Timberland Investment

The windblown poplars that line Interstate 84 near Boardman will soon be cut for good.

One-third of the 25,000-acre Boardman Tree Farm sold in November to a dairy. Now, a Washington agriculture company bought the rest of the land for irrigation crops, such as potatoes.

The Boardman Tree Farm is a distinct element of the Columbia Gorge landscape. Rows and rows of millions of hybrid poplar trees run next to the highway for six miles. GreenWood Resources, a firm that manages forests as investments in timber, has owned the tree farm since 2007, and it has become a community fixture.

Each year, a charity race is held on the site. A sawmill and a veneer plant are located on the farm. The East Oregonian reports that those two companies employ about 100 people.

The poplar trees are harvested on a 12-year cycle. It will takes years to fully clear cut the tree farm.

Willow Creek Dairy, which leases land from Threemile Canyon Farms, bought 7,288 acres from tree farm owner GreenWood Resources for $65 million, according to Capital Press. The dairy is planning to use the land along the southern boundary of the farm, near Finley Buttes.

AgriNorthwest, a company from the Tri-Cities region, will use the land near the highway.

Terms of the deal were not disclosed.

GreenWood Resources has a headquarters in Portland, but manages forests and timber sales in Asia, Europe and Latin America as well as the U.S. In 2015, the company expanded its operations to near $1 billion in timber assets.

The $US866 billion ($1.2 trillion) financial services giant TIAA expects there will be at least $US100 billion invested in timberland operations and agriculture across the world in the next 10 to 20 years and has come to Australia to tell Australian super funds how to participate.

TIAA global asset management head of agribusiness John Goodreds said it was natural for TIAA to look at long-term investment horizons and that timber and agricultural land and management were "conducive" to such long-term horizons. "These areas are also driven by real fundamentals – they are goods the world needs, not just the latest trends," Mr Goodreds said. He also said they offered exposure to beta and alpha – terms used to describe the consistency of an asset's returns in response to swings in the market. "They also offer inflation protection which a lot of institutional investors are very thoughtful about today."

TIAA's two partners in agribusiness and timber, AGR Partners and Greenwood Resources, are also in Australia helping explain the importance of the emerging asset class. Greenwood Resources president and chief executive Jeff Nuss said he had been working hard to identify ways of bringing such an investment to institutional investors. The TIAA-backed Global Timber Resources Fund which Greenwood Resources runs, has raised its required capital of $US670 million. "We anticipate there is probably another $US100 billion in investment capital needed to come into the space and meet the future demand for wood."

GreenWood, an international timberland investment and asset management company operating in Oregon, aims to market the technology to choose and breed improved varieties of poplar with minimal lignin content, which eases the conversion process and eventually minimizes the total costs of biofuel production.

Researchers from the Department of Energy’s ORNL, the University of Tennessee and West Virginia University, led by Wellington Muchero, identified a gene connected to the synthesis of lignin, an important component of plant cell walls that offers sturdiness but prevents the production of biofuels. When a poplar tree is grown with reduced lignin, it would offer easier access to the plant sugars that are transformed into renewable fuels.

The team’s research demonstrated that the gene could decrease lignin content by nearly 50% and raise the ethanol production up to 250% on biomass that was not mechanically or chemically pretreated.