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Scoop.it!
In cooperation with the Forest Service’s Pacific Northwest Research Station, the BBER has developed a new interactive tool allowing users to access timber harvest data at the county- and ownership-level for 5 western states. 
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Scoop.it!
Prentiss & Carlisle's insight:
One of several pieces in P&C's latest quarterly newsletter. I would be interested in reader feedback on the discount rate article.
Scoop.it!
A supply shock associated with the epidemic of mountain pine beetles is one of three factors which will drive a surge in timber prices throughout Canada and the United States in 2013 and beyond, a new report predicts. In its latest edition of Timber Trends, The Campbell Group LLC described 2013 as the “beginning of a long term bullish trend for the timber industry.” While this is welcome news for timber manufacturers and investors, it is not so good for builders in Canada as it will add to material costs at a time of an anticipated slowdown in housing construction. “Do you remember when you were a kid and your parents told you that money didn’t grow on trees?” forest economist and report author Bruce P. Glass asked, referring to the prospects of forestry as an asset for investment. “Unfortunately for you, what your parents told you was only partially true. Sure, dollar bills don’t grow on trees. But the trees themselves are worth big bucks.” The report quotes Grantham Mayo van Otterloo (GMO) chief investment strategist Jeremy Grantham as saying that timber prices would rise by as much as 6.5 per cent over seven years. Glass says prices could go even higher, and that three factors lie behind these expectations:
ENC Team 6's curator insight,
November 7, 2013 9:57 AM
A "supply shock" is an event that directly affects firms’ costs of production and thus the prices they charge; it shifts the economy’s aggregate-supply curve and, as a result, the Phillips curve. For example, when an oil price increase raises the cost of producing gasoline, heating oil, tires, and many other products, it reduces the quantity of goods and services supplied at any given price level. |
Scoop.it!
At times, when developing timber forecasts or reviewing timberland valuation models, we find that inflation is misunderstood. A single rising price of a single product or commodity is not inflation. Sawmills are making more money this year because lumber prices are higher than last year, not because of inflation, which tracks the overall price level. And yet, the real, relative costs and revenues affecting timberland investments and wood-using facilities do change over time at different rates and times. While cash flow estimates used to value potential investments include projections of future prices, we find honest confusion and common mistakes continue to plague the use of real and nominal rates and prices. In developing timber forecasts in the U.S., we recommend quantifying historic relationships using nominal (stated) prices that include inflation, and then adjusting for inflation if necessary. Why? Because the basis of market clearing transactions and real-time negotiations between wood buyers and timber sellers at any point are the prices as known and stated at that time in each and every local timber market given the known and available supplies and technology. As noted by timberland appraiser Jeff Wikle, “Yesterday’s (timber) price is based on yesterday’s technology.” Based on our understanding of forestry markets, this is exactly correct.
Prentiss & Carlisle's insight:
This article includes notes from Dr. Mendell’s “Accounting for Inflation in Timber Forecasts” presentation in Portland at the 2013 “Who Will Own the Forest?” conference.
Scoop.it!
Prentiss & Carlisle's insight:
This comprehensive report was submitted to the House Ways and Means Committee recently by the National Alliance of Forest Owners.
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