Timber Prices Flat In 2016; Washington Changes Create Challenges/Opportunities
Timber markets didn’t have a great year in 2016. A lackluster home building sector, dry weather conditions, and increased Canadian lumber imports into the U.S. combined to hold timber prices in place.
“Housing starts stayed relatively flat and so did our (timber) stumpage prices,” wrote Marshall Thomas, president of F&W Forestry Services, Inc., in the winter edition of his company’s quarterly newsletter.
However, Thomas said the change in weather patterns towards the end of the year will hopefully give a boost to timber prices in the coming months.
Anticipated changes in Washington could also have a big impact on timber markets and the forest industry.
“Changes in taxes and trade positions could have dramatic impacts and we just don’t know which way that will go right now,” Thomas said.
“This election upset may lead to some economic changes that benefit us—let’s hope for the best as the new president sets up his administration and begins to set policy,” said Thomas. “It is a good time to get more involved with your Congressmen and Senators to make sure they are on their toes in terms of our specific forestry issues.”
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Sweeping Changes In Washington Likely To Be Felt By Forest Industry
While the November election answered one question—who will lead the U.S. for the next four years—it raised many more. President-elect Trump and the Republican majority in Congress are now embarking on the complicated task of implementing new domestic and foreign policy agendas. Many of the policy changes expected to be considered are likely to have a significant impact on forestry, particularly as it relates to taxes, the environment and trade.
A major overhaul of tax laws, which has long been a goal of Congressional Republicans, could result in the elimination of several tax provisions that are very favorable to forest landowners, including the treatment of most timber sales as capital gains and deductions related to operating and management costs. It could also result in the elimination of the estate tax, otherwise known as the “death tax,” which could benefit family forests.
Forestry is expected to fare well under Trump’s pick to lead the Environmental Protection Agency. Scott Pruitt, the current Attorney General for Oklahoma, is expected to dismantle many of the onerous rules and regulations put in place during the Obama administration. And the administration’s new foreign trade policies could have a mixed effect on U.S. wood markets.
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While Talks Stall, U.S. Lumber Producers Petition For Relief
With negotiations between the U.S. and Canada at an impasse for a new Softwood Lumber Agreement (SLA), which expired in October 2015, a coalition of U.S. lumber producers has moved forward on another track and filed petitions with two U.S. government agencies requesting the imposition of import duties on Canadian lumber.
The Committee Overseeing Action for Lumber International Trade Investigations or Negotiations (known as the Coalition) petitioned the Department of Commerce and the International Trade Commission in late November to “restore the conditions of fair trade in softwood lumber between the United States and Canada.”
The petition alleges that Canadian softwood lumber is being sold in the U.S. below fair market value. The Coalition said it is seeking trade remedies to “offset the harm caused to U.S. mills, workers, and communities.”
The softwood lumber dispute will likely be one of the first significant trade issues handled by the new Trump administration.
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Fountains Forestry Changes Name to F&W
ALBANY, Ga., Jan. 9 — Fountains Forestry, a leading forest management company in the Northeast U.S. acquired by F&W Forestry Services, Inc., in 2016, is changing its name to F&W Forestry Services. The name change, which reflects the company’s deepening relationship with its parent corporation, was effective Jan. 1, 2017.
Georgia-based F&W is one of America’s premier forest resource consulting, management and real estate firms. The acquisition of Fountains Forestry, which includes six offices operating in the hardwood forest regions of New England and Appalachia, was completed in April 2016.
“F&W and Fountains share many common core values, the two most important being excellence in forest management and customer service,” said F&W President Marshall Thomas. “The assimilation of Fountains into F&W has gone so smoothly that we agreed the timing was right to consolidate both forest management operations under one identity.”
F&W has more than 300 employees and manages over two million acres (900,000 hectares) of forest and woodlands worldwide.
Two other companies acquired by F&W in April, Fountains Land Inc., a retail real estate firm operating in the Northeast U.S., and Fountains Forestry UK, Ltd., a forest management and real estate firm operating in the U.K., will retain their names.
About F&W:
Established in 1962, F&W Forestry Services, Inc., of Albany, Ga., is one of the nation’s oldest and largest forest consulting and management firms. The company handles timber sales, provides comprehensive forest management and consulting services, and offers real estate service and timberland investment opportunities. The company maintains a network of 25 offices in 14 U.S. states comprising the Southern pine belt, the Central and Appalachia regions, the Northeast, and Oregon in the Pacific Northwest. F&W also manages private forestland internationally through 12 offices located in Canada, Uruguay, Brazil, France, and the United Kingdom.