Timberland Investment
91.3K views | +53 today
Follow
 
Scooped by Sam Radcliffe
onto Timberland Investment
Scoop.it!

Institutions look beyond funds to gain more control over real estate investments

Sam Radcliffe's insight:

See page 9: Thirty-seven percent of real estate investors are now interested in co-investments, 39% in joint ventures and 35% in separate accounts. Increased appetite for these types of investment is a result of institutions seeking the skill, resources, and unique opportunities that many real estate firms can offer, but with the additional control over their portfolios that would not be available through blindpool fund commitments.

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  button (upper left), and Scoop.it! will deliver a summary of our new content to your inbox every morning.
  • 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!

Timber Companies Sue Over Expansion of Oregon Monument

Timber Companies Sue Over Expansion of Oregon Monument | Timberland Investment | Scoop.it
Two Oregon lumber companies are challenging the legality of former President Barack Obama's expansion of the Cascade-Siskiyou National Monument.

Murphy Co. and Murphy Timber Investments LLC sued in federal court in Medford Friday naming President Donald Trump and federal agencies.

The Mail-Tribune says (https://goo.gl/8w5LUO) the Trump administration could choose not to defend the lawsuit.

Before leaving office, Obama added about 48,000 acres to the monument in southwestern Oregon days to protect its biodiversity.

Murphy Co. President John Murphy says more than 80 percent of the federal land in the expansion area is dedicated to timber production under the O&C Lands Act.

He says removing those acres from the timberland base managed by BLM will reduce the supply of timber sold and jeopardizes the company's log supply.

Murphy Timber Investments argues the expansion will reduce the value of about 2,100 acres of timberland it owns within the boundary as well as land outside it.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

TFS Set to Harvest Growth In China and India

TFS Set to Harvest Growth In China and India | Timberland Investment | Scoop.it
There are not many companies - if any - that could capture an 80% market share of their industry. But that’s the reward that Australian sandalwood grower TFS (TFC.AU) is eying as its investment in new supplies of the fragrant timber and oil are set to pay off as production ramps up to meet strongly growing Chinese demand.

CEO Frank Wilson, who owns a 12% stake in TFS, laughs off suggestions he’s running the OPEC of sandalwood when he sat down with Barron’s Asia, but he’s acknowledges the company is in a strong position as its transitions from being a forestry investment play to a provider of products hotly demanded for use in incense, perfumes and traditional Chinese medicine. The company has around 30% market share now, but as its plantations mature - trees take 15 years to grow - it could emerge with an 80% market share by 2030. The stock has done well over the past 12 months, with a 37% increase bringing its advance over the past five year to 140%.

TFS is the lone survivor of the shakeout of the Australian timber industry, one that saw a large number of forestry managed investment schemes (MIS) collapse under the weight of too much debt, leaving thousands of investors nursing heavy losses. For Wilson, the ability of TFS to survive the travails of the MIS debacle reflects a focus on a niche part of the industry, rather than more commodity type plantations favored by those forestry plays that hit the wall. “The reason I went into it is that it has big barriers to entry and it had a good end market that wasn’t aimed at one particular manufacturer, industry or country, and that should eliminate the boom-bust cycle you have in agriculture,” Wilson says. “That’s proved to be true.”
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Hundreds of ancient earthworks resembling Stonehenge found in Amazon rainforest

Hundreds of ancient earthworks resembling Stonehenge found in Amazon rainforest | Timberland Investment | Scoop.it

Hundreds of ancient earthworks resembling those at Stonehenge were built in the Amazon rainforest, scientists have discovered after flying drones over the area.

 

The findings prove for the first time that prehistoric settlers in Brazil cleared large wooded areas to create huge enclosures meaning that the 'pristine' rainforest celebrated by ecologists is actually relatively new.

 

The ditched enclosures, in Acre state in the western Brazilian Amazon, have been concealed for centuries by trees, but modern deforestation has allowed 450 to emerge from the undergrowth. They were discovered after scientists from the UK and Brazil flew drones over last year.
***
Their discovery also reverses assumptions that the rainforest ecosystem has been untouched by humans. “The fact that these sites lay hidden for centuries beneath mature rainforest really challenges the idea that Amazonian forests are ‘pristine ecosystems,'" added Dr Watling.

 

“Our evidence that Amazonian forests have been managed by indigenous peoples long before European contact should not be cited as justification for the destructive, unsustainable land-use practiced today.

 

"It should instead serve to highlight the ingenuity of past subsistence regimes that did not lead to forest degradation, and the importance of indigenous knowledge for finding more sustainable land-use alternatives”.

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

Maitland looks into stopping wood-frame construction

Maitland looks into stopping wood-frame construction | Timberland Investment | Scoop.it
The city of Maitland is working on hammering out a way to prohibit wood-frame construction for new buildings, and looking for cities statewide to get on board to make it happen.

The Maitland City Council got behind the idea after the city’s Planning & Zoning Commission started researching it last fall. Last month the Commission requested that the City Council have the city’s lobbyist work to gain support across the state for the Florida Legislature to change Florida building code to allow cities to have more control over building materials used in its borders. The Commission’s proposal applied to all construction except detached single-family homes.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Potlatch Corporation's (PCH) CEO Michael Covey on Q4 2016 Results - Earnings Call Transcript

Potlatch Corporation's (PCH) CEO Michael Covey on Q4 2016 Results - Earnings Call Transcript | Timberland Investment | Scoop.it

Executives
Jerald Richards - VP and CFO
Michael Covey - Chairman and CEO
Eric Cremers - President and COO

Analysts
Collin Mings - Raymond James
Chip Dillon - Vertical Research
Ketan Mamtora - BMO
Mark Weintraub - Buckingham Research
Paul Quinn - RBC Capital Markets
George Staphos - Bank of America
***
Ketan Mamtora

First question, can you talk a little bit about what you’re seeing on the M&A side? And how willing will you guys be to take up leverage for the right kind of opportunity?

Michael Covey

Well, the timberland M&A market was pretty active in 2016. They were setting aside the Weyerhaeuser, plum creek transaction, there were dozens of kind of smaller deals in that kind of $50 million to $500 million range. We are evaluated several of those and elected not to purchase any of them in 2016. So, I think the market has been pretty robust. We expect to continue with the kind of the maturing of some of the TIMO funds and need to for some of their investors to liquidate, and we expect to be more property on the market. Our debt enterprise level today is in the low 20% range. We feel like with we've got an untapped revolver of $250 million, which actually has an accordion on it we could expand, if needed. So, I think for the right opportunity, we'd certainly look for to continue to grow the Company.
***
Mark Weintraub

Thank you. With interest rates having crept up some of late and as you mentioned the TIMOs having property that's going to be coming to market the next year or so, are you sensing at all any change in the opportunities that might present themselves this year or next 12, 18 months? Or does it feel like the market in terms of the valuations is probably going to remain at the types of levels which up until now you've been very circumspect to get too aggressive on? Clearly you have found some, but in general you've been circumspect.

Jerald Richards

I think these timberland valuations continue to be quite strong regardless of the region of the country look at. It's very hard to create shareholder value at these kind of full prices that you have to pay for timberland to win. These auctions we've seen no softening of that. Timberland prices vary, but that's largely to do with the stocking and the quality of the timberland. But for well stock, good quality southern timberland I think deal metrics that are out there still very strong.
***
Paul Quinn

All right. And then just flipping over to softwood lumber because it's topical, what's the current status in negotiations right now? We've got a new U.S. government in. I guess there's not formal discussions between Canadian and U.S. governments at this point, but is the industry still talking? Are you hopeful for some kind of agreement in 2017?

Michael Covey

I think it’s a foregone conclusion that tariffs are going to be implemented later this spring. We view those as interims step to a negotiated agreement that establishes a quota on Canadian lumbers. And I think the industry is united in that and it's really important because it's one that allows the U.S. producers to invest and grow our lumber business here where is plenty of logs available, their housing starts to improving, there is a good demand for the product.

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

Interior lumber supply falling, mills threatened

Interior lumber supply falling, mills threatened | Timberland Investment | Scoop.it

A decade after billions of mountain pine beetles chewed their way through British Columbia's lodgepole pine forest, the Interior timber supply has begun a dramatic drop.

"These cut reductions are starting to happen, and they are going to be real," Albert Nussbaum, director of forest analysis and inventory for the B.C. Ministry of Forests, Lands and Natural Resource Operations, told a Jan. 19 forestry conference in Vancouver, Washington.
***
Nussbaum's talk to the American and Canadian delegates laid out the severity of the mountain pine beetle infestation in hard numbers that can be expected to translate into mill closures and community disruptions. He said the beetle killed 54 per cent of the merchantable pine that was to be harvested. But in some areas, specifically the central Interior, 80 to 90 per cent of the merchantable pine was killed.
***
The beetle infestation peaked in 2004, and Nussbaum said the good news is that beetle populations are now down to near-normal levels. Forest companies have been salvaging that dead timber, but he said the pace of salvage operations is beginning to slow down. With the decline in the availability of dead timber, the province's chief forester is now dropping the sustainable harvest rate, called the allowable annual cut (AAC), to reflect this new reality of the Interior forest. Base-case numbers for one of the hardest-hit timber supply areas, Quesnel, show annual AAC dropping to 1.6 million cubic metres from four million cubic metres. It will be up to the chief forester to determine how that happens and over what time period.
***
During the beetle infestation, B.C. increased its annual timber harvest to encourage forest companies to salvage dead pine, but the temporary harvest uplifts are now ending. The provincial AAC is hovering around 72.5 million cubic metres a year, roughly where it was before the salvage uplifts. Nussbaum expects 2017 to be the year when it moves below that level.

The decline in the B.C. timber supply was one of only two major clouds on an otherwise sunny forecast for the forest products sector in 2017. The sunny side is that U.S. housing starts are steadily climbing and the Chinese lumber market remains reasonably sound, which is positive for Canadian exporters.

The second cloud in the forecast, however, is the softwood lumber dispute, which is causing uncertainty on both sides of the border.
***
Nussbaum said the lumber dispute worsens the economic impact of the timber supply forecasts, because duties or quotas could devalue the remaining salvage wood.

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

Worst wildfires in Chile's history have killed 11 people, threaten wine and timber industries

Worst wildfires in Chile's history have killed 11 people, threaten wine and timber industries | Timberland Investment | Scoop.it

Chile’s worst ever wildfires threatened the city of Concepcion and the nation’s wine industry Friday, a day after flames destroyed a town about 200 miles south of the nation’s capital.

President Michelle Bachelet’s office said the fires had killed 11 people, forced the evacuation of more than 5,000 and burned nearly 900,000 acres, mainly forests.

Most of the evacuees come from the town of Santa Olga, southwest of Santiago, which was destroyed Thursday. 
***
The government said Friday that as many as 65 separate fires continued to burn out of control. 
***
Firefighters, police and soldiers were concentrating in Concepcion in a bid to keep the fast moving flames from the city of 250,000. The Chilean navy dispatched 550 marines to maintain order in Concepcion and other affected areas.
***
The fires started in mountainous areas southeast of the capital in November and spread due to high temperatures and strong winds, said Augusto Roberts, a spokesman for the commercial timber company Forestal Mininco. The timber industry had lost about 100,000 acres of commercial forests.

“The management of firebreaks is not only [to maintain] distance between the timber plantations, it is also important to keep houses away from potential sources of fuel,” Roberts said. “In Chile there is still much to learn."

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

Harvard’s changing investment practices to cost half of endowment-staff jobs

Harvard’s changing investment practices to cost half of endowment-staff jobs | Timberland Investment | Scoop.it

Harvard University’s endowment is expected to outsource management of most of its assets and lay off roughly half the staff, in a radical overhaul of the way the world’s wealthiest school invests its money.

According to people familiar with the matter, about half the 230 employees at Harvard Management Co. will leave as part of a sweeping change by the university’s new endowment chief, N.P. “Narv” Narvekar. The endowment will shut down its internal hedge funds and let go traders by the middle of the year, said one of the people, with other layoffs occurring by year-end.

***

The internal team in charge of direct real-estate investments is expected to spin out into an independent entity that Harvard is expected to invest with. Only management of Harvard’s natural resources portfolio and passively managed exchange-traded funds will remain in house.

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

Timber supply shortage sparks plantation push

Timber supply shortage sparks plantation push | Timberland Investment | Scoop.it
A forestry expert says the Victorian timber industry could be at risk of collapse after decades of mismanagement of native resources.

The owner of Australia's largest hardwood sawmill in Heyfield in Victoria's Gippsland region announced last week it would have no choice but to shut down because it could not guarantee timber supply.

Australian Sustainable Hardwoods employs about 250 workers and processes about 150,000 cubic metres of timber each year, but it has been unable to secure that level of timber from its state-owned supplier VicForests.

VicForests general manager Nathan Trushell told ABC Radio the company simply did not have the resources to fulfil that contract.

Australian National University professor David Lindenmayer said the supply issue proved the need to replace native logging with plantation timber.

As part of the School of Ecology and Conservation Science, Professor Lindenmayer has studied forest ecosystems and the effects of logging and fire in the Central Highlands of Victoria for more than 30 years.

He said the forest in that region had been "radically overcut" for decades.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Research: Long-term event study of timber real estate investment trust conversions

Research: Long-term event study of timber real estate investment trust conversions | Timberland Investment | Scoop.it
The long-term financial performance of four timber real estate investment trust (REIT) conversions in the United States is evaluated by an event study with one-, two-, and three-year event windows. Three types of benchmarks are used in gauging the abnormal returns. The first benchmark is a portfolio of firms that are closest in size and book-to-market ratio to the timber REITs, the second is a portfolio of pre-conversion timber firms, and the third is an equal-weighted timber exchange traded fund (ETF) comprised of selected forest firms. Four approaches are used to calculate abnormal returns. Buy-and-hold abnormal returns and cumulative abnormal returns measure the preliminary abnormal returns, zero-investment portfolio approach with rolling regression evaluates the market-based risk premiums, and panel data analyses capture the relative advantages of REITs over their competitors within the timber industry. On average, annualized abnormal returns of 0.5% and 8.9% are identified before and after the REIT conversions. There is no difference between variances of pre- and post-event annualized abnormal returns. Therefore, structural changes have added values to the timber firms in the long run.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Wood fiber costs for Eastern Canada pulp mills the lowest in 10 years, and lower than in most European countries

Wood fiber costs for Eastern Canada pulp mills the lowest in 10 years, and lower than in most European countries | Timberland Investment | Scoop.it

For most of the past 20 years, pulpmills in Western Canada have had lower wood fiber costs than pulpmills in the Eastern provinces. One year ago, pulp manufacturers in British Columbia paid almost C$ 60/odmt less for softwood chips than did pulp mills in Ontario and Quebec, and five years ago the difference was almost C$ 100/odmt, according to the North American Wood Fiber Review.

Because wood costs account for almost 50 percent of the production costs for Canadian pulp mills, companies in Eastern Canada have been at a competitive disadvantage to many other mills, not only in other regions of Canada, but throughout North America.

Pulp mills in Ontario and Quebec have consistently had some of the highest wood fiber costs in North America. However, prices have fallen lately; softwood chip prices have declined ten percent over the past 12 months and they were 25 percent lower in the 4Q/10 than five years ago. Prices are currently the lowest they have been in this region in over ten years. In US dollar terms, wood costs in Eastern Canada are now lower than most countries in Europe, as reported in the Wood Resource Quarterly.
***
Despite a price decline in Eastern Canada and an increase of almost 40 percent in one year in the West, pulp mills in British Columbia continue to have lower wood fiber costs than mills in the eastern provinces of the country.

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

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.

***

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.

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

Forest Stewardship Council cuts ties with Austrian timber giant over illegal wood, EIA comments

Forest Stewardship Council cuts ties with Austrian timber giant over illegal wood, EIA comments | Timberland Investment | Scoop.it

The Forest Stewardship Council (FSC) today announced its decision to immediately disassociate from the Austrian timber giant Holzindustrie Schweighofer (Schweighofer), one of its largest members, due to the company’s persistent and indiscriminate sourcing of illegal timber in Romania. The decision follows a year-long investigation by an FSC Expert Panel, which concluded that Schweighofer had created a business “culture” favoring cheap wood over legal wood in its Romanian sourcing.

The decision by the FSC’s Board of Directors reverses the Board’s decision in December to let Schweighofer continue using the FSC’s logo during a period of probation. Following that decision, EIA published results of a follow-up investigation that showed Schweighofer continuing to receive illegal wood. A broad spectrum of NGOs, including EIA, WWF, Greenpeace, and Friends of the Earth protested FSC’s decision to only put the company on probation. An online petition, calling for the FSC to disassociate from Schweighofer, garnered 250,000 signatories in Romania, Germany, and Austria. The Romanian group De-clic delivered the petitions to FSC’s headquarters in Bonn and urged the Board “to take the right decision and stop endorsing corruption in Romania and stop endorsing illegal logging.”

The FSC Panel’s year-long investigation produced a 110-page report in December 2016, concluding that Schweighofer had purchased illegal timber, sourced logs cut on land stolen from local communities, developed a bonus system that encourages illegal logging, and had an inadequate due diligence system to avoid illegal timber purchases. The Panel recommended that the FSC disassociate itself from Schweighofer until the company can meet a long list of conditions. Chief among these being that the company can trace all its log purchases back to the forest stand.

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

Online timber brokerage finds ways to make its mark

Online timber brokerage finds ways to make its mark | Timberland Investment | Scoop.it

Mahone Bay-based startup WoodsCamp Technologies is leveraging open data to reinvent — and reveal fresh insight into — Nova Scotia’s forestry industry.

WoodsCamp Technologies is an online timber brokerage that uses free ‘open’ provincial government data to connect woodlot owners, loggers and sawmills in a way that increases both efficiency and sustainability. In other words, WoodsCamp gets timber to the right place at the right time, and at a price that works for everyone.

The company had a great 2016, says Alastair Jarvis, who — along with Will Martin — launched WoodsCamp officially in May of that year.
***
The main WoodsCamp product for landowners uses ‘open’ data to quickly tell woodlot owners what’s growing on their property. This data, gained by remote sensors, represent a digital catalogue of what trees grow across the province. WoodsCamp ascribes a score to each lot, to assess the value of its contents. That means owners selling their timber have an idea of the value, even if they live thousands of miles from the woodlot. If they sell timber through WoodsCamp, the company gets a cut. And for the loggers and the pulp and timber mills who buy the wood? WoodsCamp offers the prospect of a more stable, sustainable and efficient supply chain.

But perhaps most importantly, says Jarvis, December saw WoodsCamp dispatch its 1,000th WoodsCamp report on privately held Nova Scotia land — a milestone representing, he says, approximately three per cent of the province’s 30,000 private landowners, in his well-researched estimate.
***
Meanwhile, says Jarvis, the data showed also that while Nova Scotia landowners are definitely motivated by money, financial gain is often not their primary goal.

“Most often, landowners say they want to make their forest healthier over time,” he says.
***
Going into the rest of 2017, both men remain focused on proving their idea can work here in Nova Scotia — before eventually taking it into eastern North America and Europe.

Says Jarvis, “We’re looking to scale globally in regions where a distributed and fragmented forestry supply chain persists, and where the network of human relationships that made the market work for a generation is now disintegrating.”

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

Residues Becoming a Problem for Northeastern Mills

Residues Becoming a Problem for Northeastern Mills | Timberland Investment | Scoop.it

Every mill is unique, but a decent rule of thumb is for every thousand board feet of lumber produced, two tons of residues are produced—one ton of clean chips, and another ton of bark and sawdust. Precise statistics are hard to come by, but New England sawmills produce somewhere on the high side of 1.3 billion board feet of lumber annually. Region-wide, about two-thirds of the production is softwood—spruce, fir, white pine and hemlock. Maine is responsible for the lion’s share of this production, but New Hampshire and Vermont check in with respectable production, and all states in the region have sawmills.

***

Since the beginning of 2014, Maine has lost over 4 million tons of low grade market—most of which were pulps mills (which use mill chips), with some biomass market loss as well. While pulp mills in the state still use somewhere around 7 million tons of wood annually (pulpwood and mill chips), softwood has taken a huge hit. Over 1.5 million tons of softwood market have vanished in the past few years. Shuttered pulp and paper mills in Bucksport, East Millinocket, Lincoln, and Madison were all softwood consumers, and are now gone. Other pulp mills have cut back production levels.

 

Forest2Market benchmark data confirms this trend. As evidenced in the two charts below, product categories that make up the residuals market have all decreased in price since Q12015 despite a few temporary spikes along the way. Hardwood total fiber has dropped 13 percent, softwood total fiber is down 10 percent and fuelwood has been hit the hardest with a 23 decrease in price.

 

In addition to pulp mill markets lost, many of the remaining markets aren’t exactly on firm footing. Biomass power plants in the region are struggling with (relatively) low wholesale electricity prices, as well as renewable energy certificate (REC) prices that have lost half their value since 2015. Two biomass plants reopened and two more were given a lifeline with $13 million in funding from Maine, but that provides only a temporary reprieve. The region’s pellet mills—which in this region sell to homeowners and businesses for heating—are competing against lower heating oil prices and still recovering from a very warm winter last year and sluggish sales this winter. 
***
Sawmills are critical to the success of the entire forest products industry in the Northeast (and every other region as well). In Maine, which has long been thought of as a “pulpwood state,” the most recent figures from the state’s Forest Service suggest that sawlogs represent about a quarter of the volume harvested, but two-thirds of the stumpage paid to landowners.

***

Today, sawmills (and the entire forest products industry) in the Northeast need to pay careful attention to moving residues as efficiently as possible in order to assure their continued operations and profitability.

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

Don’t sell state forest to timber company, Oregon governor says

Don’t sell state forest to timber company, Oregon governor says | Timberland Investment | Scoop.it

Oregon Gov. Kate Brown said Friday she was against the proposed sale of a state forest filled with old-growth timber to a logging concern and an Indian tribe, an issue that has galvanized environmentalists across the state.

 

In a jammed public meeting in December, speaker after speaker who had arrived from cities, towns and farms beseeched the State Land Board to reject the sale of the 82,500-acre Elliott State Forest to Lone Rock Timber Co. and its tribal partners.

 

Brown, one of three members of the State Land Board, said Friday she believes the forest in the Coastal Range should “remain in public ownership, with either the state or tribes owning the land.” She said, though, that the state should change the way it owns and manages the forest, whose timber sales help fund Oregon schools and which has been losing money in recent years.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Rayonier's (RYN) CEO Dave Nunes on Q4 2016 Results - Earnings Call Transcript

Rayonier's (RYN) CEO Dave Nunes on Q4 2016 Results - Earnings Call Transcript | Timberland Investment | Scoop.it

Executives

Mark McHugh – Senior Vice President and Chief Financial Officer

Dave Nunes – President, Chief Executive Officer and Director

Doug Long – Senior Vice President-U.S. Operations

Chris Corr – Senior Vice President, Real Estate and Public Affairs

Analysts

Collin Mings – Raymond James & Associates, Inc.

Ketan Mamtora – BMO Capital Markets (United States)

Mark Weintraub – The Buckingham Research Group, Inc.

Mandeep – RBC Capital Markets

 

Mark Weintraub

Okay. And then lastly sort of shifting gears. A fair bit of timberland that might be coming to the market in the next year, year and a half via the TIMOs. How important – is what's going on in interest rates to how these lands are likely to – or how you would view, how you would value these properties?

Dave Nunes

Well, it’s dynamic. I mean, I think that in some level as you see a rising interest rate environment that rising interest rate environment is predicated on an inflationary environment, which is in turn predicated on higher production – product pricing. So as we see more inflation impacting the price of the products, we expect that that's going to play into the rise in interest rates. We certainly look at it more from – we factor that in as we think about hurdle rates, but we're also looking at it from the perspective our alternative uses of capital and we’re always - when we look at acquisitions understanding how our own timber is trading at the time on an imputed discount rate and we compare that to what we think the market clearing discount rate is on any particular transaction. I don’t know Mark if you want to add anything to that.

 

***

Mark Weintraub

Well, and maybe just add one more. Would look that like particularly in the U.S. South that buyers already incorporate substantial appreciation in expected sawtimber pricing et cetera. Now do these same models in your judgment certainly can use your own thought process, do they incorporate meaningful increases in interest rates as well? Or is it that you've actually, the models are getting benefit to price appreciation and not necessarily so much for the interest rates. Of course prices could go up more than what’s imputed, but any thoughts on that?

Dave Nunes

Yeah, I mean, it probably depends on who you're talking to, I mean everybody – it’s a little bit differently and recognize too that you know a big impact. This really kind of boils down to how you think about discount rates and hurdle rate and it's not only you know, reflective of your cost of capital and alternative uses of capital, but it's also reflective of the flows of capital. What we've seen is that there's been continued interest in the timber asset class from a capital flow standpoint and that has tended to have a dampening effect on cap rates in the sector as people have pushed money into this sector from a flight to quality and just a general conservative investment perspective. So you’ve got some offsetting things at play there.

 

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

Second lawsuit filed over Forest Service’s PolyMet land swap

Second lawsuit filed over Forest Service’s PolyMet land swap | Timberland Investment | Scoop.it

Minnesota-based WaterLegacy on Monday filed suit in U.S. District Court against the U.S. Forest Service seeking to overturn the agency’s approval of a 6,650-acre land swap for the PolyMet copper mine site.

The environmental group says the approval earlier this month “violated the Federal Land Policy and Management Act because it failed to consider the highest and most profitable use of the lands for mining related uses, significantly undervalued the federal lands, and would result in a windfall for the PolyMet foreign corporation at the expense of Minnesota taxpayers and public lands.”

The 20-page lawsuit filed in Minnesota claims, “The Forest Service’s failure to appraise the market value of the federal lands … as a whole property, failure to value the lands according to their most profitable, feasible, probable and intended use for mining related purposes, and failure to value the lands based on the most comparable Northeastern Minnesota transactions by mining companies in the private market reflected a willful blindness of the Forest Service to the intended use of the federal property; was neither reasonable nor credible.”


PolyMet needs the Forest Service land between Hoyt Lakes and Babbitt because it sits on top of the deposit of copper, nickel and other valuable metals the company wants to dig — the first copper mine ever in Minnesota. In exchange for the mine site, PolyMet purchased and is trading to the federal government an equal amount of undeveloped land within the border of the Superior National Forest.

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

Rising Fiber Costs Threaten Russian Pulp & Paper Industry

The Russian Pulp & Paper (P&P) sector is export-oriented, and Russian producers compete with other long-fiber pulp and paper product producers in global markets. Due to the recent depreciation of the local currency (ruble), Russian producers have a reprieve; among the lowest cost producers in the world, they are currently enjoying high margins. This situation is temporary, however. As the ruble strengthens, fiber prices will increase and when this happens, knowledge of real-world market wood fiber costs will be crucial for Russian P&P products to retain a competitive edge on the global market.

***
The Russian P&P sector has expanded in the last 10 years, and its importance for the Russian economy has been growing. From 2006 to 2015, the growth has been significant for production of market pulp (15 percent) and especially for packaging materials, where production volumes have more than doubled. Export sales also account for a considerable share. For instance, exports amount to 30 percent of all wood pulp sales, 70 percent of all printing & writing paper sales and 25 percent of all packaging material sales. Increasing export revenues (a result of the weak local currency) have made Russian producers the most profitable in the world during the last two years.

The pulp and paper raw material base in Russia is heavily dependent on wood, as the amount of recycled fiber is low. Traditionally, the share of virgin fiber has been very high— around 80 percent.  As demonstrated in Figure 2, Russia currently enjoys the lowest pulpwood costs among the main supplier regions, which is less than $20 per cubic meter. For example, pulpwood for Russian mills currently costs one third of what competitors in Scandinavia pay. Differences from North American producers are also significant, partly due to the strong depreciation of the Ruble in 2014-2016 (Figure 3).

Between 2010 and 2015, raw material prices in Russia rose sharply in terms of local currency, but the favorable exchange rate has halted the growth of euro-based prices (Figure 4). Due to limited infrastructure and depletion of nearby resources, pulpwood is usually hauled long distances, sometimes longer than 1,000 km (more than 600 miles). Increasing oil prices and the accompanying revaluation of the ruble may be lurking around the corner. If no action is taken now to improve wood supply operations, Russian pulp and paper producers risk losing the competitive advantage they currently have.

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

Kansas PERS invests in open-ended US timber fund

Kansas PERS invests in open-ended US timber fund | Timberland Investment | Scoop.it

Kansas Public Employees Retirement System has approved a $75m (€70.2m) commitment to the RMS Evergreen US Forestland Fund. The commitment allows the pension fund to be a limited partner in one of few open-ended funds that invest in US timberland.

The fund holds a partial interest in a 2.1 million acre timberland portfolio worth $3.9bn in the southern region of the US.
***
The targeted long-term net returns for the fund are in the high single digits. The fund will accumulate most of its annual revenue and total return from active timber sales to local and regional sawmills and pulp mills.

This is expected to be driven by a recovering US housing market and growing demand for pulpwood used in packaging and wood-pellet production.

The fund plans to continue to acquire more timberland assets beyond its existing portfolio. Assets will be in the southern region of the US and the portfolio will be diversified by age-class, species and regional submarkets.

The commitment by Kansas PERS is the second to Evergreen’s fund by a major US investor. Last year, the New Mexico State Investment Council approved a $125m allocation to the fund.

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

Washington senator named special assistant to agriculture secretary

Washington senator named special assistant to agriculture secretary | Timberland Investment | Scoop.it
A Republican state senator from northeastern Washington has resigned from the Legislature to become a special assistant to the U.S. agriculture secretary.

Brian Dansel, a resident of Republic in rural Ferry County, announced his resignation and new job in a press release Tuesday.

“It is no secret that I think we could be moving more timber off the forests, while putting people back to work and reducing our susceptibility to wildfires,” he said in a written statement. “I think we also need to reform regulations that have prevented mining companies from exploratory drilling, rendering the mining industry nearly obsolete when it has been an iconic industry in northeast Washington for many decades.”

Dansel, 33, did not detail his duties as special assistant. Efforts to reach him Tuesday afternoon were not successful. He will begin his duties in Washington, D.C., immediately, according to the press release.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Call it Nuveen now: TIAA renames its asset management unit

Call it Nuveen now: TIAA renames its asset management unit | Timberland Investment | Scoop.it
TIAA is one of the oldest names in the retirement industry, founded by industrialist Andrew Carnegie in 1918. But it is stepping away from that history in one part of its business as it seeks more money from outside investors.

TIAA’s asset-management unit Monday renamed itself Nuveen, taking the brand of a company TIAA purchased in 2014. The division’s dozen money managers oversee almost $900 billion in assets, ranging from stock mutual funds to timber and real estate.

TIAA in December hired Vijay Advani, former co-president at Franklin Templeton Investments, to be president and operating chief of the reorganized business. It also appointed TIAA veteran Jose Minaya to help oversee the 12 money managers as president of global investments.
more...
No comment yet.
Scooped by Sam Radcliffe
Scoop.it!

Financial impact of Fort McMurray wildfire reaches almost $8.9B

Financial impact of Fort McMurray wildfire reaches almost $8.9B | Timberland Investment | Scoop.it

EDMONTON -- An assessment of the total financial impact of last spring's Fort McMurray wildfire is pegging the direct and indirect costs of the blaze at almost $8.9 billion.

 

The figure includes the expense of replacing buildings and infrastructure as well as lost income, profits and royalties in the oilsands and forestry industries, said MacEwan University economist Rafat Alam.

 

It also includes early estimates on indirect costs such as environmental damage, lost timber and physical and mental-health treatment for residents and firefighters.

The estimate will go even higher, Alam said Tuesday.
"It's not fully done yet. More data kept coming and I'm sure it will keep coming in."

 

Alam said it can take up to 10 years to get a complete picture of everything that happened and what it cost.
Earlier this year, insurers estimated they'd be paying out about $3.7 billion for damage caused by the blaze which firefighters came to call "the beast." Alam said that figure is now almost $4 billion.

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

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.
***
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.
***
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.
***
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.

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

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.

 ***

 

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.

more...
No comment yet.