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CAPITAL IDEAS -- LIVE!

SEPTEMBER 2012 News Conference for Forest Owners
Sponsored by the Alabama Forest Owners' Association, Inc.
This Conference was recorded on September 19, 2012

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Hayes D. Brown   Alabama Forest Owners' Association

Hayes D. Brown

starting time: (00:00)
Comment

Moderator

Hayes D. Brown, attorney and forest owner, will moderate this news conference. Hayes' email address is hbrown@hayesbrown.com.

Click Here to View & Hear Prior News Conferences.

 

Dr. Ian A. Munn

(00:29)
Hear Conference

Comment

Focus on Sawtimber, Not Pulpwood or Biomass

Ian Munn is Interim Associate Dean & Professor, Forest Economics and Management at the College of Forest Resources/Forestry Department, Mississippi State University. In Optimal management of loblolly pine considering biofuel markets and low sawtimber prices, Tree Talk, Summer 2012, Ian and James Henderson reported on a research project that asked the question: At what point would sawtimber prices be low enough and pulpwood/biofuel prices be high enough for landowners to change the way they manage their planted pines?

"Our results indicate that sawtimber regimes are financially better than pulpwood regimes even at today’s depressed sawtimber prices where relative pulpwood prices exceed 30 percent of sawtimber prices. Indeed, relative pulpwood prices would have to increase substantially to 44 percent to 84 percent of sawtimber prices, depending on planting density, site index [soil productivity] and minimum alternative rate of return, before pulpwood regimes would become financially preferable to sawtimber regimes."

The article ends with a statement that Carl Wiedemann will probably agree with: "The important thing to do is get the trees in the ground and get them growing!"

Phone: (662) 325-4546
Email: imunn@cfr.msstate.edu

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Scott Drenkard

(05:32)
Hear Conference

Comment

Estate Tax - Worse Than Republicans Say

Scott Drenkard is an Economist with the Tax Foundation, a nonpartisan tax research group based in Washington, D. C. With the current estate tax exemption scheduled to crash on January 1, 2013, to $1 million from the current $5.12 million, and the current top marginal estate tax rate of 35 percent scheduled to increase to 55 percent at the same time, many forest owners will find themselves facing an estate tax bracket they had never imagined. Drenkard and co-author David Block, in their paper, The Estate Tax: Even Worse Than Republicans Say, point out that the Estate Tax reduces savings, requires expensive compliance costs that are a drag on the economy, and is likely to be revenue neutral. In fact, "[T]here is a high likelihood that estate tax repeal will be revenue positive due to an increase in realized capital gains (which are taxed)." Of course, since their paper was written for a general audience, they don't mention the many acres of forest and woodland that are prematurely clearcut each year to pay the tax.

Suggested Reading:

Phone: (202) 464-5111
Email: drenkard@taxfoundation.org

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Dr. Stephen Ditchkoff

(09:32)
Hear Conference

Comment

There's more than one way to kill a pig.

Steve Ditchkoff is Professor of Wildlife Ecology and Management at Auburn University's School of Forestry and Wildlife Sciences. Steve and several scientists in the College of Veterinary Medicine at Auburn are working on a project to reduce the numbers of wild pigs in Alabama and the South. According to an article in the Press-Register/al.com, 8/10/10, "Wild hogs caused an estimated $44 million in damage to Alabama cropland in 2009. ... The problem at hand is that the researchers need to make a contraceptive that is species-specific and won't, for example, make deer sterile if they happened to eat it. 'No species-specific oral contraceptive has been developed,' Ditchkoff said. 'But we're working on it.' What they are in the initial testing stages on is an oral contraceptive that would work only for pigs and would do its job by prompting them to have an immune reaction in the reproductive system. The pigs would, more or less, sort of become allergic to making babies."

Suggested Reading:

Phone: (334) 844-9240
Email: ditchss@auburn.edu

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Andrew Kinnaird

(13:07)
Hear Conference

Comment

Trust Fund to Prop Up State Budget for Three Years - But Then What?

Andrew Kinnaird is a Policy Analyst at the Alabama Policy Institute, "a non-partisan, non-profit research and education organization dedicated to the preservation of free markets, limited government and strong families, which are indispensable to a prosperous society." Yesterday, September 18, Alabama voters overwhelmingly approved a constitutional amendment that will permanently alter the state's savings account, The Alabama Trust Fund (see slide 9 of a Chronological Analysis). Since the Alabama Policy Institute has studied Alabama government and published numerous Guide to Issues papers on a wide variety of topics, we asked Andrew to help us understand what will happen next. Will the money that will be moved from the Trust Fund to the General Fund be spent on medical care for poor people? Will it be spent to prevent the release of state prisoners?

Suggested Reading:

Phone: (205) 870-9900
Email: andrewk@alabamapolicy.org

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Lawrence C. Hancock, III

(16:30)
Hear Conference

Comment

Attempt to Increase Regulations in Georgia Thwarted

Chad Hancock is the Central Georgia Regional Manager for F&W Forestry Services, Inc. and the Chairman of the Georgia Division of the Southeast Society of American Foresters. As Georgia SAF Chair, Chad worked with other forestry groups (Association of Consulting Foresters, Georgia Forestry Association) in Georgia to prevent a new layer of state regulations that would significantly increase the cost of selling timber, especially small sales. Here's the problem, as described in The [Alabama] Registered Forester, Summer 2012. "[A] Consulting Forester in Georgia hired, and paid, an attorney to prepare a timber sales contract for a landowner client for which he was managing a timber sale. Then, the same Consulting Forester wanted to use the same contract form to handle a timber sale for another landowner, by revising the form to fit the new landowner (name change, legal description change, etc.). The same attorney filed a complaint with the Georgia Attorney General’s Office asking for an advisory opinion as to whether that certain activity constitutes the unlicensed practicing of law, claiming that the Consulting Forester was attempting to practice law without a license."

We owe a debt of gratitude to all individuals and organizations who fought this attempt to increase regulations on forest owners. Here is Chairman Hancock's report as it appeared in the Southeastern Forester, Summer 2012:

Georgia Division Society of American Foresters News
       by Chad Hancock, Georgia Division Chair
The Georgia Division of the Society of American Foresters was active in providing information and a response to the State Bar of Georgia’s Standing Committee on the Unlicensed Practice of Law hearing on June 1, 2012 in Savannah. The Division hired an attorney in conjunction with the Georgia Chapter of the ACF to represent both groups at the hearing. Numerous other forestry professionals also attended the hearing and presented information to the committee. After discussions with those in attendance, I was informed there were many questions from the committee on how a timber sale is actually conducted and the different types of sales used in selling timber. Those attending also stated they felt there was a 50/50 chance of a favorable outcome for foresters. I am glad to report that on August 13, 2012 the committee completed their review of the information provided and ruled that foresters are NOT practicing law by using form contracts in the sale of timber for their clients. The ruling document provided by the Georgia State Bar can be reviewed at: http://www.gabar.org/barrules/handbookdetail.cfm?what=rule&id=548. This is a significant ruling for the day-to-day business of the forestry community and we all need to be thankful the ruling was in our favor.

Background and Supporting Documents:

Phone: (229) 883-0505 ext 145
Email: chancock@fwforestry.com

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Bill Moffitt

(20:40)
Hear Conference

Comment

Boosted Wi-Fi Connects Cameras

Bill Moffitt reports that he is "a veteran of a number of technology companies, including Sun Microsystems, Cisco Networks, AutoFarm, and many smaller ones no one has ever heard of." He founded Ayrstone Productivity in 2007 with his partner, Robert Hill, and currently serves as the company president. They have developed a high powered Wi-Fi booster that will allow remote cameras up to a half mile away to be monitored, wirelessly, from a desktop computer or other devices, such as a smart phones or tablets. After we watched some of Bill's videos (see links, below), we started figuring out how to use the system around our home and out-buildings to monitor for theft and vandalism problems. Some forest owners might use them to count pinestraw trucks or loaded log trucks leaving their property. Bill reminds us that Wi-Fi does not penetrate timber stands very well, so make your plans accordingly.

Videos:

Phone: 1-888-837-0637
Email: bmoffitt@ayrstone.com

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Carl P. Wiedemann

(23:29)
Hear Conference

Comment

Four Forest Management Lessons

Carl Wiedemann, a woodlot owner in upstate New York, wrote an article, The Economic Potential Unlocked, The New York Forest Owner, July/August 2012, that we think you will find encouraging. Be sure to read the numbers in the table in the upper right-hand column of the first page. Beneath the table he writes: "Over the past thirty years we have had three timber and firewood sales. These sales generated $33,000 in income—more than covering the original cost of the land plus thirty years of property taxes. The commercial harvests also removed poorer quality trees and gave better trees more room to grow. The positive impact of forest management is reflected in the dramatic increase in the value of annual growth from 1980 to 2011." (Value Growth: 1980, $4.38/acre; 2011, $50.06/acre)

Four Lessons:

  • Lesson #1 – Harvesting trees will not destroy your woodlot
  • Lesson #2 – Harvest trees to grow timber
  • Lesson #3 – Keep timber to grow timber
  • Lesson #4 – Silviculture matters.

Suggested Reading:

Phone: (518) 895-1028
Email: wiedeman@nycap.rr.com

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Daniel E. Stuber, IV

(27:52)
Hear Conference

Comment

Construction Up...Sawtimber Prices Down?

Daniel Stuber spends everyday at Forest2Market reading stumpage and delivered wood price reports from all over the country, so it's not a surprise that he noticed that stumpage prices (the price landowners receive for their trees while they're still on the stump) have not risen as housing construction numbers have improved. If you still have your copy of AFOA's September 2012 issue of Capital Ideas, look at page 2 in the upper right hand corner in the Lumber and Sheathing Prices table. A year ago, Random Lengths reported that 2 by 4 lumber was selling for $230 per thousand board feet (8/17/11). This year (8/22/12) 2x4s are bringing $315 per thousand board feet, quite a nice improvement. So why aren't we seeing a big jump in stumpage prices? Daniel helps us understand the market and price differences in his article, More Construction = More Lumber = More Sawtimber = Lower Sawtimber Prices?, F2M Market Watch, 8/22/12.

Phone: (704) 540-1440
Email: daniel.stuber@forest2market.com

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