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In 1849, Martin Faustmann read an article about forest valuation and found it wanting. A German forester and appraiser, he developed and published an alternative technique for valuing bare forestland, or “dirt,” for tax purposes. Faustmann’s approach, a special application more…
The start of the holiday season signals the close of the strategic planning and budgeting cycle for many firms. In the forest products industry, over the next 24 months, prioritized investment projects will move from the white board to the more…
This post includes an excerpt from an editorial by Brooks Mendell published in the open access journal BioResources. Wood bioenergy investments—which include projects generating electricity, biofuels, and pellets from woody raw materials—necessitate decisions from a range of stakeholders. And yet, more…
This post includes excerpts from the September 19th “Accounting for Inflation in Timber Forecasts” presentation at the 2013 “Who Will Own the Forest?” (WWOTF) conference in Portland, Oregon. In 1913, one dollar bought 18 loaves of bread or three gallons more…
This is the sixth in a series related to Forisk’s 2013 forecast of softwood stumpage prices in the United States. When housing crashed in the United States, forest owners and timberland investors deferred harvesting sawtimber, the logs needed to manufacture more…
Money does grow on trees. Unfortunately, it grows in small denominations. So we care deeply about managing costs and minimizing taxes. Which brings us to a category of questions I get each tax season: timber depletion. What is it? Depletion, more…
This post summarizes research from the January 2013 edition of Wood Bioenergy US (WBUS). Viable wood bioenergy projects can secure competitive financing. In U.S. capital markets, primary sources of financing for these projects include private equity, project finance, grants, loans and more…
Want a simple method for valuing stocks and income earning real estate or timberland? Consider the Dividend Discount Model by dividing next year’s income, assuming it will be earned annually in perpetuity, by a constant discount rate or cost of more…
When talking about timberland investing while having a beer or standing over the hood of a truck, not when signing checks or allocating capital….. A reasonable estimate of a forest’s current economic value equals the standing merchantable volume multiplied by the more…
News flash: we all make errors when analyzing forestry investments. Which are the most common and how can we avoid them? At the end of the day, most analytic errors in forestry relate to the data used – the inputs more…