150 Kincaid Lane Boyce, Louisiana 71409

Vol. 9 No. 1 Spring, 1998
- For Every Thing There is a Season

…a loose interpretation of one of my favorite songs by the Byrds and from scripture verse in Ecclesiates, Chapter 3, v.1-8. I think the intent of the message to us is that there is an appropriate response to all of life’s cycles. Although we don’t always understand them at the time, we can invariably look back and see that we learned something. Recognizing that all things work towards the good, it is easier to accept those things that happen outside our control…and adjust in an appropriate manner.

The February 10, 1998 windstorm that blew through East Texas and northern Louisiana uprooted and snapped off lots of timber. The USFS estimates they have 300 million board feet of pine timber down. This is enough to run 4-6 medium size plywood or lumber mills for a year. Since the soils were wet at the time of the storm, many roots of blown down trees still have contact with the soil. This will prolong the salvage operations well into the summer. Most mills are in pretty good shape with their log inventories as they anticipate entering the dry summer months. That fact, combined with the large amount of salvage timber coming on the market, is depressing stumpage prices throughout central and north Louisiana.

The storm was not that much different from the storm that ran across central Louisiana in June 1984. Just as we were entering a time of slowly recovering stumpage prices, that storm flooded the market with salvage timber and depressed prices. It was hard to get the timber salvaged back then. Two years later we were in the midst of a Southern Pine Beetle (SPB) epidemic that drove stumpage prices even lower. In my mind, the two natural disasters were related. I believe that if you own mature timber, it would be prudent to become very attentive to the market right now. Also, keep an eye on reports of SPB activity throughout the area.

We are closely monitoring prices and are advising clients to hold off on pine timber sales in the area for the short term. As we are in a much healthier economic position than in 1984 and have improved cooperation with industry (as evidenced by the quick salvage of most private timber damaged in the storm), we are hoping that we won’t see a prolonged downturn in the market. However, the mild, wet winter we just had will most probably lead to some increases in SPB populations.

This is a time to be well informed and thoughtful concerning your forestland. There are two guidelines I suggest you consider with regards to your forestry activities: stay well-informed and develop the quality of your relationship with your forester.

We intend to use this time in our consulting business to concentrate on our forest management planning, appraisal, and real estate work. I recommend that generally you take this time to update and develop a written forest management plan and develop your relationship with your forest advisor. We do this type of work and are looking for new clients. We’d like to work with you.

Stumpage Report

1997 was an excellent year for selling pine timber. Stumpage prices improved through the early part of 1998 and turned down throughout central and north Louisiana just recently, largely because of the anticipated salvage work to be done in response to the storm discussed on page one. We have yet to see how much and how long stumpage prices may be affected. Hopefully, it will be a short blip and over soon. . We saw pine sawtimber stumpage prices rise to well over $600/MBF in some cases. Generally, we believed prices exceeding $500 were pretty good. Buyers needing tracts they could work in wet weather paid premiums for excellent timber.

A comparison of the pine sawtimber markets and overall lumber and panel prices show a strong relationship. Knowing something about the finished products helps in marketing and managing the timber resource. Generally, prices for lumber were flat in 1997, drifting downward during the last half of the year. Prices for panels were flat in 1997, although there was increased acceptance of southern pine pywood. The panel prices have been flat for the last two years, mostly due to the large increase in production in OSB. Southern lumber production in 1997 was another record, as was panel production.

Pine stumpage prices continued to make a steady climb throughout 1997 and during the first quarter of 1998. From looking at the history on the chart below, we see this was indeed the case.

The pine and hardwood pulpwood markets were very strong this past winter and spring. As we approach the summer months, the markets have subsided. The pulpwood industry is pretty healthy and prices should be about what they have been in recent years.

We still have a very strong economy. Existing homes sold at record amounts in February and March. Builders report strong demand for new housing. Strong consumer confidence, strong employment, low interest rates and steady demand for lumber and panels should help make this year a pretty good one for forest industry and landowners alike.

The potential increases in the growth and value of your timber have never been better. Professional forest management can help you realize its potential. You have everything to gain from getting professional help.

The average pine stumpage prices received in the last eighteen months by our clients as compared with the average prices reported by the state are shown in the graph below. Don’t necessarily think your timber should bring this price. There is a lot of variability in the figures. The value of timber on any specific tract depends on a variety of factors, not the least of which is professional representation when selling timber.

* Published by the Louisiana Office of Forestry

The Next Step….Fertilization

When timber management is the primary objective, landowners tend to want to maximize the productive potential of their land. Pine plantations do that more efficiently than natural stands. Genetic tree improvements are making steady gains. Competition studies encourage more exact spacing of planted trees and use of herbicides to control woody and herbaceous competition. The next step to be taken to improve growth is fertilization.

Not all fertilization stories have successful results. Remember that it is important to control the crop tree spacing and have good weed and brush control before fertilization should be attempted. We are dealing with incremental amounts of growth that need to yield benefits greater than the costs. There are a number of studies showing tremendous increases in growth.

One of the things I like to do is to watch what the timber industry does with their lands. More and more are using fertilizer on their plantations. One company who has walked down the path of fertilization began by fertilizing at mid-rotation, after a thinning. That way they could capture the benefits with a timber sale in five to seven years. They got such good response that they began fertilizing younger and younger plantations. They now are fertilizing at planting. Some folks think that fertilizing at planting encourages weed growth as much as anything else. They recommend that the trees at least be established before fertilization.

There are standard mixes of fertilizer that work. They are generally heavy with phosphorous with a large dose of nitrogen for good measure. Soil testing can and should be done to determine the amount of benefit that fertilization would bring. Pine needles can also be indicators of deficient nutrient levels.

Fertilization can be a very profitable forest management tool under the right circumstances. I expect that we will be working with more and more people throughout the next few years who have an interest in fertilization benefits as the volume and value of their timber grows. Fertilization is now in our tool kit and is available for interested clients.

Real Estate Page

We had some excellent sales in the first part of 1998. There are more buyers interested in investing in timberland than ever before. Interest in land and prices are at all-time highs. Therefore, if you are a seller, call us to help you. We are finding buyers that pay the highest amount of money for your land. If you are a buyer, call us, we have various tracts from time to time that may very well be exactly what you are looking for. We do search out and evaluate properties for people. The good news for buyers is that the market prices for land have not increased as much as the long term value of the potential income from growing timber. If you have an interest in buying or selling, call us.

We do not have any current listings but are in touch with many potential sellers and buyers every day. We are expecting to put some excellent timberland properties on the market later this year.

Whether you are interested in buying or selling, it may profitable to give us a call. We deal in properties from 20 acres to +200,000 acres.

We expect to have several tracts of timberland for sale later this year. If you are interested in buying or selling land, call Steven K. Templin at (318) 445-5566 for more information or See our Real Estate Page

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