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IN THE NEWS
Timber Company Sells 51,000 Acres
American Forest Holdings LLC recently sold 51,000 acres of timberland to the state of Washington for $97 million. “This deal preserves a significant river and forest ecosystem from the threat of future development and is a critical component of the State’s Yakima River Basin plan to enhance the supply of water to Eastern Washington,” says Les Jacobowitz, a finance partner at Arent Fox LLP.
The agreement is the result of three years of negotiations. More importantly, the 51,000 acres are now the first community forest, “which gives area communities a say in forest recreation, water quality and natural resource management, wildlife conservation, and timber harvesting.”
Oregon’s Changing Wood Products Sector
Andy Giegerich, Sustainable Business Oregon editor-Portland Business Journal, talks about emerging industries in the forestry sector and hope for rural areas.
“Biomass facilities have popped up in Central and Eastern Oregon. GreenWood Resources in the state’s north central patch is specializing in growing poplars in a fast, yet environmentally responsible, fashion, while state and industry interests have teamed up to knock down juniper trees that have spread like weeds throughout the state’s southeastern corner and turn them into hardwoods for furniture and various other accouterments.”
He adds, “Each of these emerging industries, which exist in what we’re calling the New Forest Economy, have one key factor in common: The newish sectors provide ongoing jobs, as opposed to the cyclical wood products sectors of yore that thrived and suffered along with housing starts, in rural areas.” www.Bizjournals.com
2013 Economic Forecast
David Chertudi, a DNR Lead Economist, provided this 2013 economic forecast.
U.S. Economy and Housing Market. The U.S. economy is improving in fits and starts. The unemployment rate peaked at 10.0 percent in October 2009 and has since dropped to 7.3 percent as of September, barely lower than a year ago. The unemployment rate for recent undergraduates is pushing 13 percent. GDP growth remains modest at below two percent over the last four quarters ending in June, and the recent government shutdown will lower GDP in this and future quarters.
The housing market continues to show positive signs: new housing starts in the first eight months of 2013 averaged 907,000 (seasonally adjusted annual rate) and average U.S. housing prices have increased in each of the last 19 months through August.
The U.S. economy still faces significant challenges. There are still too many unemployed workers, though some have reentered the workforce after having left; the financial and economic crises in Europe are improving, but several European countries remain in recession; China’s economy has slowed; and instead of implementing a coherent, growth-driven economic policy, the U.S. government is engaging in perilous brinkmanship.
Lumber and Log Prices. Lumber and log prices are up in 2013. The Random Lengths’ Coast Dry Random and Stud composite lumber price hit $414/mbf in April 2013, an impressive 44 percent year-over-year increase, before falling off steeply to $322/mbf in June. Predicted by forest economists, this drop was due to the uneven response of bringing lumber production back online and is interpreted as a temporary setback and not the beginning of a long-term downward price trend.
August prices averaged $351/mbf, and there will be considerable price volatility moving forward. Pacific Northwest log prices have also moved up sharply after being fairly flat for 2011 and most all of 2012. The price for a ‘typical’ DNR log delivered to the mill climbed dramatically to a nominal high of $587/mbf in April, the highest price since 2000. The log price then fell a bit before climbing back to $568/mbf in October.
While there are downside risks to the demand-side influences of timber sales prices—and therefore to subsequent removal prices—there is also upside potential if the nascent recovery in the U.S. housing market strengthens sooner than anticipated. Supply-side influences of stumpage price—such as timber mix and quality—are difficult to estimate in future years, but are assumed to be about average.
Satellite Images Give World View of Forestry
Google Earth Engine used 650,000 Landsat 7 images to create a high-resolution world deforestation map. Now, for the first time, people can see what is taking place in forests worldwide.
“Intensive forestry practiced within subtropical forests resulted in the highest rates of forest change globally,” according to the study, published online Nov. 14 in the journal Science. “Boreal forest loss due largely to fire and forestry was second to that in the tropics.”
While there has been deforestation in some places, there have been new forests generated in others. To see for yourself, go to http://earthenginepartners.appspot.com/science-2013-global-forest
Weyerhaeuser Hiring in Longview
Weyerhaeuser announced they are hiring new employees in all sectors at their Longview operation. The company says they need a larger workforce to handle the rising domestic and export demand and to replace retiring employees.
Weyerhaeuser says by the end of 2013, it will hire about 150 new workers. In 2014 the company expects to hire around 30 new pulp mill workers and another half dozen on the docks.
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