This is the second in a series related to Forisk’s Q2 2016 forest industry analysis and timber price forecasts for the United States.

Forisk analysis indicates “investable” timberlands, or privately owned acres managed to maximize wood volume and cash flows, comprise ~11% of all U.S. forests. Our definition of “investable” prioritizes three attributes: (1) private ownership; (2) qualified timberlands (that meet the US Forest Service definition); and (3) access to a diverse set of wood-using mills. While the 87 million acres of “investable” timberlands account for less than 4% of the total U.S. land area, they represent over 24% of all private timberlands. This speaks to the concentration of ownership in the United States, with a relatively short list of organizations specializing in the ownership and management of productive, industrial timberlands. This differs from Canada, where only 7% of all forest area is privately owned, and only a fraction of this would qualify as investable timberlands for institutional and timber REIT investors.

North American forest assets have been the focus of Forisk’s timberland ownership and transaction research since 2010, with large Canadian forest owners added to this program in 2013. In the past twelve months, our team made 196 updates to Forisk’s North American Timberland Owner & Manager List, including 139 updates associated with acres owned and managed. Currently, the List includes over 300 private organizations in the United States and Canada that each own or manage 10,000 timberland acres or more. These include private individuals, corporations and institutions that own or manage over 100 million acres of private timberlands. Of the 104.5 million timberland acres captured here, 97.7 million (94%) acres are with 121 organizations that own or manage 100,000 acres or more each. The figure below breaks down the 100,000+ acre owners by type.

The table below lists the 2016 top 10 U.S. timberland owners by acres, and compares this to their 2015 rankings. Overall, the Weyerhaeuser/Plum Creek merger drove the changes, with Plum Creek dropping off and Yakama Forest Products joining the list at number 10. These 10 owners of U.S. timberland have 24.0 million acres; timber REITs account for 70% of this total. This does not include the approximately 3.0 million acres directly and indirectly controlled by the two largest non-profit conservation owners.

When looking separately at timberland managers, TIMOs, who manage timber assets on behalf of institutional investors and large private investors, hold seven of the top ten slots; these seven TIMOs manage 17.6 million acres, or 69% of the 25.6 million acres managed by the top 10 firms. Three forestry consulting and management firms, including the largest organization on this list (American Forest Management), account for the balance. Of these firms, F&W Forestry Services climbed the U.S. list after its recent acquisition of Fountains Forestry as part of a larger deal with UK-based OCS Group.

 

This timberland owner and manager research supports analysis of wood markets and timber prices, and will be published with the Q2 Forisk Research Quarterly (FRQ). To learn more about the FRQ, click here or contact Brooks Mendell at bmendell@forisk.com, 770.725.8447.