Promoting Private Forests

Panel Highlights

Realizing a Return: How to Fully Maximize the Revenue Opportunity within Your Forest Asset

Thursday, June 2
10:30 AM – 12:00 PM

Forests provide their owners with incredible opportunities to generate real income from their property, but a full understanding of these opportunities and how to capitalize on them is a must. This panel will help attendees better understand how to optimize their property for revenue generation, prepare for a harvest event and get those materials to market.

3 Questions with Gregory Albert

Q: You’ll be talking in your presentation about the use of harvest optimization software. What kinds of decisions do landowners use harvest optimization software to guide?

Harvest planning software optimizes a landowner’s primary objective over a specified time horizon (usually 20, 50 or 100 years). The primary objective is typically to maximize value/cash flow with pricing projections, and logistical constraints or conservation goals—but it is not limited to this. The software then creates a harvest plan that has optimized thousands of decisions (fertilizations, harvests, regeneration, etc.) around the objective/constraints.

Q: What about tree genetics do think should excite forest landowners the most? Why is this such a promising aspect of modern forestry?

I think one of the most exciting parts of modern forestry is the access to advanced genetic material. Some of the breeding programs have been operating for almost 60 years and are on their 5th breeding cycle. This means consumers have access to trees of varying genetic pedigree to fit any planting budget—there is no need to plant wild unimproved trees. With breeding programs at private companies, state agencies, and university cooperatives, any good forester/forestry consultant should be able to help a landowner navigate the seedling market.

Q: What is the single biggest argument for landowners to more fully embrace data in their management decisions?

Making data driven decisions in forestry is about embracing efficiency and sustainability. The production efficiency of the land is affected in part by decisions the landowner makes about seedling selection, fertilization windows, thinning regimes and so on. These silvicultural decisions have decades of research behind them, and that can have a big impact on cash flows and land value. The sustainability of a forest system is directly related to the management decisions made today. Part of our job as stewards of the land is to set up management regimes that do not significantly reduce the production efficiency of the land over time, so our resource can truly remain renewable.

Proactive Steps to Ensure Your Forest Asset Leaves a Lasting Legacy

Thursday, June 2
1:30 PM – 3:30 PM

The passage of a tract of land from one generation to the next is complex and care must be taken to ensure that the transition of ownership is a positive event. Many new landowners likely have experience, positive or negative, on the receiving end of a land transition but may not realize the time to think about passing the asset along to their heirs is now. This panel will provide attendees with a common sense approach to the issues that most often challenge families working through a change of forest ownership.

3 Questions with Allen Nipper

Q: When is the best time for families to discuss their forestland and begin thinking about succession plans?

This one is easy. Right now. As soon as possible.

Q: So, are these conversations happening, or are landowners not addressing this important issue?

Our data and data from various university studies show that about 60-65% of landowning families have not talked to the next generation about succession plans or about management plans on their land.

Q: What is the benefit of not waiting to have conversations about succession plans, of having those conversations now?

It’s quite simply the best way to ensure that the land stays in the family. You also reduce the chances of the property being fragmented, being sold to another party, or converted to other non-forestry uses.

Free to Do Business: Understanding Your Rights as a Landowner in the Face of Increasing State and Federal Regulation

Thursday, June 2
10:30 AM – 12:00 PM

Forest landowners are well aware of the challenges introduced by increasing local, state and federal regulations, but their rights in the face of this increasing encroachment may not be as well understood. This panel will feature attorneys with deep experience with the regulations that create the biggest encumbrances for landowners, their rights in the face of those regulations and proactive steps landowners can take to prepare for existing and future regulations.

3 Questions with Jacob Cremer

Q: How would you describe the level of state and federal regulation that impacts forest landowners. Is it stable or is it on the increase?

It’s definitely increasing. That’s been the trend since 1970, which is considered the birth of environmental law. It’s also been the trend no matter what party is in power. I see two big problems right now with this increasing regulation. First, many of our regulations just don’t work. Now, it’s true that in most of the country, our environment is cleaner than it’s ever been in the modern era. Economists have done some convincing studies showing that, as people become richer, they demand a better quality environment. So we’re not paying enough attention to the role of free markets and entrepreneurship in a better environment.

Second, if the regulations do work, they are subject to diminishing returns. In that, the law is like many other human activities. We’ve harvested the low hanging fruit. Each little improvement in the future will be increasingly more expensive. Somebody has to pay for that, and somebody always does when regulations are increased. Environmental regulation is becoming more and more complex, though, and that hides the true costs and it hides who is bearing those costs.

Q: Your panel promises to talk about the ‘encumbrances’ often caused by regulation. What is a common encumbrance? Also, what are some worst case scenarios relative to regulatory encumbrances?

There are at least a couple of encumbrances that a forest landowner should know about. First is the regulation of wetlands and water bodies, under both federal and state laws. There are ongoing legal battles right now that could affect how forest landowners can build roads because of how water runs off those roads, and about when the federal government can regulate the wetlands on your property. There’s also the regulation of how land is used (usually called land use, zoning, or growth management). Sometimes just converting agricultural land from one crop to another can trigger these controls, which are usually at the local or state level.

There are some tough cases out there. The landowner has to be diligent. Sometimes the landowner will get fined even when a contractor is the one at fault. The government can then turn those fines into liens on the property and even force the sale of the property. And even when there’s a happy ending to a dispute with the government, landowners have to know that sometimes it takes a long time to protect their rights. One Florida family that asked a state agency for a permit had to go all the way to the U.S. Supreme Court to establish that the agency could not require the family to do work to the state’s culvert system miles away from the family’s property. The family requested the permit in 1994—and still isn’t quite finished!

Q: Do you find that forest landowners have a good understanding of their rights?

Forest landowners usually know the basics. Forest landowners face two big problems, though. The first is that environmental regulations are changing so quickly. A lot of times, landowners think they’re doing the right thing because their operation was in compliance a year ago, but they’re no longer in compliance. As I mentioned before, the other problem is that the regulations are so incredibly complicated that it takes the help of lawyers and several Ph.D. scientists to figure out how to comply. In the last few years, the U.S. Supreme Court has been pointing out that this complexity is an unfair burden on landowners. Together, I think these problems show that landowners have to stay diligent in thinking strategically about their properties and include regulatory burdens as a piece of the puzzle.

An Introduction to the Basics of Land and Timber Markets, Land Appraisals and Financing Timber Purchases

8:30 AM – 10:00 AM
Thursday, June 2

This panel will offer a broad overview for attendees of current land values, the markets that provide economic opportunities for landowners and the financing options available to those looking to make new or additional investments in forest property.

3 Questions with Joe Clark

Q: Simply put, what is meant by “stumpage price”?

When talking with landowners, I describe stumpage price as the price paid to a landowner for their timber while it is standing in the forest or “on the stump”. How the price is quoted to the landowner can vary depending on the type of sale, per-unit or lump-sum. Per-unit sales are generally a $/ton price for each individual product included in the sale, while Lump-Sum sales are a single dollar amount for all products included in the sale.

Q: Do stumpage prices fluctuate throughout a given year?

Yes, stumpage prices do fluctuate during any given year. There are general patterns in stumpage for each major region in the U.S. I work mainly in the southeastern U.S. so I will use that region as my example. In the southeastern U.S., stumpage prices start the year off high, as we are in our wet winter months. They then gradually fall as we move through spring into the hot, dry summer months until elevating again moving back into fall and winter.

Q: How do landowners best position themselves to time these variations and get the best possible stumpage price? Is it possible?

It is not easy, but possible. Landowners should become familiar with their local markets. Understanding general price patterns in their market, whom the major players in their market are and learning what major factors affect prices are important considerations. While supply and demand ultimately drives prices, factors such as weather, housing starts, mills closures and openings. all contribute to price fluctuations. Being aware of shifts in these major factors will help landowners recognize advantageous times to sell their timber.