Supply-Demand Issues Hold Timber Markets Flat

The factors of supply and demand are at work in the timber markets, impacting stumpage (standing tree) prices paid to tree growers for timber products, from large lumber-size trees for home building and other construction projects to smaller pulpwood-size trees for the paper and packaging industry.

Marshall Thomas, president of F&W Forestry Services, Inc., one of the nation’s leading forestry management and consulting firms, wrote in his company’s quarterly newsletter, The F&W Forestry Report, that while the long term outlook for forestry remains good, in the short term tree growers should not expect much in the way of change from the timber markets.

“While housing starts continue to ease upward along with lumber prices during the third quarter, prices paid to landowners for pine sawtimber stayed flat—a condition that is unlikely to change until housing starts rise considerably,” Thomas said. “Even then, it is likely to take some real wet weather or another supply disturbance to put real pressure on pine sawtimber prices.”

Thomas also reports that while prices for pine pulpwood eased somewhat during the quarter, they “remain high enough to provide an economically viable alternative to sawtimber management in some regions.”

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F&W Utilizing Drones in Forest Management

F&W Utilizes Drones To Provide Landowners With Innovative, Cost Effective Ways To Manage Their Forests

By Stephen Logan, Manager, F&W’s Forest Inventory GroupDCIM100MEDIADJI_0355.JPG

The Federal Aviation Administration (FAA) recently implemented new regulations for the commercial operation of unmanned aerial systems (UAS), commonly referred to as drones. With these changes, F&W is poised to become a leader in forestry aerial imagery acquisition and analysis. From geo-referenced imagery to 3D models of the forest, the sky is the limit. Forestry projects that previously required expensive manned aircraft and clear weather can now be accomplished in a cost effective and timely manner.

Prior to August 29, 2016, the FAA mandated that any company looking to use UAS for any purpose deemed as furthering a business had to obtain a special exemption. That exemption approval process was burdensome, costly, and time consuming. The new FAA regulations create a drone certification process for low-risk commercial UAS flights and individuals can become certified to operate UAS aircraft by meeting certain conditions, including:

  • Passing an initial aeronautical test and retesting every two years;
  • Passing a background check by the Transportation Security Administration;
  • Be at least 16 years old;
  • Make the UAS and any required documentation available for inspection by the FAA; and
  • Report any accident that results in injury or property damage greater than $500 to the FAA within 10 days.

Technology researchers at F&W have been preparing for the new rules for several years by testing and flying drones under a recreational status. They have also been working with peers in Uruguay to take advantage of the new technology. This has allowed F&W to vet hardware and software to best meet the needs of the forest landowner as well as develop innovative ways to use the technology.

From the simplest standpoint, the UAS allows the user to capture up-to-date aerial imagery for mapping purposes. A major benefit to the landowner is harvested acres can be calculated in an efficient manner. Previously a forester would traverse the boundary with a GPS unit and provide the results to a Geographic Information Systems (GIS) technician to clean and incorporate into client maps. This was a time consuming, expensive, and sometimes dangerous process.

When using the UAS, the forester simply finds an open area to launch the UAS, plans the flight using specialized software, and monitors the UAS to ensure it safely completes its assigned task. The resulting imagery is provided to GIS analysts to complete the process and create updated maps and information for clients. UAS technology is more efficient and offers significant savings in manpower time when compared to the previous GPS methodology.

Other uses for the UAS captured imagery include property inspection, harvest status checks, weather damage, and herbicide efficacy.

A couple of key applications where F&W has used the UAS for is Southern Pine Beetle inspection and Cogon grass infestation location. Both of these are easily identifiable from the air and extremely important to detect early to prevent spreading.

More in-depth analysis can also be completed with information captured from the UAS. Digital elevation models (DEM) can be created from the point cloud of data generated by the UAS. This provides an elevation for each image pixel and allows analysis of land features such as stream locations, tree heights, and tree canopy gaps. It also enables the GIS analyst to create 3D models of the forest. Imagine being able to view your property in 3D without leaving the home or office.

UAS technology offers landowners new and innovative ways to manage their forests and the opportunities it offers for the future are even more exciting. F&W is currently working on completing plantation survival and young stand inventories based on imagery only. In addition, combining UAS imagery and less intensive traditional sampling methodology can improve the efficiency and accuracy of samples of merchantable forests.

With the easing of restrictions on commercial drone use, F&W is taking advantage of the technology to provide its clients with cutting edge deliverables in a timely and cost efficient manner.

For more information about F&W’s UAS services, contact Stephen Logan at slogan@FWForestry.com or (229) 883.0505, ext. 148.

Overall Farm Land Values Dip in 2016 But Up In Southern Pine Belt

Agricultural land values decreased slightly in 2016 but rose in several Southern pine belt states, according to the annual survey conducted by the U.S. Department of Agriculture (USDA).

“The United States farm real estate value, a measurement of the value of all land and buildings on farms, averaged $3,010 per acre for 2016, down $10 per acre (0.3 percent) from 2015 values,” the USDA reported.

That’s in contrast to an overall increase of 2.4 percent in 2015 and 1.1 percent in 2014.

Land values in F&W’s service areas, which comprise the Southern pine belt plus New York, rose 2.5 percent overall to $3,351/acre.  Within the F&W service region, West Gulf states (Arkansas, Louisiana, Mississippi and Texas) showed an increase of 1.7 percent, while the Southeast averaged an overall increase of 0.8 percent.  Land values in the Mid-Atlantic region (North Carolina and Virginia) and New York showed a decrease of 0.8 percent and 0.7 percent, respectively.

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F&W Utilizing Drone Technology In Managing Forests

New Federal Aviation Administration regulations for the commercial use of unmanned aerial systems (UAS)—better known as drones—have opened the door for innovative and cost effective ways to assist landowners in managing their forests.

Stephen Logan, F&W’s Forest Inventory Group manager, said F&W has positioned itself to become a leader in forestry aerial imagery acquisition and analysis.

“Technology researchers at F&W have been preparing for the new rules for several years by testing and flying drones under a recreational status,” Logan said. “This has allowed F&W to vet hardware and software to best meet the needs of the forest landowner as well as develop innovative ways to use the technology.”

UAS’s are used to capture up-to-date aerial imagery for mapping and other forest management purposes such as property inspection, harvest status checks, weather damage, and herbicide efficacy.

With the easing of restrictions on commercial UAS use, F&W is taking advantage of the technology to provide its clients with cutting edge deliverables in a timely and cost efficient manner.

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Mixed And Worrisome Indicators Impact Timber Markets

The prices landowners received for trees in the second quarter of 2016 were flat-to-down, depending on the product and the region, reports the head of one of the nation’s largest forest management firms.

Marshall Thomas, president of F&W Forestry Services which operates across the major forested regions of the U.S., reports in his firm’s summer newsletter that there are mixed and worrisome indicators that are impacting timber markets.

“We were forecasted to be in a full housing recovery by now,” Thomas writes in the latest edition of The F&W Forestry Report. “It’s clear that landowners aren’t feeling a recovery, either in their attitudes or their pocket books.”

“All in all, this wasn’t a great quarter to report on, but long term forecasts still support a recovery—we just have to be patient,”

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Green Building Rating System Opens Door To Other Wood Certification Standards

The U.S. Green Building Council (USGBC), the governing body for the Leadership in Energy and Environmental Design (LEED) green building rating system, has instituted a new program that will allow for green credits to be given for wood products certified under forest certification standards other than the Forest Stewardship Council (FSC).

Until now the LEED rating system only awarded credit to wood and wood products certified under the FSC standard. This preferential treatment has had the effect of excluding locally grown wood products in LEED approved projects while favoring wood products from FSC-certified forests, much of it imported from other regions and abroad.

Forestry groups have been working for years to have the USGBC recognize additional forest certification systems, including the American Tree Farm System (ATFS), the Sustainable Forestry Initiative (SFI), and the Progamme for the Endorsement of Forest Certification (PEFC) in addition to FSC.

The new Alternative Compliance Path (ACP) credit is “designed to further advance environmentally responsible forest management and help rid our buildings of illegal wood by promoting the use of wood that is verified to be legal,” according to USGBC.

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Chinese Company To Build New Pulp Mill In U.S.

A new full-scale pulp and paper mill is coming to the U.S. South—the first one in more than 30 years.

Paper manufacturer Shandong Sun Paper Industry of China said it will build a new pulp mill that will cost between $1 billion and $1.3 billion in south Arkansas at Arkadelphia.

South Arkansas is known for its abundant timberlands and the new mill is expected to have an annual economic impact of up to $100 million on the forest industry in that region. Construction of the mill is expected to begin in the first half of 2017 with production tentatively set for late 2019.  The mill will be Sun Paper’s first plant in North America.

The last “greenfield” pulp and paper mill to be built in the Southern U.S. was in 1985 at Eastover, S.C., by Union Camp Corporation at a cost of around $600 million. International Paper, which purchased Union Camp in 1999, continues to operate the pulp mill and two paper machines at the Eastover facility.

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Timber Prices Remain Flat Despite Wet Weather

While the New Year started off on a promising note with housing starts on the rise and predictions of a wet winter ahead, timber stumpage (standing tree) prices remained steady to declining in the first quarter of 2016, the head of one of the nation’s largest forest management reports.

Marshall Thomas, president of F&W Forestry Services, Inc., one of the nation’s leading forestry management and consulting firms, reports in his firm’s quarterly newsletter that timber prices didn’t “kick-up” as anticipated in the first quarter.

“Unfortunately, while we had plenty of wet weather, prices didn’t go up much or stay at increased levels long,” wrote Thomas.  “Just another illustration that we still have a supply/demand problem for sawtimber in the U.S.”

“Worse yet, housing starts stayed flat during the first quarter, once again moving upward more slowly than most forecasts,” Thomas added. “We are certainly in a recovery but it is slow and dull.”

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F&W Managers Report Tree Planting Up During 2015-16 Planting Season

A survey of F&W managers across the Southern pine belt finds tree planting up in most regions during the recent 2015-16 planting season.

Landowners appear to have accepted that timber markets will not return to the pre-2008 levels any time soon and are proceeding with harvest plans, several managers reported in the survey.  In regions where pulpwood prices are strong, managers said that some landowners are moving to a pulpwood rotation to take advantage of the narrowing gap between pulpwood and sawtimber prices.

The trend of increased reforestation is in-line with a recent report from the U.S. Forest Service that estimates that tree planting across the 13 state Southern wood basket rose five percent to 1.8 million acres in the 2013-14 planting season, the latest data available.

The F&W survey was based on data and observations of 14 managers in nine states.

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Supreme Court Stays CPP

A surprise ruling by the U.S. Supreme Court has halted implementation of the Clean Power Plan (CPP), the Obama Administration’s policy to address climate change by promoting renewable energy and reducing U.S. dependence from fossil fuels, most notably coal.

Shortly after the Environmental Protection Agency began implementing CPP in 2015, opponents—primarily coal-using utilities and mining companies—filed suit in 26 states to reverse the rule.

The U.S. Court of Appeals of the District of Columbia will now consider the merits of the multiple challenges to CPP, with the stay remaining in place for the duration of the court’s proceedings and any subsequent action by the Supreme Court.

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