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New reports: An understanding of the wood energy pellet sector

New reports: An understanding of the wood energy pellet sector | Timberland Investment | Scoop.it

Wood energy pellets: love them or hate them. It all depends upon your perspective and understanding. That’s why the U.S. Endowment for Forestry and Communities (the Endowment) today released two new reports on the rapidly-growing wood energy pellet industry: “The Wood Pellet Value Chain: An economic analysis of the wood pellet supply chain from the Southeast United States to European Consumers,” and “Applying Pathways to Sustainability: A case study of how hypothetical bioenergy facilities in VA and GA can increase the sustainability of their supply chains.”

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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.

 

We encourage readers to interact with our site:

  • Click on the Follow  button (upper left), and Scoop.it! will deliver a summary of our new content to your inbox every morning.
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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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U.S. finds hardwood plywood from China subsidized, slaps on duties

U.S. finds hardwood plywood from China subsidized, slaps on duties | Timberland Investment | Scoop.it
The U.S. Department of Commerce said on Tuesday it had made a preliminary finding of subsidies in imports of hardwood plywood products from China and will impose countervailing duties ranging from 9.89 percent to 111.09 percent.

The investigation follows petitions from six privately owned U.S. plywood producers into the imports, which are used in wall panels, kitchen cabinets, table and desk tops, and flooring.

In 2016, imports of hardwood plywood products from China were valued at an estimated $1.15 billion, Commerce Secretary Wilbur Ross said in a statement.

The Commerce Department said it calculated preliminary subsidy rates of 111.09 percent for Shandong Dongfang Bayley Wood Co and 9.89 percent for Linyi Sanfortune Wood Co.

Sixty-two other companies received a subsidy rate of 111.09 percent and all other producers/exporters in China were slapped with a preliminary subsidy rate of 9.89 percent, the department said.

The Commerce Department said it is scheduled to announce its final determination on or about July 5 unless the statutory deadline is extended.
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Donald Trump slams Canada for trade practices in energy, lumber, and dairy

Donald Trump slams Canada for trade practices in energy, lumber, and dairy | Timberland Investment | Scoop.it

U.S. President Donald Trump escalated his attacks on cross-border trade Thursday, repeating his criticisms of Canada’s dairy industry but expanding his rhetoric to condemn lumber and energy.

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After signing an executive order in Washington that directs his administration to investigate whether steel imports jeopardize U.S. national security, Trump decided to repeat remarks he made earlier this week on Canadian dairy policies. He called them a “disgrace” to U.S. farm workers.

 

Trump then went on to criticize Canadian policies on lumber and energy, and said that Canada, and not just Mexico, has made the North America Free Trade Agreement a “disaster for our country.”

 

“We can’t let Canada or anybody else take advantage and do what they did to our workers and to our farmers,” Trump said. “And again, I want to also just mention, included in there is lumber — timber — and energy. So we’re going to have to get to the negotiating table with Canada very, very quickly.”

***

Lumber has been a trade irritant between the two nations for generations, so it’s little surprise it would be singled out by Trump. Lumber was excluded from NAFTA and its predecessor, the Canada-U.S. Free Trade Agreement. A nine-year lumber trade agreement signed in 2006 eased tensions, but that deal expired in 2015.

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Malaysia's timber exports to improve 5% this year

Malaysia's timber exports to improve 5% this year | Timberland Investment | Scoop.it

Malaysia's timber exports are expected to increase 5% this year from RM21.86 billion in 2016, supported by demand from India, said Plantation Industries and Commodities Deputy Minister Datuk Datu Nasrun Datu Mansur.

He said the export value of sawn timber, plywood and medium density fibreboard to India recorded an increase of more than 25% last year compared to 2015.
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Besides India, Japan is another big importer of Malaysian timber at RM3.73 billion last year, and comprising mainly veneers, fibreboards and chipboards.
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Mah also said 2017 would provide opportunities for the timber industry and the commodity is expected to continue benefiting from a strong greenback as the United States continues to be the largest market for Malaysia's furniture exports.

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Lumber Futures Surge In Latest Inflationary Signal

Lumber Futures Surge In Latest Inflationary Signal | Timberland Investment | Scoop.it

Lumber futures rose to nearly $415 per thousand board feet last Monday, a level unseen since March 2005, soon after homeownership peaked here in the U.S.

 

At issue is a mini-trade war between U.S. and Canadian loggers. For some time now, the American lumber industry has blamed its Canadian counterpart of unfairly dumping lumber in the U.S. that’s far below market value. Now, several factors are pushing timber prices higher. Chief among them are the likelihood of duties being raised at the Canadian border, possibly as early as next month; President Donald Trump’s calls to renegotiate NAFTA; and growing demand for new homes following the housing crisis as consumer optimism improves and millennial buyers finally seem eager to enter the market.

 

Shares of Canfor Corporation and Western Forest Products, Canada’s number two and number five lumber producers by annual output, have had a good three months, advancing 25.5 percent and 16.8 percent respectively as of April 12. 

Sam Radcliffe's insight:

This is one of several stories that portray the rise in lumber prices as a harbinger of general price inflation. While that relationship may have been true in the past, I think the recent run-up is due more to the special circumstances around the US/Canada softwood lumber dispute, and any price inflation will be restricted to that sector. US lumber companies benefit but US homebuilders and consumers have to take one for the team.

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The Molpus Woodlands Group Announces 15,815 Acre Timberland Offering in Oklahoma

The Molpus Woodlands Group Announces 15,815 Acre Timberland Offering in Oklahoma | Timberland Investment | Scoop.it
The Molpus Woodlands Group is offering an investment-grade 15,815 +/- acre timberland property located in Pushmataha County, Oklahoma. The Project Pushmataha offering comprises of nine timberland tracts distributed across eastern Pushmataha County, Oklahoma, ranging in size from 480 acres to 4,276 acres. These timberlands have operated as commercial forests for decades and continue to be a ready resource for the Oklahoma, Arkansas, and Texas lumber and paper markets. Southeastern Oklahoma offers a competitive timber market with a variety of mill options for the delivery of raw material. The timberlands have been certified under the Sustainable Forestry Initiative (SFI) for many years. These well-managed forests consist of conifer stands ranging from well-stocked merchantable timber to vibrant young plantations. Opportunities for conservation easements and sales of recreational and residential land also increase the value of the property. The diverse structure of this timberland property provides the opportunity for cash flow needs as well as long-term investment performance.
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CalPERS to create 13% real assets allocation and replace benchmark

CalPERS to create 13% real assets allocation and replace benchmark | Timberland Investment | Scoop.it

The California Public Employees’ Retirement System (CalPERS) is planning to consolidate its real estate, infrastructure and forestry investments into a single 13% real assets allocation.

 

The $316bn (€298bn) pension fund is also to adopt a single MSCI benchmark for real assets, replacing the National Council of Real Estate Investment Fiduciaries (NCREIF) Open-Ended Core Equity (ODCE) index, according to board meeting documents.

 

The changes, to be considered at its investment committee meeting next week, build on efforts to harmonise CalPERS’s real asset investments.

 

Paul Mouchakkaa, managing investment director for real assets, will argue that the new allocation and benchmark will enable CalPERS to underwrite real estate, infrastructure and forestry investments while seeking simliar underlying investment characteristics.

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Lumber Price Woes Will Persist, NAHB CEO Predicts

Lumber Price Woes Will Persist, NAHB CEO Predicts | Timberland Investment | Scoop.it

Headaches over the supply and price of North American lumber likely will persist for several years, the CEO of the National Association of Home Builders told lumberyard executives today, adding that one solution he's working on is to promote imports from Chile and perhaps Brazil.

"I think it's going to take four to five years to have a resolution to the Softwood Lumber Agreement (SLA)," Jerry Howard told members of LBM Advantage, a buying co-op, at its annual meeting in Orlando. He was referring to the now-expired trade pact between Canada and the United States that is expected to result in tariffs of as much as 30% being imposed this spring.

In the meantime, "builders are telling me they are having trouble getting commitments for the lumber packages for some of their products," Howard said. "The lumber issue is one that's extremely relevant and is slowing down the spring selling season."

***

Howard said his goal is to have a consistently priced, steady supply of lumber. Given these times, his first preference for achieving that would be for Congress to ease regulations so that more lumber could be harvested from American forests. But the GOP-controlled House and Senate will have trouble opening up as much forest land as would be needed to overcome a reduction in Canadian imports, he said. Thus, his second preference is an agreement that allows sufficient supplies of Canadian lumber to continue to enter the United States.

 

But Howard is hedging his bets on those prospects. He noted that last fall he visited Chile, which ranks only behind Canada for exports to the United States, albeit at much smaller volumes.

 

"I spent 10 days down there meeting with ministers and the industry," he said. "They're very interested in producing Chilean lumber to U.S. standards ... and becoming a permanent solution for Canadian lumber." It might take four to five years for this to happen, he said, but given how long the Canadian impasse is likely to last, "it's worth pursuing Chilean lumber." And by the way: He said he plans to visit Brazil this year.

Sam Radcliffe's insight:

The other side of the softwood lumber controversy. Random Lengths today showed a 10-45% increase in most grades of softwood lumber over the past three weeks.

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New Forests acquires a majority stake in Laos plantation to boost sustainable timber

New Forests acquires a majority stake in Laos plantation to boost sustainable timber | Timberland Investment | Scoop.it
New Forests has acquired a majority stake in a Laos plantation to boost sustainable timber in the region.

The Australia-based fund bought 85 percent of Mekong Timber Plantations and will develop the 54,000-acre property as a high-quality sustainable hardwood plantation to serve regional markets.

New Forests, which specializes in sustainable land and infrastructure, made the investment through its $170 million Tropical Asia Forest Fund (TAFF), the only forestry fund for institutional investors in Southeast Asia, the firm says. The fund is backed by nine unidentified institutional investors.

Since closing TAFF in 2013, New Forests has invested in 150,000 hectares (371,000 acres) of eucalyptus, acacia, and rubber plantations in Malaysia, Indonesia and Laos.

Malaysia and Indonesia in particular have seen some of the highest rates of deforestation in the world over the last two decades.
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The Molpus Woodlands Group Announces 28,300 Acre Timberland Offering in Northern Idaho

The Molpus Woodlands Group Announces 28,300 Acre Timberland Offering in Northern Idaho | Timberland Investment | Scoop.it

The Molpus Woodlands Group is offering an investment-grade 28,300 +/- acre timberland property in north Idaho. The Project Ruby Creek offering comprises 35 timberland tracts ranging in size from 40 acres to 2,563 acres and distributed across Bonner, Boundary, Kootenai, Latah, and Shoshone Counties in Idaho.

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Saving the Two-Hearted Forest, One Final Four Floor at a Time

Saving the Two-Hearted Forest, One Final Four Floor at a Time | Timberland Investment | Scoop.it

Most people watching the Final Four tournament this weekend will lock on to their maddened brackets and the warring players. But employees of Connor Sports, the NCAA’s official court supplier, know the unsung hero of the game is the iconic maplewood court itself.
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How this year’s court got to Arizona’s University of Phoenix football stadium is instrumental not only in facilitating athletic feats and ball response, but also in conserving the 24,000-acre Two-Hearted River Forest Reserve in Michigan's Upper Peninsula and promoting larger-scale sustainable forestry.

Like most basketball courts, Connor’s are milled from sugar maple, a long-lasting wood with perfect hardness for dribbling and footwork. Though millers can source from dozens of areas, Michigan is the global epicenter for maple timber. In the Two-Hearted region, however, a history of industrial logging practices and an economic bias for sugar maple has reduced forests to a near monoculture of sugar maple, leaving them dangerously susceptible to pests and diseases that could wipe out the forest and devastate the local economy.

To help prevent such a catastrophe, the Nature Conservancy — which manages the forest along with more than 5 million other acres nationally — has partnered with Connor to single-source their courts from 500 of the Two-Hearted’s local maples. That collaboration enables the careful thinning of the forest that opens up the canopy and creates space for new, competing tree species like white pine that will diversify the forest.
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For Michigan-based Connor, the partnership means building FSC-certified, sustainably harvested basketball courts, and it’s the first time they’ve single-sourced lumber whose origins they know precisely — some 200 miles from their Amasa mill — and which they can visibly track from forest to floor. For the Nature Conservancy, it promises that other state and federal forest managers take note and implement practices that keep forests from over-harvesting and retain important jobs in small towns.

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Duke Takes Timberland Investments Course to London

Duke Takes Timberland Investments Course to London | Timberland Investment | Scoop.it

May 2-3, 2017 in London, England

 

Day 1 – Timberland Investment Fundamentals

 

  • Participants, Opportunity Sets, and Trends: Global Timberland Investment Opportunities – Chris Zinkhan, Chief Executive Officer, The Forestland Group LLC
  • Investment Fund Structuring – Tom Johnson, Managing Director, Timberland Investment Resources LLC
  • Why Include Timberland in an Investment Portfolio? Criteria for Assessing Alternatives – Thomas Bentzen, Due Diligence Manager, The International Woodland Company
  • Undertaking Due Diligence on the Prospective Timberland-investment Opportunity – Blake Stansell, Sr Vice Present, The Forestland Group LLC; and Victor Haley, Partner, Eversheds Sutherland
  • Timberland Valuation: Issues and Trends – Bret P. Vicary, Vice President, James W. Sewall Co. 

 

Day 2 – Assessing individual properties and timberland portfolios

 

  • Income Tax Considerations of Timberland Investments – Daniel R. McKeithen, Partner, Eversheds Sutherland
  • Timberland Financial Reporting – Corey Ficke, Ernst & Young
  • Mergers and Acquisitions in the Global Timberland Sector – Willem Enthoven, Managing Director, FBR & Co.; Tom Blake, Managing Director, Pöyry Capital Limited; Celedonio Moncayo, Pöyry Capital Limited
  • Assessing International Opportunities – Tony Cascio, Director, Client Account Management, Hancock Timber Resource Group
  • Income Opportunities Beyond Timber Sales – Ricardo Bayon, Encourage Capital
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What Effect Do Health Insurance Costs Have On Logging Businesses?

What Effect Do Health Insurance Costs Have On Logging Businesses? | Timberland Investment | Scoop.it

Nationally, only 37% of logging businesses provide access to health insurance for their employees. On average, they cover 73% of a single enrollee’s premium. As you can see in the table above, the level of benefits actually varies quite a bit by region, with West Coast operations reporting greater access to health insurance (though with fewer survey respondents out west). If we combine the national average access and contributions with Kaiser Family Foundation’s estimates of insurance premiums by year for small businesses, we can see the estimated impact of health insurance costs per employee on logging businesses.

With only one-third of businesses affected, it doesn’t look like a big part of the story, though costs have been trending upwards. With two-thirds of logging employees not covered by their employer, you could also argue just the opposite. Access to health insurance for those without coverage from their employer who earn over 138% of the poverty line (roughly $16,000) are participants on the exchanges created by the Affordable Care Act or are uninsured. As has been widely reported, premiums in the open markets are on the rise. This puts pressure on the industry as a whole. If employees are feeling the pinch in their pockets over the cost of their health care, they may look elsewhere for employment. The level of benefits become a competitive advantage when seeking to recruit and retain quality employees. In a business like logging, which is increasing employment to match growing demand, being competitive matters.

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NAFTA panel sides with Port Hawkesbury Paper

NAFTA panel sides with Port Hawkesbury Paper | Timberland Investment | Scoop.it
A NAFTA panel has sided with Port Hawkesbury Paper in directing the U.S. Department of Commerce to reconsider issues on which the department based imposing border duties, including the electricity rate paid by the mill.

A North American Free Trade Agreement (NAFTA) panel recently ruled in favour of the Point Tupper paper mill in the latest step of the lengthy process that began in 2015.

The five-person panel was comprised of three officials from the U.S. and two from Canada.

“The allegations that were made by the Department of Commerce and our defence of them were shared with the panel and then the panel reviewed all of the facts … the decision was certainly in support of our defence that the allegations were in our opinion not accurate,” Marc Dube, business development manager with Port Hawkesbury Paper, said in an interview Monday.

The trade action came as the result of a petition filed by two American producers of supercalendered paper that say the Canadian paper goods are unfairly subsidized. In the case of Port Hawkesbury Paper, at issue was the aid package it received in 2012 valued at about $124.5 million from the province to reopen the mill after a year-long sales process, as well as a special electricity rate that it receives.

“In the opinion of the panel, it was a process that was done in the appropriate way,” Dube said. “It’s a very positive step in the process but now the Department of Commerce has a period of time to review the facts from the board and decide on their next steps.”
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Cambridge to roll out benchmarks for impact investments in real assets

Cambridge to roll out benchmarks for impact investments in real assets | Timberland Investment | Scoop.it
Cambridge Associates will benchmark impact investments in real estate, infrastructure, timber and other real assets.

The move reflects growing interest in such investments as impact investors seek alternatives across asset classes. (Cambridge’s Impact Investing Benchmark for private equity and venture capital funds pegged returns across 51 funds raised between 1998 and 2010 at 6.9 percent, compared to 8.1 percent for comparable funds with no deliberate focus on social impact.)

The benchmarks aim to establish a standard for against which investors can measure the performance of their impact portfolio.

The advisory firm tracks more than 800 mission-related funds and will break out real assets funds by size, year, and intended impact. “One of the challenges in this space is the lack of knowledge, prompting people to talk about financial performance abstractly,” Cambridge’s Jessica Matthews said in an interview.
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New private forestry partnership product launched by Coillte

New private forestry partnership product launched by Coillte | Timberland Investment | Scoop.it
Coillte has launched a private forestry partnership initiative. ‘Coillte Premium Partners’ has been presented as a new option for owners of private forestry to earn an annual risk-free income from their forests – without the need to sell their land.

The Minister for Agriculture, Food and the Marine, Michael Creed; Coillte Chairman, John Moloney; and Coillte Chief Executive, Fergal Leamy launched the product in Cork.

Coillte Premium Partners is aimed at landowners of high-quality, commercial forests where the Forest Service payments have or are due to expire. Through the partnership, Coillte will manage all aspects of the private forest including the harvesting and sale of the timber while the landowners retain ownership of the land.

Forestry owners will receive an annual payment for their crop while Coillte will own the harvesting rights to the crop. The landowner will receive a lump sum payment when the crop has been clear-felled.
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Morningstar Bullish on a Housing Recovery

Morningstar Bullish on a Housing Recovery | Timberland Investment | Scoop.it

We believe U.S. residential construction growth will be robust over the coming decade, but the road to a fuller recovery has proved longer than expected. Household formation continues to build momentum, but slowly, especially among younger adults. We expect roughly 1.3 million starts in 2017, up from 2016’s 1.1 million.


A review of homebuilder and labor market data has us optimistic about residential construction in the coming quarters. Homebuilders have taken notice of the immense demand potential from millennials and have begun building smaller, more affordable homes to attract these first-time buyers. This means lower mortgage payments and down payments for strapped young adults. Labor markets have also tightened, catalyzing real wage growth since early 2015 for those aged 18-34. With job opening levels at prerecession highs across numerous industries, we expect further wage gains to support rising household formation in the coming quarters.


Our updated forecast assumes that momentum in single-family starts continues, thanks to firmer labor markets and early signs of a more affordable mix shift in single-family construction. We expect single-family starts of 935,000 units in 2017, up 19% from 784,000 in 2016. Single-family permits, which typically lead starts by about one month, have continued to rise in early 2017. We expect multifamily starts to slip to 375,000 from 2016’s 380,000. Multifamily permit growth has begun to flatline amid tighter credit and ample new supply.


Our long-term forecast is intact. We expect starts to peak at 1.9 million by 2021 before falling back to a demographically sustainable 1.5 million. Stronger household formation by the massive millennial generation is the key to our bullish forecast.

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Trimble Buys BOS Forestry to Boost Forest Management

Trimble Buys BOS Forestry to Boost Forest Management | Timberland Investment | Scoop.it

Trimble Navigation Ltd. TRMB , an original equipment manufacturer of positioning, surveying and machine control products, recently acquired Canadian-based BOS Forestry. The financial details of the deal have been kept under wraps.

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Acquisitions have helped Trimble to build a comprehensive portfolio, enter new markets and generate additional revenues.

The acquisition of BOS Forestry complements Trimble's Connected Forest solutions that provide full raw materials lifecycle management solutions and is expected to boost the company's forestry division.

 

The acquisition, effective immediately, will extend Trimble's capabilities in serving its customers in the forestry business. The deal will focus on advanced technologies for better forest management, traceability and processing of timber.

 

BOS Forestry is a leading provider of forestry software. The company's suite of applications will provide processes for scale site, log load, yard inventory, contractor settlement, finished goods sales and distribution.

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Maine’s Forest Industry on Brink of Accessing Lucrative European Wood Chip Market

Maine’s Forest Industry on Brink of Accessing Lucrative European Wood Chip Market | Timberland Investment | Scoop.it

Maine still has lots and lots of trees, but the decline of the paper industry has devastated rural communities that depend on forest products.

Wood chips, which are burned for fuel in biomass energy plants, are in strong demand in Europe, and have the potential to rejuvenate the forest products sector in Maine. The only problem is that they can’t be exported, because of all the pests and pathogens that could be spread to other countries.

Now one Maine company has a solution to that problem.

“This is a large capacity item here, we’ve kind of had to shuffle things around in the shop in order to make room,” says David Cook, the senior project manager at the Fastco Corporation in Lincoln.

It’s Cook’s job is to keep his metal fabricators on schedule to build the two heater-drying systems that are scheduled to be trucked to Eastport for testing in the next few weeks.
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Fastco President Allen Smith says if the tests are successful, the heater units will be placed aboard cargo vessels and used to decontaminate low-grade wood chips for shipment to Europe.
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The unit spends several hours heating up the chips in an airtight hold until the humidity level reaches 100 percent and the temperature peaks at 140 degrees Fahrenheit. Thirty minutes later, when the phytosanitation process is over, the chips are bug free and ready for sale to markets in Europe.

University of Maine professor of forest operations, bioproducts and bioenergy Doug Gardner says that means that the state of Maine could finally exploit a competitive advantage.

“In the southern U.S., they’re shipping a lot of biomass material to Europe right now,” he says. “Maine is closer to Europe and provides a shorter shipping distance.”

And demand is strong. Countries in the EU have signed on to a mandate requiring that they must obtain 20 percent of their energy supply from renewable power sources by 2020. Those clean power goals have the potential to revitalize Maine’s forest products industry by providing revenue for landowners and paychecks for woodsmen, truckers and stevedores.

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Supporters Say Saving N.H. Biomass Would Boost State's Forestry Industry

Supporters Say Saving N.H. Biomass Would Boost State's Forestry Industry | Timberland Investment | Scoop.it
Members of the timber industry were in the state capitol today, arguing for the passage of a bill that would support the state’s struggling biomass industry.

New Hampshire has 6 biomass plants.  The plants convert wood waste products to energy, and they have trouble competing against the cheaper cost of natural gas.

Senate lawmakers were already working on a bill to help the industry when they got the news last week that the state’s smallest biomass plant, in Alexandria, was going to close.

Bob Guida is one of the bill’s sponsors.  The Alexandria plant is in his district.

"I call it the canary in the coal mine," he says. "All the sudden we have one, we’ve got five others now that, given the economics of the market for spot electricity, and the inability of these folks to pay any less for their fuel, then we’ll see others of the 6, if not all of them, ultimately close as well."

Senator Guida says the effect would be staggering – not just for the 100 or so people who work for New Hampshire’s biomass plants – but also for the North Country’s forestry industry.  Sawmills can’t sell off their excess wood to paper mills anymore, and biomass has given them a new market. Advocates say that economic relationship also helps with forest management.
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Trump's Building Promises Energize Lumber Prices

Trump's Building Promises Energize Lumber Prices | Timberland Investment | Scoop.it

The lumber markets are off to a robust start in 2017, as U.S. housing data show that the number of new homes available -- along with the sale of new homes -- are rising, according to the National Association of Home Builders. Home builders are employing more people and their purchasing orders of raw materials are increasing, particularly in lumber.

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Technical assessments of the monthly trends in random length lumber strengthen this argument. The chart below represents the current Random Lengths Framing Lumber composite price. The data compile the previous 11 years of monthly average price history, and the graph displays that data in five-year trends. The trend definitively points upward.

 

There are also fundamental reasons why lumber continues to look attractive. First, U.S. mortgage rates, while rising, are still close to historic lows. As of March 30, a 30-year fixed mortgage is 4.01 percent APR, while a 15-year is 3.18 percent.

With the market expecting at least two more Federal Reserve interest rate hikes this year, buyers are eager to purchase homes now rather than wait, because mortgage lenders are setting their rates based on their expectations for future inflation and interest rates. And from a seasonal standpoint, the U.S. is now in  its post-thaw construction season that should help lumber prices in the short term.

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Finally, if President Donald Trump is successful at getting his policy initiatives passed, lumber prices should rally further. It seems increasingly likely that the North America Free Trade Agreement won't just get “tweaked,” according to recent meetings with the administration's choice of U.S. Trade Representative, Robert Lighthizer, who previously served in the Reagan administration. At his Senate confirmation hearing, he said softwood is “at the top of the list.” 

 

Pushing for a new deal, Lightener stated that U.S. companies want “quantitative restraint” -- a limit on Canadian lumber entering the U.S.: “It is a very serious, intractable sort of problem. It has enormous political consequences on both sides of the border.” Limiting Canadian wood to the U.S. serves to drive up domestic prices.

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4,000 acres of Scottish woodland go on sale for £11.25m

4,000 acres of Scottish woodland go on sale for £11.25m | Timberland Investment | Scoop.it
Nearly 4,000 acres of Scotland’s forests have been put up for sale for offers over £11.25 million.

The ten forests, located throughout Scotland from Inverness-shire to Dumfries and Galloway, boast spruce plantations, wind turbines and areas which can be used for sporting activities such as shooting.

The land currently makes up an investment portfolio known as Stellar Forestry, owned by Stellar Asset Management.

Jon Lambert, partner at selling agent John Clegg & Co, said: “Half of these woodlands – those in the south of Scotland – occupy a prime location for commercial forestry investment where it is possible to access a large number of competitive processors.

“The properties in the north create different opportunities, including two wind turbines providing annual income, a high quality pine forest giving longevity and conveniently located next to a sawmill, a greater degree of species diversity and amenity value as well as the potential for house site creation and other possibilities for adding value.”

He said he believed that overseas investors would be likely to bid for the land, as well as UK prospective owners.
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US Housing Starts Inch Upward in February

US Housing Starts Inch Upward in February | Timberland Investment | Scoop.it
Housing starts ticked up 3.0 percent to a seasonally adjusted annual rate (SAAR) of 1,288,000 units in February. Single-family starts accounted for 872,000 units, which is 6.5 percent above the revised January figure of 819,000. The volatile multifamily segment dropped 3.7 percent to a SAAR of 416,000.

Single-family permits rose 3.1 percent to a rate of 832,000 units in February, while multifamily permits dropped 21.6 percent. Privately-owned housing completions were 5.4 percent above January’s estimate of 1,057,000 units.

Regional performance was less volatile than it has been in recent months, as confirmed by the US Census Bureau report. Seasonally-adjusted housing starts by region included:

Northeast: +16.7 percent; (+55.4 percent last month)
South: -2.6 percent; (+20.0 percent last month)
Midwest: +20.0 percent; (-17.9 percent last month)
West: +16.8 percent; (-41.3 percent last month)
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The Growing Pace of Global Investment in Agriculture

The Growing Pace of Global Investment in Agriculture | Timberland Investment | Scoop.it

Stable financial returns have become much harder to find after the financial crisis, a fact not helped by geopolitical instability, low interest rates, and lackluster economic growth. That has prompted investment managers to examine less traditional sectors; one of these include agriculture. More and more investors have had a growing interest in two areas: direct investment in farm-level agriculture and venture funding in agricultural technologies.

 

Direct equity investment in agriculture is beginning to flourish, even if it’s less mature than debt financing. Institutional investors have begun to see that the sector generates stable returns while serving environmental, societal, and governance (ESG) mandates. In 2009, five agricultural or farmland strategy funds collectively raised $500 million; by 2014, 17 funds raised a total of $3.9 billion.

 

In the second major area of investment, agricultural technology companies are attracting the attention of venture capitalists. In 2015, 499 companies received an aggregate $4.6 billion in investments, which is double 2014’s funding level of $2.36 billion.

In many ways, investing in agriculture remains a radical act. As a sector dependent on unpredictable weather, agriculture has long been considered too risky. Yet as the growth potential in other sectors wanes, and as new technologies better predict risk, agriculture is getting a well-deserved second look.

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An investment in agriculture and forestry is a claim on two streams of returns: the financial return from crop and harvest income and the capital appreciation of land or timber. This combination of income along with the upside of an appreciating asset produces optionality. There are other benefits to this investment, including correlation to inflation (which reduces risk that changes in inflation will negatively affect returns) and diversification (which means that a wide variety of agricultural and forestry investments aren’t necessarily tied to the performance of more mainstream investments).

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Fundraising around agriculture and farmland has grown significantly since a decade ago. There were an average of 6.8 funds that closed per year in 2006-2010; this figure more than doubled in the next five-year period, 2011-2015, to 14 funds a year.

Correspondingly, the amount of aggregate capital raised over these two five-year periods has jumped by nearly 150 percent, from an average of $1.24 billion per year to an average of $3 billion per year. While insurance companies and commercial banks make up the majority of investment in the space, more and more funds have increased equity investments.

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Human-started wildfires expand the fire niche across the United States

Human-started wildfires expand the fire niche across the United States | Timberland Investment | Scoop.it
The economic and ecological costs of wildfire in the United States have risen substantially in recent decades. Although climate change has likely enabled a portion of the increase in wildfire activity, the direct role of people in increasing wildfire activity has been largely overlooked. We evaluate over 1.5 million government records of wildfires that had to be extinguished or managed by state or federal agencies from 1992 to 2012, and examined geographic and seasonal extents of human-ignited wildfires relative to lightning-ignited wildfires. Humans have vastly expanded the spatial and seasonal “fire niche” in the coterminous United States, accounting for 84% of all wildfires and 44% of total area burned. During the 21-y time period, the human-caused fire season was three times longer than the lightning-caused fire season and added an average of 40,000 wildfires per year across the United States. Human-started wildfires disproportionally occurred where fuel moisture was higher than lightning-started fires, thereby helping expand the geographic and seasonal niche of wildfire. Human-started wildfires were dominant (>80% of ignitions) in over 5.1 million km2, the vast majority of the United States, whereas lightning-started fires were dominant in only 0.7 million km2, primarily in sparsely populated areas of the mountainous western United States. Ignitions caused by human activities are a substantial driver of overall fire risk to ecosystems and economies. Actions to raise awareness and increase management in regions prone to human-started wildfires should be a focus of United States policy to reduce fire risk and associated hazards.
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China turns to western NC trees for wood flooring and furniture

China turns to western NC trees for wood flooring and furniture | Timberland Investment | Scoop.it
The rumor in the timbering parts of the mountains began a few years back: The Chinese are buying up the lumber mills.

But those "Chinese" buyers in Western North Carolina are one charismatic man, Jimmy Lee, whose 11 mills include the old Stanley Furniture plant, once the largest employer in Graham County.

Much of the lumber Lee processes there and at other facilities in both Carolinas, Virginia and Tennessee is destined for Asian markets, particularly China, where a hunger for hardwood is fueled by consumers with recently acquired wealth and a taste for quality products.

The shifting world market helps provide jobs for local timber workers, be they loggers, mill workers or exporters. When timber value remains strong, it encourages area landowners to grow and manage timber tracts as a long-term financial investment rather than turning the land over to more traditional crops, advocates say.

North Carolina's timber exports to China have skyrocketed in recent years. It's a trend reflected nationwide as more timber harvested in the United States is shipped to the world's most populous country, where it is milled into furniture, flooring and other high-value products for buyers there.

For each of the last five years, the average value of Tar Heel wood and wood products exported to China has averaged $165 million, a number nearly 30 times what the state saw in 2000. That year, wood valued at $5.7 million was shipped to China, according to the U.S. Census Bureau.
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