for Asian export markets.


Unlike Weyerhaeuser and Plum Creek, Rayonier does not have a wood products operation. I'd call that a mixed-to-positive factor for the company. These wood product operations (which manufacture products like lumber, plywood, and engineered structural products) can generate pretty good cash flow when residential building activity picks up, but they typically command lower multiples than timberlands on a "dollar for dollar" basis.
***
Timberland operators are sort of stuck right now - because the equity markets assign a lower per-acre value to timberland acreage than actual real-time private transactions, acquiring more timberland now is a tricky move. Rayonier doesn't really need to acquire more land, particularly since it sold its lower-value Northeast lands in 2013, but adding more higher-value land in areas like the Pacific Northwest wouldn't be terrible. All told, though, Rayonier's best move is just to manage its harvests appropriately, take advantage of new opportunities to sell pulpwood (like for wood fuel pellets), and wait for prices to improve.

Sam Radcliffe's insight:

"Timberland operators are sort of stuck right now - because the equity markets assign a lower per-acre value to timberland acreage than actual real-time private transactions." Where have I heard that before? Oh, that's right, it was the reason Sir James Goldsmith targeted timber companies for hostile takeovers in the 1980's. It was the reason Wall Street pressured timber companies to divest of their timberlands in the late 1990's and early 2000's.


I happen to agree entirely with the observation that equity markets are assigning a lower value than private transactions would bring. Given the amount of institutional dry powder right now, might that suggest the time is ripe for a hostile run at the timber REIT's? The rationale has already played out twice in the last thirty years.

more...
Jack D Bridges's curator insight, August 26, 10:37 AM

https://www.youtube.com/watch?v=9MiO-2Qnm8M

 

It's a simple question: What if this is as good as it gets? Please apply that to the current state of the housing market (or at least the rate for new construction of single-family homes in the US).

 

We've had artificially low interest rates for how many years now? How many rounds of asset purchases & market operations by the Fed, along with a $4 Trillion balance sheet supporting our financial system? So, where do we go from here, then?

 

I don't mean to imply that the US will never see 1.5M housing starts again. No. I just think it's folly to consider this the baseline case, as many analysts and timber REIT CEOs think. This lot seems to forget the massive credit bubble, and how it disproportionately fed into home construction & the housing market in general (and don't forget the Fannie / Freddie role in supporting the push for homeownership, either). 

 

Now, even if the housing market doesn't catch fire again, what does this mean for timberland owners? Since wood baskets are hyper local, it really depends on where one looks. For the PNW, as long as China / Japan / Korea need fiber, and it remains a desirable place to live, the market dynamics shouldn't change a whole lot. It's a very competitive marketplace--with industrial users, TIMOs, and land conservancies all jockeying for prime land.

 

For the SE, broadly speaking, a slow uptrend or steady annual home starts number might mean more deferred harvests. Or, as Sam Radcliffe keenly observes, it could see large investors in the timber REITs clamor for unlocking value in other ways (M&A). 

 

I'm not so sure Wall Street is keen to pursue hostile take-over & unwinds of such varied assets as the timber REITs. Why? The public / private valuation per acre spread that Sam notes isn't a simple thing to arbitrage. It would take loads of capital--and even more time.

 

Even if one stores value on the stump during the liquidation of hundreds of thousands of acres, such a wave of sales would surely depress prices in the short-to-intermediate term. I suppose the cost savings from downsizing from a public REIT (bye-bye investor relations staff, a huge HR department, etc.), might help--especially if one chops the salaries of those in charge of this mighty unwind.

 

But, the purchase and profitable parsing of a huge timber REIT is beyond what most I-banks are equipped to do these days. Those guys would much rather play stalker to unprofitable start-ups in Palo Alto for a chance at the next hot IPO. Wall Street gets much higher fees for crafting myths and telling tales about unicorns, than it does for selling transparent, sober businesses like forest product concerns. 

 

Thanks again to Mr. Sam Radcliffe (prentissandcarlisle.com) for starting yet another interesting discussion. I'm sure it's one we'll revisit again in the future.

 

JDB

 

 PS. If any bankers happen to read this, and want to pitch buying / unwinding a timber REIT, don't hesitate to get in touch. I'm looking for a job at present, and would be happy to consult on such a massive undertaking. Seriously.

 

 

 

 

Scooped by Sam Radcliffe
Scoop.it!

China plans to establish strategic timber reserves over 14 million hectares by 2020

China plans to establish strategic timber reserves over 14 million hectares by 2020 | Timberland Investment | Scoop.it

In order to balance timber supply and demand and guarantee national timber security China plans to establish, by 2020, strategic commercial timber reserves over 14 million hectares in 25 provinces including Guangxi, Guangdong, Hu’nan, Sichuan, Guizhou, Yunnan, Inner Mongolia Autonomous Region, Liaoning, Jilin and Heilongjiang, ITTO reported.


Of the 14 million hectares, 4.5 million will be new plantations, 5 million will be improvement of existing mature forests and a further 4.5 million hectares will require intensive management of young and maturing forest. The aim is to create a base yielding an annual average volume of around 142 million cubic metres.


According to the China National Timber Strategic Reserve Production Base Plan (2013-2020), 1.87 million hectares will be established in Guangxi Province to yield 13% of the target production.

Sam Radcliffe's insight:

For context, 14 million hectares is nearly twice the combined acreage of the four major timber REIT's -- Plum Creek, Potlatch, Rayonier and Weyerhaeuser.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Can bioenergy replace coal?

Can bioenergy replace coal? | Timberland Investment | Scoop.it

Like all renewable energy in the European Union, bioenergy has struggled against low-priced coal imports, low carbon dioxide prices in the emissions-trading system, and an economic and regulatory backlash against renewable-energy policies, including substantial cuts in government support. But don’t count out biomass-based energy just yet. Although today it fails to compete on cost with other renewables such as wind and solar, we believe bioenergy not only has the potential to significantly improve but could even become cost competitive with coal.

***

How can that happen? We believe the levelized cost of bioenergy—its cost per kilowatt-hour—has the potential to be reduced by almost half by 2025, making bio-based electricity close to competitive with coal depending on the type of plant. While there’s no denying this would require significant effort, it doesn’t require technological breakthroughs but rather simply making better use of the opportunities already at hand.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Wisconsin: sales of timber on state land up 8%

Wisconsin: sales of timber on state land up 8% | Timberland Investment | Scoop.it

Sales of timber on state land hit a record $11.7 million last year, the Department of Natural Resources reported Tuesday. Sales rose 8% in fiscal 2014, which ended on June 30, over the previous year. In the past decade, timber sales have increased 125%, the agency said.
***
The forest products and pulp and paper industry complained for years that they were unable to get access to adequate supplies of trees on state land because the DNR was experiencing a backlog in evaluating timber sales.
***
In 2005, the Legislature added funding in the state budget to restore 40 state forester positions and help reduce a backlog of 170,000 acres of forest sales, according to Wisconsin Outdoor News.


Since then, the state has been able to whittle down the backlog and approve more timber sales, according to Paul DeLong, administrator of the state forestry division of the DNR.


Private land is the largest source of timber in the state, followed by county forests and then state land, according to DNR officials. On county land, 50,971 acres were logged in 2013, generating $31.7 million in revenue for counties, DNR figures show.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Minnesota firewood shortage 'unprecedented', timber exec says

Minnesota firewood shortage 'unprecedented', timber exec says | Timberland Investment | Scoop.it

If the first wave of crisp autumn air has you thinking about buying your firewood load to burn this winter, think again. Crimped by a wet spring and summer that kept loggers out of the woods, and on the heels of last year's long, hard winter that saw woodpiles dwindle to nothing, loggers and firewood suppliers say they just don't have any seasoned wood to sell this fall.

***

The shortage of wood has hit paper mills, too, with loggers unable to bring in their usual summer supply. Wayne Brandt, executive vice president of the Minnesota Timber Producers Association industry group, called the wood shortage "unprecedented." Wood supplies that dwindle annually in the spring, when conditions are too wet for loggers' equipment, never improved during the summer. "I can't recall any time where it's gone this long, over a pretty broad area, where they couldn't get into the woods. It just kept raining,'' Brandt said.


The industry called on state, federal and county land managers to check future timber sales for land that might be more accessible to log now. "They've helped a lot ... and things have improved a little in the last few weeks," Brandt said.


Mike Schultz, managing director of the Sappi Fine Paper mill in Cloquet, called it "one of the most challenging years that I can recall for wood procurement'' but said the mill has had enough to keep operating. "Our supplies are lower than we're comfortable with,'' he said. "But we haven't run out."
***
If you can find firewood for sale, you'll probably have to buy large quantities. And expect to pay more than in recent years -- probably about $200 per logger cord for delivered maple or oak, often with a three-cord minimum.
***
And the shortage of wood at mills has pushed up the price companies are willing to pay, luring loggers away from selling to firewood customers and instead taking it to the mills. "The mills have been paying us more, and it's a lot easier to deliver to their wood yards, so any wood the guys can get is going to the mills,'' Flannery said. "It's not leaving much for people to burn."

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

USA Foundation's net assets rise to $323 million, up 8 percent from 2013

USA Foundation's net assets rise to $323 million, up 8 percent from 2013 | Timberland Investment | Scoop.it

The University of South Alabama Foundation's assets have continued a steady climb over the last year, with the latest financials showing $323 million in net assets as of June 30. That's an 8 percent gain since June 2013, when net assets were at $298.5 million.
***
About half of the foundation's net assets come from the timber and mineral properties. The foundation's 77,801 acres of timber were appraised at $155.4 million, or $1,997 per acre, and are on track to produce revenue of $3.5 million in fiscal year 2014, including thinning, clear cut sales and hunting leases.


The foundation expects to bring in $456,000 in hunting revenue; $461,419 from thinning; and $2.3 million in proceeds from clear cutting.

Foundation officials had planned three timber sales in 2014, but ended up rejecting all bids at the summer sale.


"The prices that we received on bids were lower than the projected valuation because the timber market was impacted by very dry weather and an oversupply of timber," Roberts said. The next sale is planned in November.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

WWOTF Fills Up Again

WWOTF Fills Up Again | Timberland Investment | Scoop.it

Who Will Own the Forest? 10 

September 16-18, 2014
World Forestry Center
Portland, Oregon


The Who Will Own the Forest? 10 conference is now full and registration is closed.


Since vertically integrated forestry firms began to divest themselves of forest assets, and institutional and high net worth investors bought up these forestlands through TIMOs and REITs, it is estimated that the timberland investment arena is currently worth over $50 billion.  The investable universe is likely three times as large, with investors allocating part of their portfolios to forestland as they seek diversification, inflation protection, and potentially higher rates of return than the bond or equity markets.

2014 is our 10th Who Will Own the Forest? conference focusing on timberland investing, both domestically and overseas.


Sam Radcliffe's insight:

This is one of the premier events in the timberland space. I look forward to seeing friends and colleagues next week in Portland!

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

The Tao of Timberland

Sam Radcliffe's insight:

Great article by Jack Lutz on the intricacies of the NCRIEF Timberland Index.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

NCSU changes Hofmann deal, will sell most of forest to RMS

NCSU changes Hofmann deal, will sell most of forest to RMS | Timberland Investment | Scoop.it

N.C. State University has retooled its controversial plan to sell the massive Hofmann Forest near Jacksonville. It now will sell nearly all of the timberland to an investment company that specializes in sustainable timber management.


That company, Alabama-based Resource Management Service, will buy 56,000 acres, while the original buyer, Hofmann Forest LLC, will purchase the remaining 23,000 acres, including the major open tracts, university officials said Tuesday.


NCSU also agreed to cut $19 million from the original $150 million price, but the new terms could eventually reap an additional $9 million if the buyers are able to negotiate a deal to sell training rights on and over the forest to the U.S. military or to sell protection rights to a conservation group.
***
In announcing the original deal, university officials said they were selling the land because it wasn’t yielding enough income and wasn’t used much for research anymore. The investments should generate about $5.5 million a year for operations of the College of Natural Resources, they say, which could help compensate for repeated cuts in state funding in recent years. It had been producing about $2 million a year from timber sales, but in 2012 that dipped to less than $900,000.


Opponents of the sale say that the university has underplayed the land’s value for research and that if better-managed, it could yield steadier income. They also say it plays a host of vital environmental roles. The original buyer is led by members of a major Illinois farming family. Opponents of the sale, who are suing to block the deal, have said they fear that Hofmann LLC would chop down the trees to make way for row crops. They said the original deal was deeply flawed because it gave no iron-clad protections for the forest, which the university uses for income from timber farming and for research.
***
The new deal is still far from perfect, since there are still no absolute, permanent protections for the forest, said conservationist Ron Sutherland, one of the plaintiffs in the lawsuit to block the deal. But the participation of RMS was at least encouraging, Sutherland said, noting that the company was known to work with conservationists.
***
Last fall, a Wake County Superior Court judge dismissed the opponents’ lawsuit. They then took the case to the state Court of Appeals, which hasn’t yet ruled. Sutherland said the new deal probably wouldn’t affect their pursuit of the case, because until it’s clear that the land is protected, the plaintiffs believe any sale should be subject to a full environmental review.


The new deal was signed Sept. 2. Officials expect a closing on or before Nov. 17. It’s unclear, Woodson said, whether the EPA investigation will be complete, but the new contract includes wording to allow for that contingency.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Time to Buy the Farm?

Time to Buy the Farm? | Timberland Investment | Scoop.it

Investing in farmland and forest tracts is sometimes described as "gold with a coupon"—a hedge against inflation, because land prices tend to rise along with overall inflation, that also pays a steady income. Small investors have access to these markets through publicly traded real-estate investment trusts. Share prices of REITs that buy farm and timber land have dropped in recent weeks, but most of them yield dividends well above the current yields of about 0.95% on the three-year U.S. Treasury note and 2.11% on the seven-year Treasury.


For farms, there are two relatively new REITs.  Gladstone Land  raised $57 million in its January 2013 initial public offering and now owns 6,833 acres on 28 farms in California, Florida, Michigan, Oregon and Arizona, according to securities filings. Its dividend yield was about 5.82% in recent trading.  Farmland Partners, meanwhile, had a $53 million initial public offering in April and owns 41 farms with 23,630 acres in Illinois, Nebraska and Colorado, along with three grain-storage facilities. Its dividend yield is about 0.90%.


Publicly traded timberland REITs have been around longer.
***
Weyerhaeuser converted to a REIT in 2010 and recently completed a spinoff of its home-building division. It is one of the biggest forest-products companies, with seven million acres of timber in the U.S. Weyerhaeuser recently raised its dividend to 29 cents a share from 22 cents; its yield is about 2.80%.


Plum Creek Timber owns 6.7 million acres in the Northwest, Northeast and South—and six wood-product conversion facilities in the Northwest. Its dividend yield is about 4.35%.


Rounding out the biggest timberland REITs are  Potlatch Corp. and  Rayonier, with dividend yields of about 3.20% and 5.78%, respectively.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Small beetle with a big lesson for investors

Small beetle with a big lesson for investors | Timberland Investment | Scoop.it

The mountain pine beetle is about a third of an inch long and probably not endowed with advanced powers of financial analysis, but it has something important to teach investors about how environmental risk is changing.

 

In the past decade, the beetle has killed millions of trees from New Mexico to northern Canada. For investors in North American timber, the obvious response to an outbreak in one place would be to diversify into assets unaffected in other areas – but the beetle has spread so fast that such a strategy was doomed to failure.

 

What the beetle is telling investors is to stop viewing environmental risk in terms of isolated events.

 

There is increasing evidence that extreme weather, resulting in floods in the Somerset Levels or drought in California, is posing systemic financial risk, not just affecting a single asset at one time but large swathes of portfolios over time. Similarly, government initiatives to reduce environmental impact, for example by developing regulations to limit pollution, can also create widespread financial risk that is impossible to mitigate. Asset owners should pay more attention to these developments, improving their analysis and seeking out suitable hedges or mitigation steps.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

OSC lays out 'road map' for fraud case against Sino-Forest executives

OSC lays out 'road map' for fraud case against Sino-Forest executives | Timberland Investment | Scoop.it

Hugh Craig, counsel for OSC staff, spent about an hour Tuesday laying out a “road map” to the commission’s case against former Sino-Forest chief executive Allen Chan, pictured, and four other senior executives.


The Ontario Securities Commission laid out a sweeping case against former executives of Sino-Forest Corp. Tuesday, pledging to call more than a dozen witnesses and evidence to back up allegations of multiple instances of fraud at the disgraced Chinese timber company.


Sino-Forest raised $3-billion in Canada’s capital markets before a short-seller’s allegations of fraud and revenue inflation — and the subsequent OSC investigation — felled the firm and wiped out the holdings of scores of shareholders. “The risk of this loss was always present, given the flaws in Sino-Forest,” said Hugh Craig, counsel for OSC staff.
***
He said there were multiple individual instances of fraud, which included “the fabrication of assets and revenue.” The commission’s staff also plans to call witnesses and evidence to back up claims that Sino-Forest’s offshore executives hid relationships between the company and key supplies and customers. “No investor could make an informed decision whether to buy or sell Sino-Forest securities,” Mr. Craig said, adding that while there may be evidence presented about different business practices in China, there is no getting around the fact that Sino-Forest raised money in Canada’s markets.


The executives are accused of backdating purchases and sales of timber assets, and misleading independent directors, auditors, and OSC investigators.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

West coast log exports up, lumber exports down in second quarter of 2014

West coast log exports up, lumber exports down in second quarter of 2014 | Timberland Investment | Scoop.it

Log exports from Washington, Oregon, northern California, and Alaska totaled 515 million board feet in volume in the second quarter of 2014, an increase of more than 10 percent compared to the first quarter of 2014, the U.S. Forest Service’s Pacific Northwest Research Station reported today. During this same period, West coast lumber exports decreased by 4 percent to 247 million board feet.


The total value of these log exports increased by more than 5 percent to $390 million in the same quarter, while the total value of lumber exports decreased less than 2 percent to $183 million.

China remains a significant market.


“West coast log exports to China remained strong in the second quarter of 2014, increasing by more than 22 percent compared to the first quarter of 2014,” said Xiaoping Zhou, a research economist with the station who conducted the analysis and compiled the data. “China’s demand for West coast lumber, however, continued to decline, dropping by nearly 20 percent compared to the first quarter of 2014.”


Over 70 percent of the West coast’s log exports was shipped to China in the second quarter of 2014, compared to 64 percent in the first quarter of 2014, while lumber exports to China dropped to 35 percent of the total compared to 42 percent during the first quarter of 2014.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Ruling Against Big Timber, Federal Court Maintains Habitat Protections for Endangered Frog in Mississippi and Louisiana

Ruling Against Big Timber, Federal Court Maintains Habitat Protections for Endangered Frog in Mississippi and Louisiana | Timberland Investment | Scoop.it

A federal district court in New Orleans today upheld protections for 6,477 acres of critical habitat in Mississippi and Louisiana for endangered dusky gopher frogs, which likely number fewer than 100 remaining in the world. The court denied three consolidated lawsuits challenging a 2012 rule that established the habitat protections, including 1,600 privately owned acres of unoccupied frog habitat in Louisiana.


Today’s ruling by U.S. District Judge Martin L.C. Feldman rejected the arguments made by private landowners and the Weyerhaeuser Company, which holds a timber lease on the frog habitat in St. Tammany Parish, La. One of the landowners is represented by the Pacific Legal Foundation, a radical private-property-rights group.


The court held that the U.S. Fish and Wildlife Service reasonably concluded that the St. Tammany Parish land is essential for recovery of the frogs, which are now confined to just three sites in southern Mississippi — with only one site regularly showing frog reproduction. Although the frogs no longer live on the St. Tammany Parish lands, the Service found that those lands are essential because they contain five ephemeral ponds, each within hopping distance of the next. Dusky gopher frogs lay their eggs only in such temporary ponds — which are free of fish that would devour their eggs — and the St. Tammany Parish land was the frogs’ last known Louisiana breeding ground.

more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Timber Co. Fights IRS Over Nixed $2M Easement Deduction

Timber Co. Fights IRS Over Nixed $2M Easement Deduction | Timberland Investment | Scoop.it

A South Carolina timber company is protesting the Internal Revenue Service's disallowance of a $2.13 million charitable contribution deduction arising from the company's grant of a conservation easement on a 1,000-acre property, saying the IRS erred in finding that the easement had no value.


Petitioner Salt Point Timber LLC granted the easement in perpetuity to a conservation organization known as Lord Berkeley Conservation Trust and deducted $2.2 million from its tax returns in 2009.
***
Salt Point claims that a separate IRS audit had valued the easement at $1.2 million. “As such, the IRS appraisal itself is evidence of the arbitrariness and unreliability of the IRS valuation at zero,” the petition said.


The easement, located in Berkeley County, South Carolina, preserves views of natural, environmentally significant habitat on the Cooper River, Salt Point says. “Because of the easement, views of these areas will not be marred by residential or commercial development, as can be seen upstream, downstream and directly across from the easement property,” it said. The easement also prohibits or restricts the construction of roads, golf courses and residences, according to the petition.

***
The case is Salt Point Timber LLC v. Commissioner of Internal Revenue, case number 18057-14, in the U.S. Tax Court.

more...
No comment yet.