CAPITAL IDEAS -- LIVE!
News Conference for Forest Owners
Sponsored by the Alabama Forest Owners' Association, Inc.
This Conference was recorded on January 18, 2012
Hayes D. Brown
starting time: (00:00)
Hayes D. Brown, attorney and forest owner, will moderate this news
conference. Hayes' email address is
Click Here to View & Hear Any of nearly 100 Past News Conferences.
Rep. Martha Roby
Roby Seeks Cap on Federal Spending
Congressman Martha Roby represents
Alabama's 2nd Congressional District (Southeast Alabama) in the U.S.
House of Representatives. Representative Roby sits on the
Services Committee, the
House Committee on
Agriculture, and the
House Education and
the Workforce Committee. In an attempt to gain control of a growing
federal budget and make high quality land available for production, Roby has
introduced a bill that would put a cap on acreage in the Conservation
Reserve Program (CRP) and make
Class I and Class II (best soils) land ineligible for CRP. The title of the bill
(H.R. 3454) is
Preserving Marginal Lands and Protecting Farming Act of 2011.
Alabama Department of Agriculture and Industries Commissioner John McMillan
said, "Thanks to the leadership of Alabama’s two new members in the U.S.
House – Martha Roby and Terry Sewell – we have
common sense legislation that will help our farmers meet a rapidly growing
demand for food and fiber." Congressman Roby has formed an
Agriculture Advisory Panel to assist in her work on the 2012 Farm Bill.
More than half of the panel are forest owners and several are members of
Phone: (202) 225-2901
Laura E. Huggins
The Green Tea Party
is Editor of
(Property and Environmental Research Center) Reports for Free Market
Environmentalism. She has written numerous papers and op-eds
and even a book,
Greener Than Thou, which all champion the benefits of solving
environmental problems through property rights and markets. AFOA recently
received a 25 page pocket guide from PERC entitled,
The Green Tea Party: Serving Budget Cuts & Environmental Quality
by Terry Anderson. You will want to read the pocket guide (it's not long)
and also check out The Green Tea Party webpage at
Excerpts from the pocket guide:
- The Green Tea Party is filled with
"antis": anti-deficits, anti-regulations, and anti-bureaucracies,
which fight the cancer of an ever-growing government. The Green Tea
Party contains "pros" as well: pro-growth, pro-environmental quality,
and pro-property rights.
- "Vaclav Klaus, president of the Czech
Republic, offers what might be thought of as the GTP manifesto:
'As someone who lived under communism for most of my life, I feel
obliged to say that I see the biggest threat to freedom, democracy, the
market economy and prosperity now in ambitious environmentalism, not in
communism. This ideology wants to replace the free and spontaneous
evolution of mankind by a sort of central (now global) planning…. They
are Malthusian pessimists…. The environmentalists ask for immediate
political action because they do not believe in the long-term positive
impact of economic growth and ignore both the technological progress
that future generations will undoubtedly enjoy, and the proven fact that
the higher the wealth of society, the higher is the quality of the
Phone: (406) 587-9591
Dr. Richard W. Guldin
Recession's Impact on Forest Industry & Forest Owners
Richard Guldin is Director
of Policy & Quantitative Sciences,
USDA Forest Service Research & Development.
He "focuses on economics as it pertains to the creation and sustainability
of forests." In Forest
Sector Reeling during Economic Downturn, The Forestry Source,
Jan. 2012, Guldin and co-author W. Brad Smith report that 294,000 full time
forest industry jobs have been lost over the past 5 years, 113,000 in the
A Few Quotes From the Report:
- Current annual US lumber production
is 30 billion board feet, down 20 billion board feet (40%) since 2005 —
the lowest output since 1982, which was also a recession.
- Total annual US [timber] harvests are
down 4 billion cubic feet (30%) since 2005 — the lowest national harvest
level since the 1960s.
- If the current pattern persists,
another 25 to 30 million acres could go unharvested by 2020, having
serious implications on management plans and the future health of
production forests as trees continue to grow, health and vigor begins to
decline due to crowding, fuel levels build, and the potential risks
increase for infestations of insects and other pathogens.
- According to recent global
statistics, the US’s share of world wood-products production is
declining. Over the past 10 to 20 years, the US pulp-and-paper segment
has positioned itself to compete in global markets and has thus been
more resilient in the face of the recent economic downturn since 2005.
In the solid wood sector, however, the situation is more serious. Unless
the US housing market soon rebounds and thus increases domestic demand
for solid wood products — or unless the nation’s solid-wood industry
re-positions and re-structures itself to be more competitive in global
markets — employment, wages, and the value of shipments are unlikely to
recover to 2005 levels.
Phone: (703) 605-4177
Dr. Robert A. Tufts
Tax Laws Affect Forest Management
Robert Tufts is an Attorney
and Associate Professor in the
School of Forestry and Wildlife Sciences at Auburn University.
A few weeks ago in preparation to help Robert publicize five tax workshops
he will be presenting in February and March, we asked him why he believed
landowners should become knowledgeable about income and estate tax laws.
"Can't our tax guru's figure that stuff out for us? Why should we waste our
time in a workshop when we could be out working in our woods?" Robert was
quick to point out that a small amount of time spent learning how to nudge
gains out of the tax laws would pay back big returns. We grudgingly agreed
that we have met forest owners who didn't know how to write-off tree
planting expenses, who didn't realize their forestland and trees will gain a
new tax basis upon their death, who didn't know that income from timber sold
in a salvage sale could be reinvested without
being subject to taxes (after a tornado, for example)...
To whet your appetite for the tax
workshops, Robert created a
Outline that you will find useful. He also thought you should see a
copy of IRS Form T (timber)
to help you understand his comments today.
Timber Tax and Return
Preparation Workshops - Instructor, Dr. Robert Tufts
Auburn, February 16
Livingston, February 21
Huntsville, February 23
Tuscaloosa, March 1
Fairhope, March 15
Registration is only $15 and may be paid at
the door, but it is important to call Robert or send him an email to
let him know you are planning to attend.
Phone: (334) 844-1011
Dr. Robert E. Bardon
Open Door to Educational Resources
Bob Bardon is
of Extension and Engagement, Departmental Extension Leader and
Professor, Department of Forestry and Environmental Resources, College of
Natural Resources, North Carolina State University. At least once a
month, AFOA receives an email from Bob inviting forest owners and others to
participate in a webinar sponsored by the North Carolina Cooperative
Extension, Texas Agrilife Extension and Southern Region Extension Forestry.
We post many of them to our
Calendar of Events on the web and in our newsletter. The topics vary
(see sample list below), and while we don't often participate in the live
webinar sessions, the archive of past programs is quite inviting. You may
"attend" those at your convenience.
Webinar Portal for Forestry and Natural Resources - Previous Webinars
Phone: (919) 515-5575
Dr. Theresa M. Crimmins
What is Phenology?
Theresa Crimmins is
Partnerships & Outreach Coordinator for the
USA National Phenology Network.
When the Florida Extension Service announced an event for forest owners and
others entitled How to Monitor Plant
and Animal Phenology, our first question was,
Phenology?" A Google search pointed us to the National Phenology
Network where we learned that many of us are already amateur "phenologists." Have you
been keeping track of the dates each year when blackberries are ready to
pick, when the swifts return to your chimney, when the pecans bloom, when
loblolly pine pollen covers your car, or similar things? Theresa and the folks at
USA NPN have developed something called
Notebook to help them gather information from phenologists who are scattered
all over the US. Be sure to look at the
to Observe" webpage.
Phone: (520) 792-0481
Ralph G. Hellmich
"Perils in Gas Well Leases"
Ralph Hellmich is
Operations Supervisor South
Alabama for the
Alabama Oil & Gas Board.
We decided to get Ralph's advice after an AFOA member sent us a clipping
from The New York Times, 12/1/11, headlined,
Drilling Down -- Learning Too Late of the Perils in Gas Well Leases.
In a review of thousands of leases (none from Alabama), The Times
- Fewer than half the leases require
companies to compensate landowners for water contamination after
drilling begins. And only about half the documents have language that
lawyers suggest should be included to require payment for damages to
livestock or crops.
- Most leases grant gas companies broad
rights to decide where they can cut down trees, store chemicals, build
roads and drill. Companies are also permitted to operate generators and
spotlights through the night near homes during drilling.
- Most leases are for three or five years,
but at least two-thirds of those reviewed by The Times allow extensions
without additional approval from landowners. If landowners have second
thoughts about drilling on their land or want to negotiate for more
money, they may be out of luck.
“If you’ve never seen a good lease, or any
lease, how are you supposed to know what terms to try to get in yours?”, was
the question posed by Pennsylvania landowner Ron Stamets in The Times
Today, we will ask Ralph to describe some
of the pitfalls in leasing gas and oil and how landowners can avoid the
problems and still benefit from the natural resources found on their land.
AFOA members will tour the Alabama Oil &
Gas Board and Alabama Geological Survey in Tuscaloosa on Friday
afternoon, April 20. Landowners will be able to inspect drilling records
on or near their land. Be sure to register for
AFOA's 31st Annual Meeting when you receive your February issue of the
association newsletter, Capital Ideas.
Phone: (251) 438-4848
Amanda Hamsley Lang
Will Biomass Demand Alter Goals?
Amanda Lang is
Managing Editor of
Wood Bioenergy US and
leads bioenergy research for
Forisk Consulting LLC (check out the
Forisk Store of services). Amanda is an expert on supply and demand
of bioenergy. So, it wasn't a surprise to learn that the
National Alliance of
Forest Owners commissioned Forisk to study the potential wood market
impacts that might be caused by a growing demand for bioenergy. Would the
demand for bioenergy raw materials be so great that forests might be
destroyed or made incapable of providing environmental and other public
benefits? Might bioenergy stumpage prices push up general stumpage prices
and even cause landowners to alter their forest management in ways that
might harm future pulpwood or sawtimber supplies? The report,
Woody Biomass as a Forest Product: Wood Supply and Market Implications,
covers a lot of ground, but you may be interested in the following quote
from the Executive Summary.
Forisk Consulting also conducted an
analysis to determine how much woody biomass markets in the South must
evolve to affect landowner decisions with respect to harvest rotations.
Forecasted pine pulpwood prices in the South in 2016 would have to
increase from $11.47 per ton to higher than chip-n-saw prices of $17.09
per ton for landowners to be economically indifferent between a
pulpwood-dominated forest and a sawtimber-dominated forest. Across
the South, bioenergy demand would have to increase 435% by 2016,
from an expected 22 million green tons a year to 120 million green tons
per year, for pine pulpwood prices to reach $17.09/ton. This level of
bioenergy demand in the region by 2016 is extremely unlikely. In
comparison, the forest industry in the South consumed 103.3 million
green tons of pulpwood in 2010. Biomass energy wood use will have to be
high enough for a sustained period to maintain high pine pulpwood prices
to cause a shift in landowner behavior. At the same time, competing
higher-valued product prices would have to remain at prices low enough
to incent switching from pulpwood to sawtimber rotations. Once
established, these prices would have to remain economically feasible for
over 23 years to incent multiple pulpwood rotations on the same
property. Overall, the analysis suggests that a significant shift
from sawtimber to pulpwood rotations in the South is highly improbable.
Phone: (478) 396-0704
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