Forest Resource Consultants, Inc Resources: Articles

ARTICLES:

FEATURE ARTICLE

How Southern Timberland Market Trends Impact Investment Returns

Like all financial markets, southern U.S. timberland investments have consistently been impacted by changes in supply, demand, market prices, alternative investment performance, and other external influences. Knowledgeable timber investors have historically considered timberland a relatively stable, safe, and secure investment that also offers other intrinsic ownership benefits not provided by stocks, bonds or even other forms of real estate. However, neither timber nor land prices have been very stable over the past ten years. The marketplace has exhibited a number of opposing and sometimes illogical shifts in supply, demand, and perceptions regarding value. The purpose of this paper is twofold: 1) to examine timber and timberland market trends over the past decade, and 2) to quantify the probable impact of recent market changes on a long-term timber investment. For a .pdf copy, click here.

Assessment of Timber Situation in U.S....projected to year 2050

For more than a century, the United States has developed periodic national assessments of future supply and demand prospects for timber. Forecasting supply and demand is a risky but necessary business and seldom without surprises. Nevertheless, you may find the conclusions interesting and helpful in planning for the future. Managing timberland, by nature, requires us to anticipate the future. Following are a few statements from this assessment:

"...Since 1952, U.S. timber harvest has risen by nearly 67 percent. Projections to 2050 show U.S. timber harvest expanding by an additional 24 percent to meet increased consumption needs."

"...Relatively stable forest product prices are expected over the next five decades. Softwood sawtimber prices are projected to increase over the next 50 years, but softwood pulpwood prices will remain at or below recent depressed levels, then rise at the end of the projection."

"...With lumber and plywood composing a decreasing share of total forest products output, virtually all of the projected increase in U.S. harvest is in non-sawtimber trees and trees used for OSB or paper and paperboard. Click here for the summary report."

Forest Management Plan - Blueprint For The Future

Do you use your property for hunting and recreational purposes?

An IRS audit may result in deductible expenses being disallowed on grounds that your operation is a hobby rather than a venture for profit. Having a forest management plan designed for generating a profit demonstrates the profit motive and reduces the risk of legitimate management expenses being disallowed.

A good forest management program increases income, encourages continuity of management between generations, provides control and serves as a monitor of manager performance, and supports tax and estate planning. This article describes some of the elements of a well designed plan. Read more.

Motivations for Good Forest Management - Tax Incentives or Cash Subsidies?

Non industrial landowners are increasingly the target of special interest groups and government policy planners. Government programs are often designed to encourage landowners to accommodate someone else's agenda. Even though landowners, particularly in the South, have repeatedly said that tax incentives are far more preferable, subsidy payments and regulation continue to be the governments preferred method of motivating landowners to implement public policy interest. This article describes the motivational effects of tax and subsidy. Read more.

Federal Income Tax For Timber Growers

This publication, produced by North Carolina State University, is an excellent, easy to read and understand tax guide for the timber grower. For a .pdf copy, click here.

The Evolution of Southern Forestry

ISince the beginning of time, mankind has been dependent upon the products derived from the forest. From the most basic fuel for heating and cooking to the most complex construction materials and high-quality papers, the forests of the world provide raw materials utilized in enormous quantities every day. In the US South, the timber industry began simultaneously with the establishment of the original colonies and has passed through several distinct phases. The initial phase occurred during the first two-hundred years of our country’s history and is best characterized as an era of exploitation. Phase two, the growth and expansion phase, began in the 1930’s and lasted into the 1980’s. The third phase, maturity and contraction, began in the 1980’s and is continuing today. While the initial period of the industry’s history was long and consistent, the second and third phases have occurred over a much shorter period – some seventy to eighty years – during which the only consistency was change. This trend of constant change will continue as the forest products industry evolves and adapts to changing demographic trends and a global marketplace. For the full article as a .pdf copy, click here.