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

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

 

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

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

 

About this magazine

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

 

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Some useful links

 

Stock quotes, news and financial metrics

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

 

Prentiss & Carlisle newsletters

Quarterly updates on conditions in our operating regions

 

Timber Mart North 

Lake States price reporting service published by P&C

 

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Market Snapshot: Canadian Softwood Lumber

Market Snapshot: Canadian Softwood Lumber | Timberland Investment | Scoop.it
The North American softwood lumber market ended October 2018 at a low point for the year—a complete reversal compared to its record-setting performance earlier in 2018, which also came on the heels of solid performance in 2H2017.
Throughout Canada, inventories still remain heavy, customers are quiet, producers are just starting to announce seasonal downtime and secondary suppliers have an abundance of wood on hand. At sawmills, log supply has been plentiful and small orders of fill-in lumber are about the only sales tasks that need to be addressed.

Market conditions for North America softwood lumber products—the supply-demand balance—has changed drastically in recent weeks. The slowdown in US construction activity has caused lumber producers to pump the brakes just a few months after surging demand drove price levels to new highs.

At the start of 4Q, suppliers quickly found themselves with overflowing inventories and more manufacturing booked to come online quickly. Buyers, meanwhile, have backed off almost entirely and prices have responded accordingly.

An unexpected predicament recently manifested itself in the form of labor action for producers in British Columbia (BC); the United Steelworkers Union, representing sawmill workers across Canada, is currently in negotiations with two BC employer groups that have been hit by rotating strikes at select operations. In response, several individual operators have announced seasonal curtailments and downtime. This sudden uncertainty is hitting at a time when lumber demand is soft and prices are lower than earlier in the year, so the impact to production has not yet been felt in the market.
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Lumber Market Crash Is Probably Over, Resolute Forest Says

Lumber Market Crash Is Probably Over, Resolute Forest Says | Timberland Investment | Scoop.it

The plunge in lumber prices is probably over, Resolute Forest Products Inc. Chief Executive Officer Yves Laflamme said in an interview.

The market is “close” to a bottom, though prices probably won’t rebound to this year’s highs, Laflamme said. Last week, lumber futures tumbled to a 28-month low and have plunged 50 percent from the record in May. That spurred Interfor Corp. to announce plans to reduce output by 20 percent at its British Columbia sawmills. Canfor Corp. on Thursday said it will to cut production 10 percent in British Columbia in the fourth quarter.

Montreal-based Resolute reduced shifts at some mills in Thunder Bay, Ontario, and Quebec to adjust log inventory, Laflamme said in the telephone interview. “That’s the way we’re managing right now, and if we need to do more, we’ll do more,” he said.

Tight supplies, trade disputes and transport bottlenecks sent lumber futures higher earlier this year. As a Canadian rail logjam eased, the outlook for U.S. housing started to trail some expectation, and the lumber “market started to collapse,” Laflamme said.

Even if prices have bottomed, fourth-quarter results for lumber “won’t be that great” after the slump and the persistent dispute between Canada and the U.S. over softwood lumber, Laflamme said.

Resolute will pay about $88 million in import duties to the U.S. by the end of the year, and neither side appears to have “any interest” in a deal, he said.

On the outlook for lumber prices, “I’m not expecting to go back to where we were because that was the exception,” though the market will be “better in the next few months.”

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Timber product exporters wary of potential Chinese dumping

Timber product exporters wary of potential Chinese dumping | Timberland Investment | Scoop.it

The far-reaching consequences of the escalating trade tensions between the US and China are also a concern for the timber product export industry, according to new Malaysian Timber Council (MTC) chairman Datuk Low Kian Chuan. While manufacturers of furniture, wood-based panels and commodities like rubber and palm oil may benefit from the diversion of investment and demand from the two countries, there is the potential that excess Chinese timber products may be dumped into export markets that Malaysia currently supplies to, like Europe and Japan, Low said.

 

“For example, Chinese plywood may potentially flood the Japanese market, which is currently the largest market for Malaysian plywood. [There is also the] potential risk of dumping of China-made wooden products and furniture into Malaysia, which affects companies focusing on the domestic market, though this will provide more choices for domestic users,” he told The Edge Financial Daily in a recent interview.

 

Hence, with Malaysia’s open economic policy, Low urges stronger trade relations with both China and the US, focusing on attracting foreign direct investment from these countries.

 

Still, trade tensions notwithstanding, Low foresees that Malaysia will be able to achieve its target of RM25 billion export value by 2020 under the revised National Timber Industry Policy. To achieve this, he said, Asia will be the focus region for Malaysia’s exports of timber and timber products in the next few years.

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CatchMark Timber Trust Inc.'s (CTT) CEO Jerry Barag on Q3 2018 Results - Earnings Call Transcript

CatchMark Timber Trust Inc.'s (CTT) CEO Jerry Barag on Q3 2018 Results - Earnings Call Transcript | Timberland Investment | Scoop.it

Executives
Brian Davis - CFO
Jerry Barag - President and CEO
Todd Reitz - SVP, Forest Resources
John Rasor - President, Triple T Timberlands

Analysts
Collin Mings - Raymond James
Paul Quinn - RBC Capital Markets

 

Jerry Barag
***
Now I'd like to spend some more time reviewing two other important transactions that we have not previously discussed on our calls. Bandon which we completed in late August and the southwest regional disposition which we entered into in late August. Bandon is our first transaction in the Pacific Northwest. We acquired from more than 18,000 acres of prime Oregon timberlands for $90 million.

 

In keeping with our focus on premium quality and durable earnings potential, the acreage features quality stocking of 36 tons per acre and merchant inventory comprised of 87% commercial conifers, 77% Douglas fir.

 

More than 90% of Bandon expected five years average harvest volume will keep sawtimbers, helping increase sawtimber share of our harvest.
***
The southwest region disposition is a key part of our capital recycling strategy, following the Triple T and Bandon transactions. Scheduled to close before year-end, southwest disposition involves selling 56,000 acres in Texas and Louisiana and CatchMark will retain merchantable inventory for harvest on the sold acreage. over the next 18 to 24 months.

***
In terms of current transactional activity in timberlands, we see a bifurcated U.S. South just as reference. High quality properties attract strong bidding. Second tier properties take longer to clear and possibly aren't even selling. Lower projected sawtimber pricing growth is weighing on valuations in the region.

In the Pacific Northwest, the transaction market remains robust supported by favorable underlying inventory and demand dynamics.

***
Paul Quinn

Very great. Maybe we had a record drop of lumber in the quarter. Just wondering if you've seen any kind of -- or heard of any changes in some of the potential capacity adds that are coming in November space going forward in the U.S. South?

 

Jerry Barag

Yes. I mean, as an industry it's impacting different places differently and we know given the really strong prices for timber out in the West and the fall particularly in power prices in particular out in the West that it's gotten a little bit more dicey. As I noted in my comments, prices on Southern Yellow Pine, while it come down from big highs, are still -- on a trend line basis are it's still pretty attractive.

And so the people that we're supplying, which again by design are in some of the better lumber production markets, and as a result, some of the better timber markets, they have not pulled back at all. We have seen no real impact of lower lumber prices on their current operating rates and their future plans for expansion in the south.

 

Paul Quinn

Okay. And just last year on Timberland values, I mean you guys are pretty. Just wondering if you are seeing any impact from rising interest rates, lower lumber and sort of this Chinese import tax issue on Timberland values?

 

Todd Reitz

The quick answer is no. It's still a little early for that to have gone through. As I've noted on previous calls, the big impact -- and it's challenge for the appraisal industry for valuations in general, is that the way the market operates is based on actual recorded sales and it doesn't really take into account no sales.

 

And there have been quite a bit of no sales in weaker and weak Timberland markets. And so those comps really never make it to those appraisers and it's odd process probably a flawed process because of that. But what you've seen is where products have transacted have been in the more desirable market, the better operating market and prices have remained very consistent.

 

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Housing Start Forecast: What the Next Five Years Really Look Like

Housing Start Forecast: What the Next Five Years Really Look Like | Timberland Investment | Scoop.it

Housing start forecasts are overly optimistic, with many in the industry suggesting we'll see 1.6 million housing starts in 2020. These estimates are overblown. Forest2Market’s current forecast for 2020 is 21 percent lower; here's why.

 

Demand—Millennial Buying Behavior

All the statistics point to pent-up demand from millennials. Several trends indicate that this cohort may not follow in the footsteps of their parents.

 

In general, millennials eschew the ownership of things. They stream music, film and television instead of buying CDs, DVDs and expensive cable TV packages.

 

Millennials are delaying major life changes that often lead to the decision to buy a home, like marriage and having children.

 

Home prices are painfully high and interest rates are increasing. Millennials have more student loan debt than previous generations.
***
With this debt comes two things that make loan qualification difficult: lower credit scores and high debt to income ratios. High down payments and mortgage payments are obstacles as well.
***
When they do decide to enter the market, however, millennial buying behavior is not following the historical pattern of buying a starter home, living in it for 5-7 years, and then making a second purchase of a dream home. Instead, millennials are skipping starter home purchases, saving longer to amass larger down payments and making their first homes their dream homes. Ultimately, this cohort will buy half the number of homes in the beginning stage of their adult lives.

 

Supply—Labor, Land and Lumber

***
The national unemployment rate was 3.7% in September 2018, but the unemployment rate in the construction sector was 5.0%, according to Bureau of Labor Statistics (BLS).

 

The causes of this shortage are varied:

 

Fewer young people are choosing construction as a profession and since the workforce is aging, retirees are not being replaced.
***
During the Great Recession, workers who lost their construction jobs found other jobs (mostly in the energy sector) and did not return to construction once home building picked up.

The opioid crisis has exacerbated the labor shortage.
***
More rigorous drug screenings have also led to more potential workers being turned away, and others who are otherwise qualified avoid drug tests by not applying for open positions.

 

According to the Pew Research Center, nearly 15% of the workforce in the construction industry—roughly 1.25 million workers—are undocumented immigrants.
***
The effect of this labor shortage is two-fold: it takes longer and costs more to complete a construction project.
***

Land shortages are also influencing the market. In urban areas, where demand is strongest, the availability of serviced, buildable lots suitable for residential construction is shrinking. Because land is a finite resource, this problem is likely to worsen.

 

Another issue that could lead to shortages affecting the number of homes that can be built in the future is sawmill capacity.
***
Considering the average amount of lumber used to construct the average-sized US home, there isn't much room for housing starts to increase beyond their 2018 level of 1.266 million (Forest2Market’s estimate) before lumber shortages become common. With an additional 3.3 BBF of capacity coming on line between 2019-2021 (a 15% increase), the highest annual housing start level that US capacity will be able to absorb through 2021 is roughly 1.44 million units. And adding new capacity beyond 2021 will be limited to roughly 1.2 BBF a year, the limit to how much new sawmill capacity can be built in that amount of time.
***
Forest2Market's Housing Start Forecast

Because of headwinds facing both demand and supply, Forest2Market's current 2020 forecast for housing starts is 1.259 million units, roughly the same as it is for 2018 and 2019. In 2021, we anticipate the market will soften slightly to 1.209 million units, gaining back some ground in 2022 to 1.280 million units. In 2023, we should see a more dramatic recovery, with starts ranging between 1.55-1.80

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Lamar Adams Sentenced to 20 Years in Probable Largest Ponzi Scheme in State History

Lamar Adams Sentenced to 20 Years in Probable Largest Ponzi Scheme in State History | Timberland Investment | Scoop.it

U. S. Attorney Mike Hurst released the following statement tonight, posted verbatim:

 

Jackson, Miss. – Arthur Lamar Adams, 58, of Jackson Mississippi, was sentenced today to 235 months in federal prison for wire fraud involving a large, multi-state Ponzi scheme involving more than one hundred million dollars and hundreds of victims spanning a number of years, announced U.S. Attorney Mike Hurst and FBI Special Agent in Charge Christopher Freeze.

 

United States District Judge Carlton Reeves sentenced Adams to serve nineteen and a half years in prison, followed by three years of supervised release, on a charge of wire fraud involving a scheme and artifice to defraud investors in connection with a Ponzi scheme using Madison Timber Properties, LLC, a company wholly owned by Adams. Judge Reeves ordered full restitution to be paid to the victims of the scheme. During the last year of the scheme, Adams fraudulently obtained in excess of $164.5 million dollars from more than 320 investors located in at least 14 different states.
***
Over a period of at least 7 years, Adams executed this sophisticated Ponzi scheme using Madison Timber Properties, LLC, a company wholly owned by Adams. From as early as 2011 through April 2018, Adams’s scheme defrauded investors by soliciting millions of dollars of funds under false pretenses, failing to use the investors’ funds as promised, and converting investors’ funds to Adams’s own benefit without the knowledge of the investors. Instead of investing his clients’ money, Adams used the invested funds for his own personal benefit and for purposes other than those represented to investors, which also included making payments due and owing to other investors, thus perpetuating the Ponzi scheme. 

***

As part of his fraudulent scheme, Adams falsely represented to investors that Madison Timber Properties was in the business of buying timber rights from landowners and then selling the timber rights to lumber mills at a higher price. The object of the scheme was to cause individuals to invest in loans that purportedly were for the purpose of financing contracts for the purchase of timber rights to be sold to lumber mills at a higher price. However, neither Adams nor Madison Timber Properties had such timber rights or contracts with lumber mills, except in only a few instances.

 

Adams entered into fraudulent investment contracts with investors, most often in the form of promissory notes on behalf of Madison Timber Properties. The loans typically guaranteed investors an interest rate of 12-13%, with the interest to be repaid to investors over the course of 12-13 months. The monthly payments due on these promissory notes were typically due on either the first or the fifteenth of the month.

 

Adams created false documents causing investors to believe that their investments were secured by sufficient collateral from which they could recover all or part of their investment in the event that Madison Timber Properties defaulted on the loans. Specifically, Adams created false timber deeds purporting to be contracts conveying timber rights from landowners to Madison Timber Properties. Adams forged the signatures of landowners and also created false timber deeds purporting to convey timber rights from Madison Timber Properties to the investors.

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Stressed Southern Timber Growers Get Hit Again

Stressed Southern Timber Growers Get Hit Again | Timberland Investment | Scoop.it

Owners of forest land along the Florida Panhandle and beyond are grappling with at least $1.6 billion in timber losses after Hurricane Michael snapped and mangled trees across the region, according to state authorities.

 

Forestry officials in Florida, Georgia and Alabama estimate the hurricane damaged more than five million acres of woodland in the region when it roared through this month. The destruction marked a fresh blow to timber growers already saddled with historically low prices brought on by a glut of mature trees in the South.

 

The storm hardly dented the oversupply. But it wiped out decades-old investments and triggered heavy cleanup costs for local timber owners, most of whom are individuals and families.
***
Landowners rarely carry insurance on timber because it isn’t cost effective. Some may be eligible for casualty loss deductions on their federal income taxes, depending on how much they invested in their timber, how long the trees have been growing and whether any money is spent replanting.

 

Southern yellow pine, which is sawed into lumber and pulped into paper and particle board, is one of the region’s top agricultural products. Sunshine State growers alone are out about $1.3 billion worth of wood as a result of the storm, according to Florida authorities.
***
In Georgia, state officials say the lost timber is worth roughly $374 million. Forestry officials in Alabama are still tallying lost value, but have identified more than 42,000 acres of forestland in the state’s southeast corner where damage ranges from modest to total loss.

 

Most owners simply have to salvage what wood they can while it is still worth something. Blue stain, brought about by fungi, can set in within about a month, and ruin saw logs. And it doesn’t take long for bugs and rot to take over.
***
Growers will be fortunate to salvage 20% of the damaged trees, and those that make it to mills might fetch just 20% to 50% of their pre-storm value, said Chad Nimmer, a Georgia lawmaker who works in logging.

 

Wind-rattled wood usually won’t make the grade for top-dollar forest products, like utility poles and lumber, foresters say. It is more likely to be pulped or mulched, which returns far less.

 

The condition of local mills is another concern. It isn’t economical to carry trees too far from where they are grown, with weight limits on highways, slim margins and in-demand logging crews who are reluctant to spend too much time on the road.

 

WestRock Co. said its Panama City mill, a likely destination for much of the downed timber, suffered substantial damage. The paper and packaging firm is working to get the line that makes facing for corrugated cardboard back to full production by mid-November. It will be at least six months before its pulp production is back to capacity.

 

Undamaged mills, on the other hand, may already be fully stocked from the summer logging season. “We’re hoping they’ll be considerate and take as much of that damaged wood as possible,” said Dana Stone, an Alabama Forestry Commission official.

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Southern Yellow Pine Lumber Prices Plummet in October

Southern Yellow Pine Lumber Prices Plummet in October | Timberland Investment | Scoop.it
Southern yellow pine (SYP) lumber prices leveled out in September before plummeting to a new 2018 low in mid-October. Forest2Market’s composite southern yellow pine lumber price for week 42 was $392/MBF, a 3.2% decrease from the previous week’s price of $405/MBF and a 4.6% decrease from the same week in 2017. This is also the third week in a row that prices in 2018 have been below prices in 2017.
Price volatility decreased in September as prices were range-bound between $430/MBF and $438/MBF. After reaching a record high price of $576/MBF in late June, SYP prices declined rapidly before bottoming at their lowest point of the year in week 42.

A closer look at some of the prices we have seen since the beginning of the year:

1Q2018 Average Price: $449/MBF
2Q2018 Average Price: $523/MBF
3Q2018 Average Price: $486/MBF
YTD Average Price: $471/MBF
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Housing Is Tanking In The Northeast. Guess Why.

Housing Is Tanking In The Northeast. Guess Why. | Timberland Investment | Scoop.it

Sales of new single-family houses were down 13.2 percent in September from a year earlier, the Census Bureau reported Wednesday. That’s a lot — the biggest year-over-year percentage decline since April 2011, when the housing bust was still busting.

It is also within the margin of error. The Census Bureau doesn’t go out and count every home sold. It takes a sample, and it estimates that there is a 90 percent likelihood that actual home sales nationwide in September were somewhere between 26.8 percent lower than a year before and 0.4 percent higher. The midpoint of that range is 13.2 percent.

 

There was one region of the country, though, where home sales were definitely down by a lot. That would be the Northeast, where new home sales fell year over year at a rate somewhere between 31.2 percent and 71.4 percent (midpoint: 51.3 percent).

 

Why might this have happened? Nationwide, rising interest rates would seem to be the obvious culprit for any decline in home sales. The average 30-year fixed mortgage rate was 4.85 percent as of Oct. 18, up from 3.88 percent a year before and higher than it’s been since 2011, according to Freddie Mac.

***

But there’s this other thing that’s weighing on the Northeastern housing market: the provision in the Tax Cuts and Jobs Act passed by Congress and signed into law by President Donald Trump in December that restricts deductions for state and local taxes (aka SALT) to $10,000 a year. Some homeowners in states with (1) high housing prices and (2) high property tax rates will see much bigger tax bills as a result. Those homeowners happen to be concentrated in the Northeast. 

***

The SALT effect seems to be showing up in prices as well, with the New York area (which includes suburban counties in Connecticut, New Jersey and Pennsylvania) the worst performer this year to date among the 20 metro areas tracked by S&P CoreLogic Case-Shiller Home Price Indices.

 

Existing home sales have declined even more rapidly in the West than in the Northeast. But that seems to be more about high prices than the loss of the tax deduction.

***

So blame the Federal Reserve and the stronger economy (and maybe the rising federal deficit) for any national housing slump. In the Northeast, though, you can thank the authors of the Tax Cuts and Jobs Act.

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Weyerhaeuser funds wood product truck driving program in Maine

Weyerhaeuser funds wood product truck driving program in Maine | Timberland Investment | Scoop.it
Wood products and timberlands giant Weyerhaeuser is teaming up with a Maine technical center to build upon a commercial driver's license training program.
 
Tri-County Technical Center in Dexter, Maine will train high school junior and senior students how to load and drive logging trucks. Students - a maximum of 10 to start - will have the opportunity to either intern with a company during summer months or be selected for an apprenticeship opportunity leading to full-time employment, reports Mainebiz. 
 
Maine is the only state in the country that trains and licenses students under 18.
 
Weyerhaeuser is funding the program because of an overall driver shortage, say program runners. A logging truck driving instructor is being searched for. 
 
The program could begin as early as November.
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Justices hear Weyerhaeuser, federal frog fight

Justices hear Weyerhaeuser, federal frog fight | Timberland Investment | Scoop.it

As the Supreme Court of the United States returned from its summer recess on Oct. 1, one of the first issues heard during its new term involved a timber giant with a major presence in Columbia County, a rare frog and a challenge of the U.S. Endangered Species Act of 1973.

 

In the case, which has been appealed all the way to the high court since 2012, the Weyerhaeuser Company—owner and operator of a veneer plant in Emerson and a nursery in Magnolia—and a Louisiana landowner are at odds with the federal government over 1,544 acres in St. Tammany Parish involuntarily deemed a "critical habitat" by the federal government for the endangered dusky gopher frog. The problem, though, according to the petitioner, is that the frog has not called the acreage home since 1965 and the land as it exists now cannot support the animal.
***
The matter began in 2011 when, according to a Sept. 13 New Orleans Times-Picayune report, the federal fish and wildlife agency classified thousands of privately-owned acreage in Louisiana as a possible breeding ground for the amphibian. The dusky gopher frog, also called the Mississippi gopher frog, is currently only seen in the Magnolia State, where approximately 100-150 still live in the wild just north of Gulfport, Miss.

 

The Louisiana land, owned by New Orleans resident Edward Poitevent and his family, is, according to the wildlife agency, the only area in the country that the frog could potentially rebreed if its natural homelands in Mississippi suffered a major drought and displaced the animal. But the acreage now, according to an Oct. 1 report by the Property and Environment Research Center, is full of lush commercial-grade timber and not suitable for the frog.

 

To convert the land into a proper habitat, an abundance of the existing pines would need to be chopped down, new variations of foliage planted, and further accommodations made, including regular controlled property burns and clearing of the land. The Endangered Species Act also places certain restrictions on the area that would likley severely hinder most future development plans or industrial timber farming.

 

Poitevent claimed the endangered species "habitat" tag placed on his acreage—due in no small part to a tract that includes five ephemeral (seasonal) ponds suitable for the frog's breeding—would devalue the parcels to the tune of $34 millions of dollars. It would also cost him personal expenses to convert the property for the frog even as it has not called the area home for more than 50 years.

 

Weyerhaeuser Company, which filed the 2012 suit against the federal wildlife agency, has interest in the matter since it currently holds a 140-acre timber lease on the Poitevent family land that does not expire until 2043.

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Man Who Steered Timber Subsidy Program Calls It His Biggest Regret

Man Who Steered Timber Subsidy Program Calls It His Biggest Regret | Timberland Investment | Scoop.it

One of the architects of a federal program that pays farmers to plant cropland with trees or grasses says the decades-old subsidy is his “biggest professional regret,” partly for the way it has distorted markets for Southern timber.

 

Trees planted in the late 1980s and early 1990s with help from the program are now ready to harvest and flooding the market, adding to a glut and depressing prices for Southern yellow pine. The Wall Street Journal examined the tumbling fortunes of farmers-turned-forest-owners in an article last week.

 

Mike Gunn, who served in the Reagan administration as legislative director for the Soil Conservation Service, said in an interview that he led efforts to include the Conservation Reserve Program in 1985’s Farm Bill, which was drafted in response to plunging crop prices.

 

The conservation program promises farmers with qualifying land annual rental payments for every acre of cropland they replace with trees or grasses. The aim was to prop up prices for agricultural commodities by taking fields out of rotation while also stemming erosion in ecologically sensitive areas.

 

“What was meant to be only a temporary reset turned into a boondoggle,” said Mr. Gunn, who went on to be a state legislator in Mississippi and is now a real-estate investor. “Like everything else in government that starts out with honorable intent, the CRP gained entrenched political support; then turned into a crony capitalist welfare system for well-heeled farmers.”

 

Starting in 1986, droves of Southern landowners signed up for the program. By 1994 they had planted some 2.2 million acres with pine trees, which are harvested for lumber and paper. The subsidy program paid them about $30 to $50 an acre, for up to 15 years.

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Presidential Wildfire Tweets: Right Message, Wrong Time

Presidential Wildfire Tweets: Right Message, Wrong Time | Timberland Investment | Scoop.it

Every so often, a Presidential tweet sparks a worthwhile conversation on the national stage. While President Trump is constantly criticized for his choice of words on the digital platform, two of his latest messages in question centered on the cause of the devastating wildfires that have ravaged portions of California:
“There is no reason for these massive, deadly and costly forest fires in California except that forest management is so poor. Billions of dollars are given each year, with so many lives lost, all because of gross mismanagement of the forests. Remedy now, or no more Fed payments!”
***
Under any other circumstances, the entire US forest value chain would applaud the President for raising awareness about a topic that is so often dismissed at the legislative level.
***
However, in this particular case, the President’s remarks were simply ill-informed and ill-timed. While many of the devastating wildfires in the Pacific Northwest (PNW) and much of California do indeed originate in poorly-managed forests, the current blazes that are decimating California did not start in a forest. Rather, they were sparked in a “wildland-urban interface,” which are areas where suburbs abut undeveloped wildlands—in this case grasslands. Aided by strong Santa Ana winds, the fires have quickly spread to engulf huge swaths of the state.

 

The President’s tweets also implied that the state’s forest management is to blame; however, the majority of California’s forests are federally owned.
***
The single largest contributing factor to the dangerous state of western forests has not been climate change; rather, it is almost entirely an artifact of the way that our national forests—millions of acres of timberland—have been managed since the mid-1970s. The controversy and senseless litigation that has surrounded harvesting activities on publicly-owned lands has long prevented the US Forest Service (USFS) and the Bureau of Land Management (BLM) from taking a common sense, science-based approach to managing forests to control for naturally-occurring, catastrophic events like forest fires, insect damage and disease.

 

To be clear, cyclical changes in climate undoubtedly impact western forests. Precipitation, snowpack/snowmelt, temperature, soil moisture, the density of trees, shrubs and other potential fuel—as well as the health of these trees and shrubs—all contribute to the conditions that create favorable wildfire scenarios. All of these factors are also impacted by climate variability. But in the case of the devastating fires that have grown in scale over the last few decades, it is a widely-held belief that the mismanagement of western national forests is the primary cause for the unprecedented destruction.

 

In a separate blog post we published earlier this year, we noted that forest mortality now far exceeds forest growth in western national forests. In 2017, forest growth was 48 percent of mortality while timber harvests were a mere 11 percent of what is dying annually—and this trend is on the rise. The USFS estimates that 6.3 billion dead trees were standing in 11 western states in 2015, up from 5.8 billion in 2010. Regardless of the climate variability in the region, this accumulation of dead timber is a tremendous problem that has resulted in a very dangerous situation.

 

The good news is that a successful model for managing forests to minimize devastating mega fires and disease risk already exists. We need only look to privately-owned working forests to find a solution. Working forests are managed for production and health and, while fires and infestations do occur in these forests, overwhelming incidents like those currently ravaging California are rare.

 

At a landscape level, working forests are made up of a patchwork of smaller timber tracts that are thinned and harvested at different intervals. Due to this hands-on management, the landscape-level forest has multiple characteristics that prevent catastrophic damage:

 

Because they are thinned at regular intervals, these forests do not contain as much fuel as forests that are unmanaged, and the remaining trees stand farther apart.
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Due to rotating harvest schedules, working forests are also of different age classes. Planting and harvesting tracts of timber at varying periods helps to slow down—and sometimes even stops—the spread of fire or disease.
***
Simply cloning a management style from region to region is unrealistic, as there are a number of key differences between western and southern forests. Timberland acres and tree species are dissimilar, as are the soil and terrain, elevations, climatic trends and precipitation norms just to name a few. However, key forest management practices such as regular thinnings, harvests and prescribed burns—rigorous monitoring and reacting to health issues—are pretty universal in application. For example, a 2015 study by The Nature Conservancy and the USFS showed that a 12,000-acre “doughnut hole” within a major western fire zone remained untouched by the massive Carlton Complex fire in Washington. The area survived, the researchers believe, because it had previously undergone a thinning and prescribed burn.

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Forest Resilience Bond to help fund $4.6 million restoration project to mitigate wildfire risk in Tahoe National Forest

Forest Resilience Bond to help fund $4.6 million restoration project to mitigate wildfire risk in Tahoe National Forest | Timberland Investment | Scoop.it

This summer, California experienced its largest fire in state history—the latest disaster in a growing trend towards hotter, larger, and more destructive fires. Without urgent action, wildfires will be even deadlier and costlier in years to come. The Forest Resilience Bond (FRB), developed by Blue Forest Conservation (BFC) in partnership with World Resources Institute (WRI), raises private capital to finance forest restoration today, to reduce the risk of severe fire tomorrow. With financing secured from The Rockefeller Foundation, the Gordon & Betty Moore Foundation, Calvert Impact Capital, and CSAA Insurance Group, private capital will now fund the upfront costs of forest restoration, while multiple beneficiaries share in the cost of reimbursing investors over time.
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The investment will kick off a forest restoration project protecting 15,000 acres of forestland in the North Yuba River watershed using ecologically based tree thinning, meadow restoration, prescribed burning, and invasive species management—all specifically designed to reduce the risk of severe fire, improve watershed health, and protect water resources. The restoration treatments are prescribed by the Forest Service, benefit from public comment, and rely on the work of existing restoration crews.
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The Yuba Water Agency, a utility provider that recognizes the benefits of restoration to local water and power resources, has committed $1.5 million over five years to reimburse investors. In addition, the state of California has committed $2.6M in grant funding to the project from the state’s Climate Change Investment program. The Tahoe National Forest will provide in-kind support and services and has provided all the resources associated with planning and permitting the project. The National Forest Foundation serves as one of the project’s primary implementation partners, leading much of the forest restoration work on the ground.

 

“The financing provided by the FRB provides us with the financial flexibility to accelerate the pace and scale of restoration treatments at a time when this work is needed most”, said Marcus Selig, Vice President of Field Programs for the National Forest Foundation.
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The FRB also makes a compelling case to investors. “The Forest Resilience Bond provides diversification while also benefitting our communities by making them safer,” said Linc Walworth, vice president of investments at CSAA Insurance Group, a AAA insurer offering insurance to AAA members in Northern California. “We earn a good return while helping the environment and our policyholders. What a great combination in a single investment.”

 

As the prescribed forest management techniques are applied in the North Yuba River watershed, researchers from the Sierra Nevada Research Institute at UC Merced and the Natural Capital Project at Stanford University will monitor the impacts on water supply and other ecosystem services, providing data to quantify the benefits of restoration activities undertaken. Findings from this research could help catalyze future investment in forest restoration by showing how healthy landscapes can reduce fire risks —and by identifying the best possible interventions.

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Jaguar scheme opts for forestry and farmland

Jaguar scheme opts for forestry and farmland | Timberland Investment | Scoop.it

The Jaguar Pension Plan has invested in agriculture and timber funds in a bid to diversify its portfolio and develop its exposure to opportunistic private markets.

 

According to its latest investment report, the £3.7bn scheme invested $16.5m (£12.3m) in an agriculture fund managed by Boston-based specialist Folium Capital in the year to April 5 2018. It invested the same amount in a timber fund run by the same asset manager.
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However, the Jaguar scheme has blamed diversification for recent underperformance. Losses from “diversifying assets, hedge funds and emerging markets” mean the fund lagged expectations, according to its accounts, which did not disclose the portfolio’s performance as of April 5. It said its performance over the year was led by investments in real estate and infrastructure.

Experts praise agriculture and timber investment for their diversifying benefits and inflation linkage, but say the governance burden of these investments and a small market largely restrict them to bigger funds.
***
Research by consultancy Mercer indicates that in 2018, 2 per cent of European pension schemes held part of their exposure to real assets in timberland or agriculture. Of these schemes, the average asset allocation stood at 2 per cent. The Jaguar plan sits in a range of large UK schemes with exposure to agriculture and timber.
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Timber funds invest largely in freehold land, according to Edward Daniels, a director in real asset investment manager FIM’s forestry team. Some investors own the right to the timber, as well as the land underneath it. Alternatively, they may just own the rights to the crop.
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According to reports, Folium Capital is run by former managers of the Harvard Management Company, which operates Harvard University’s $37.1bn endowment fund.
***
Timberland has received more institutional investment than agriculture because of the “fragmented nature of the agriculture market”, according to McAleer.

 

“It is mostly larger schemes that access these asset classes,” she added, “and that’s predominantly because of the governance burden”.

 

Australasia and South America are two key markets for these investments. Timberland and agriculture are, however, “very US-centric”, McAleer said.

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Judge strikes down California land use law

Judge strikes down California land use law | Timberland Investment | Scoop.it

A U.S. judge struck down a California law challenged by the Trump administration that aimed to give the state power to override the sale of federal lands.

The law unconstitutionally regulates the U.S. government and discriminates against people seeking to buy federal public land, Judge William Shubb in Sacramento ruled Thursday.

State lawmakers who passed the law — SB50 — last year cited concerns that the Trump administration would allow more logging, oil drilling or development on some of the 46 million acres owned by the federal government in California.

Gov. Jerry Brown signed the law a year ago, and it went into effect in January. The U.S. Department of Justice filed its lawsuit in April — one of several the administration has filed against California as the state seeks to thwart President Donald Trump’s policies.
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The law sought to give the commission the first right to purchase federal lands or to arrange for a specific buyer and included fines for failing to do so.

The DOJ argued in its lawsuit that California had no power to interfere with federal land sales, citing the Constitution and the 1850 act of Congress that admitted California to the union.It said the state law was delaying land sales — even for projects that had been in the works for years — and was depressing their value.
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Shubb rejected the state’s argument that the law regulated land buyers, not the federal government.

The law “trespasses on the federal government’s ability to convey land to whomever it wants,” the judge said.

It also singles out people who do business with the federal government, Shubb said, subjecting them to a “level of uncertainty and potential delay that all others are spared from.”

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In One Week, Georgia’s Timber Damage Estimate More Than Doubles To About $763M

In One Week, Georgia’s Timber Damage Estimate More Than Doubles To About $763M | Timberland Investment | Scoop.it

Hurricane Michael is continuing to have a severe impact on Georgia’s timber industry. 

 

The latest damage estimate has more than doubled from last week’s numbers. About a week ago, Georgia Forestry Commission officials estimated the state’s timber loss at more than $374 million. 

***

Now, the damage estimate is at more than $762 million.

 

Georgia Agriculture Commissioner Gary Black, who also released the latest data, calls the assessment “unfortunate” for the state’s forestry community.

 

“This number went in the wrong direction and will undoubtedly have a significant impact on the industry for years to come,” he said, in a statement. “As more information continues to be gathered regarding Hurricane Michael’s impact on Georgia’s diverse agricultural economy, we will continue to pray and work for all the communities impacted by this catastrophic storm.”

 

Georgia is one of the top states in the nation for timber exports.

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Rayonier Inc. (RYN) CEO Dave Nunes on Q3 2018 Results - Earnings Call Transcript

Rayonier Inc. (RYN) CEO Dave Nunes on Q3 2018 Results - Earnings Call Transcript | Timberland Investment | Scoop.it

Executives

Mark McHugh - SVP and CFO
Dave Nunes - President and CEO
Doug Long - SVP, U.S. Operations

Analysts
Collin Mings - Raymond James
Ketan Mamtora - BMO Capital Markets

 

Collin Mings

***
Mark, you've spent a lot of time discussing Timberland markets and just return to the asset class over time, just kind of against that backdrop, just maybe talk a little bit about what you're seeing in terms of deal flow. It looks like you guys made a total of about $7 million to $8 million in Timberland acquisitions during the quarter.

 

Mark McHugh

I guess, it had a very high level and I'll invite Doug or Dave to comment as well. I'd say we continue to see a pretty robust Timberland M&A market.
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But overall I'd say we continue to see a pretty steady pace of activity and just to be clear, I'd say the Timberland market as a whole doesn't tend to overreact to the noise that we see in the market around kind of monthly housing stats and things of that nature.
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Keep in mind, this is an asset class, it's underwritten on a 25-year to 50-year DCF assuming making assumptions regarding long-term sustainable harvest flows and trendline prices and so you know, we tend to not see the private market correct meaningfully relative to these statistics that we see coming on a regular basis. I'd say the China situation is certainly creating some noise in the market.
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But I'd say overall, discount rates, maybe there's been a bias towards seeking higher IRRs in transactions given the rise in interest rates, but again, Timberland tends to be valued on a real DCF basis and so while the overall interest rate environment fluctuates, it is certainly up over time. I wouldn't say people's view of real long-term discount rates have changed significantly.

 

Ketan Mamtora

***
And then just turning to sort of U.S. south on the domestic side, have you seen with this sharp drop in lumber prices, have you seen any signs of people pulling back on these sawmill projects that have really come up quite a bit over the last 12 months? Are you seeing any signs of people either postponing it or pulling back? Or even sort of any signs of kind of caution on bidding for stumpage?

 

Doug Long

Yes, it's Doug again. So we haven't heard of anybody pulling back on their projects. Again, I think a lot of people feel that this is a short term thing and not the long term. So, I think they are continuing moving forward. And delay that we have heard of so far on the sawmills have been more around resourcing and getting equipments and people to work on the projects. So we haven't heard of anyone who specifically said they are pulling back based on kind of what we believe is going to be a short-term correction. On the stumpage side, as probably we have talked about for the last couple of quarters, we didn't see our southern stumpage prices run up with the lumbar. And we also haven't seen them go down with the lumber. So they haven't been correlated to lumber prices at all. And so, I guess while it would have been nice to see them run up with the lumber, the other side of equation they have been very stable and we have just continued moving forward with what's been going on for the rest of the year.

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PotlatchDeltic Corporation (PCH) CEO Michael Covey on Q3 2018 Results - Earnings Call Transcript

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

Analysts
John Babcock - Bank of America Merrill Lynch
Paul Quinn - RBC Capital

 

Michael Covey
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We expect lumber demand will continue to grow faster than supply and that industry operating rates will remain healthy. Factors on the demand side that give us confidence include a healthy rate of household formation, strong employment and wage growth, higher consumer and homebuilder confidence and the fact that houses remain affordable relative to historic levels.

 

It's important to keep in mind that there been a significant amount of noise in the recent housing start statistics including the effect of two major hurricanes and torrential rainfall in Texas. The largest homebuilding market in the country, single family housing units which use about three times as much lumber as multi-family units are up almost 5% year-over-year.

 

In addition, the repair and remodel market segments should remain strong through the old age of U.S. housing stocks and strong home prices. The repair and remodel segment has been growing in the mid to high single digits and accounts for about 40% of lumber demand which is a bit more in new home construction.

 

On the supply side of the equation, it appears that Canadian producers have meaningfully reduced the supply overhang caused by transportation issues in the first quarter. Over the longer-term, fiber availability will constrain Canada's ability to supply the U.S. market.

 

Continuing with a supply theme that is well documented, the lumber capacity additions in the U.S. south will be measured. There are only two major sawmill equipment suppliers and each is requiring deposits to secure a place in line. As we think about the demand and supply dynamics, fundamentals appear much stronger than the current lumber pricing environment.

We expect improvement once we move past what is seasonally the weakest part of the year as well as recent weather disruptions. Field inventories are low which should support pricing recovery.
***
John Babcock

Okay. Thank you. And I was wondering more on the topic of lumber and pricing trends and the fundamentals there, if you could talk first about -- first of all about where inventory stand in the supply chain now versus where they were about a month or two ago? And then also just generally how market conditions look right now and what you think it will take for lumber prices to change directions?

 

Eric Cremers

Yeah, John. This is Eric. Our sense of it talking to our customers is that the inventories in the supply chain are relatively low levels, yet there's plenty of demand and order books are relatively strong. I think there was a Forest products conference that [indiscernible] had out in San Francisco here not too long ago and they reported that inventories were at incredibly low levels, a half months of supply compared to what typically might be one and a half months of supply.

 

So our sense of it is that inventories are relatively low, which gives us optimism going forward that once the seasonal slowdown in housing turns the corner and demand picks back up again that order books with them being strong will get some firming of prices. You're also starting to see some curtailments out in the West, several mills have announced downtime which ought to help the supply demand balance. So like most pundits who were forecasting prices are up I think 10% Q1 versus Q4 that's roughly our outlook as well.

 

So we think we're as Jerry said earlier, we're at or near the bottom in lumber prices and we think we're about to turn the corner.
***
Paul Quinn

Yeah, that's pretty helpful. Maybe just maybe on that timber, we've seen interest rates come up, what are you seeing in that market especially in the U.S.?

 

Michael Covey

Well, we just we just closed on a couple of thousand acre acquisition here a couple weeks ago and what I'd tell you discount rates are we got what we think we got a very attractive transaction here it was a 6% discount rate, but with some 1031 like kind exchange tax benefits it turns out to be about a 9% discount rate. So I don't know that anything is materially changed though if you compare to where we were a year or two ago. We also lost that transaction a couple of months ago that had what we think was a discount rate of 3.5 %. So timber still a highly sought after asset in the South in particular.

 

Paul Quinn

What is driving that strong demand in the U.S. I mean it's obviously got to be disappointing over the last decade. We haven't seen any material increase in sawlog prices on the selling of pine side, so what is driving that demand?

 

Michael Covey

Well, you're right. There haven't been any price increases over the last decade. It has disappointed industry observers. But we talked about a little bit earlier that there's a lot of mill capacity that's going to be coming online in the next those two, three, four years. Our estimates that sawlog demand is going to go up anywhere from 15 to 20 million tons per year that should put the South back into supply demand balance. And when that does you'll see price movements, the same opportunity isn't there on the West Coast or in other parts of the country. I think that's where the opportunity is in the U.S. South.

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No. 1 issue for Maine's trucking industry? A serious shortage of drivers

No. 1 issue for Maine's trucking industry? A serious shortage of drivers | Timberland Investment | Scoop.it

Maine's trucking industry is booming, helped by a strong economy and industries with an increased need for trucking services. But there's one serious impediment to trucking's continued growth.

"The driver shortage is the very No. 1 issue in the trucking industry right now, bar none, hands down," says Brian Parke, president and CEO of the Augusta-based Maine Motor Transport Association.

Two of Maine's biggest trucking companies, both based in Bangor with additional facilities elsewhere in and out of Maine, are on the lookout for drivers. Hartt Transportation could use 55 to 60 more in Maine and more in other regions, up to 100 overall. Pottle's Transportation could use five or six more. Pottle has 230 drivers and 183 tractor-trailers in Maine and South Carolina.

"We need to be able to fill our trucks and continue to grow, because the business climate in Maine, over the last few years, has grown tremendously, with more businesses opening up, expanding and having the need for us to provide our services," says Hartt President Jeff Castonguay. "The problem is, we can't find enough qualified drivers. The other big issue is lack of mechanics. We have to make sure our equipment is well-maintained."
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The shortage of drivers and mechanics is tied to demand for trucking services, and that is a product of a strong economy.
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Maine's situation reflects the nation's. By 2026, the nation will need 175,000 more drivers, according to the state trade association.

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How technology is transforming B.C.’s forest industry

How technology is transforming B.C.’s forest industry | Timberland Investment | Scoop.it
For forest companies like TimberWest, the health of the trees and associated ecosystems are paramount. From seedling to maturity, the trees must be monitored, and any problems addressed. The way in which this monitoring happens is changing dramatically through the convergence of new sensing technologies such as LiDAR and the ability to deploy sensing technology using drones.  

What was once used only for air space and meteorological research, LiDAR – which stands for Light Detection and Ranging and is commonly referred to as airborne laser scanning – is now being used for forest research to more accurately examine everything from the height and diameter of trees to ground terrain evaluation and plot-level wood volume estimates. 

In the just-released video Forest for the Trees: How technology is transforming B.C.’s forest industry, University of British Columbia (UBC) forestry professor Dr. Nicholas Coops emphasizes LiDAR and drone use are just two more recent examples of the forest sector's technological revolution, and the types of technology incorporated into every-day forest management.  

“This link between technology and forestry has always been there. I think now it just happens to be exploding at the moment,” Coops says.  

Coops explains LiDAR technology can be used with airplanes or drones and involves sending pulses of light down to the ground that bounce back and mirrors the data captured into images that allow forest planners to measure the topography, depth, height, slope and other values of the land being surveyed.

Domenico Iannidinardo, TimberWest’s vice-president of sustainability and chief forester, says he sees great value in LiDAR technology and drones when it comes to forest management and planning. LiDAR can provide a wide range of enhanced ecological applications such as evaluating microhabitat diversity and watershed modelling. Through the use of LiDAR, forest planners can rapidly and accurately produce three-dimensional data-sets, which allows them to better assess road building opportunities, stand value and wood quality, resulting in more efficient inventory management. 
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National forest logging on upward track, official says

National forest logging on upward track, official says | Timberland Investment | Scoop.it
The volume of timber cut from Northwest national forests is increasing due to collaborative planning and growing state involvement in logging projects, according to an Oregon forest supervisor.

For example, the Willamette National Forest — Oregon’s foremost timber producer and a regular top contender nationally — aims to generate 100 million board-feet in 2020, up from about 75 million to 80 million board-feet in 2018, said Tracy Beck, the forest’s supervisor.

Last year, 66 million board-feet were harvested from the forest, according to federal statistics.

Contrary to the common belief that federal logging projects are being tied up in litigation, lawsuits have only been a filed against a handful of the hundreds of projects in the area, Beck said at a recent timber industry tour in Corvallis, Ore.

“We’re winning most of those cases,” he said. “I really feel like collaboration has helped keep us out of court.”

Collaboratives are groups, such as nonprofits, that help steer the federal government’s thinking on logging and thinning projects and build agreement among the timber industry, environmental groups and others.

Another recent tool that’s expected to increase timber volume from national forests is the “good neighbor” authority granted by Congress in 2014 that allows state governments to carry out projects on federal land.

While such logging projects are still subject to federal environmental laws, states have more flexibility with contracting rules and are able to carry out projects more effectively, said Mike Cloughesy, forestry director of the Oregon Forest Resources Institute, which organized the tour.

Federal contracting regulations are more complicated and have set wages for certain jobs — such as road crews — whereas state regulations allow for more cost-efficiency, he said.
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September Housing Starts Disappoint After Devastating Hurricane Season

September Housing Starts Disappoint After Devastating Hurricane Season | Timberland Investment | Scoop.it
US housing starts dropped more than expected in September due primarily to flagging numbers out of the US South, which has been recovering from the catastrophic effects of Hurricane Florence.  (While it will likely impact housing activity next month as well, Hurricane Michael also affected the region but technically made landfall in early October). Starts in the South—the US region that accounts for the bulk of homebuilding—plummeted nearly 14 percent last month, which was the largest decline since October 2015.
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Tallest timber tower in Western hemisphere proposed for Milwaukee

Tallest timber tower in Western hemisphere proposed for Milwaukee | Timberland Investment | Scoop.it

Developer New Land Enterprises, Korb + Associates Architects and the Milwaukee office of engineering firm Thornton Tomasetti unveiled the design for a proposed 21-story, 410,000 square-foot, mixed-use mass timber tower in downtown Milwaukee.

 

At 238 feet tall, Ascent is poised to become the tallest timber structure in the Western Hemisphere. Currently in the planning stages, construction is anticipated to begin in fall 2019. The team was invited to present at the prestigious Council on Tall Buildings and Urban Habitat Conference in Dubai on October 20 to share the plans with architects, engineers and planners from around the world.

 

As cities continue to grow taller and material resources become more precious, the demand for new technologies and sustainable materials continues to rise. The advantages of mass timber are well documented, but only recently have U.S. building codes opened the door for this revolutionary high-rise structural system.

 

Mass timber performs as well as, or better than, traditional materials in fire, earthquake and wind conditions. The laminated timber beams, slabs and columns in mass timber structures can be one of the world’s greatest man-made storehouses of CO2, absorbing as much carbon dioxide as produced by 2,100 cars or saving enough energy to power 1,000 homes per year. The building industry is a leading contributor to carbon emissions, and the use of mass timber as a construction material can lead to positive change in the environment.

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Hurricane Michael’s effect on timber industry "catastrophic"

Hurricane Michael’s effect on timber industry "catastrophic" | Timberland Investment | Scoop.it

Hurricane Michael’s enduring legacy could include long-term damage to Florida’s timber industry.

 

While experts try to get a handle on the carnage, state Agricultural Commissioner Adam Putnam said Friday that preliminary estimates peg it at $1.3 billion across nearly 3 million acres. The storm also damaged pulp mills, sawmills and other production facilities in 11 Panhandle counties.

 

"This is a catastrophic loss to the forest industry in the Florida Panhandle," Putnam said.

 

The storm snapped trees like so many matchsticks. Some could be salvaged for pulp, but many will be left where they fell, which raises another concern.

 

"As the downed forest debris dries, the potential for wildfire conditions increase," said Jim Karels, state forester and director of the Florida Forest Service. "It is critical for the Florida Forest Service to continue clearing trees and hurricane debris from roadways to reestablish fire lines and accessibility to timberlands."

 

Florida has more than 17 million acres of forestland, mostly in the northern half of the state. Almost two-thirds is privately owned, with most of the rest split nearly evenly beat state and federal governments.

 

Timber employs about 120,000 people and contributes $25 billion to the state’s economy, according to the Florida Forestry Association.

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