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NCREIF recently reported Q4 2013 total returns for private US timberlands of 5.92%. This total return number accounts for nearly two-thirds of the total 9.69% return for all of 2013. Big moves during the fourth quarter for the NCREIF Timberland more…
Q: What is the appropriate timing of cash flows in a forest valuation model? A: In normal forest operations, we likely won’t know in advance if forest stands will be harvested at the beginning, more…
The IRS Tax code requires real estate investment trusts (REITs) in the United States to pay out at least 90% of their taxable income to shareholders as dividends. In exchange, the IRS does not levy corporate taxes on this REIT more…
The phone rings. Our forest manager wants to increase the budget for fertilization in 2014. How do we account for the original investment – the original capital used to acquire the timberland – when evaluating new projects for the same more…
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…