DEBATE OF '98- financial resources

JimiFromMI jimifrommi at aol.com
Wed Apr 22 22:19:18 EST 1998


In article <1998042301594200.VAA06086 at ladder01.news.aol.com>, kmorrisd at aol.com
(KMorrisD) writes:

>Subject:	Re: DEBATE OF '98- financial resources
>From:	kmorrisd at aol.com (KMorrisD)
>Date:	23 Apr 1998 01:59:42 GMT
>
>Joe and Group,
>
>I've done some work in southern Berkshire County, so I know what you're
>talking
>about when you say that woodland for these landowners is just another asset
>in
>their portfolios.  You have a lot of very wealthy, second home New York City
>people.  But if they have money, they probably understand stock investment
>analysis.  Therefore they should be able to understand forest investment
>analysis.  The problem is no one is telling them that timber is a worthwhile
>investment.  You just have to go out there and do a little missionary work,
>Joe. <G> 
>
>I saw the article in the latest Journal of Forestry by Dave Kitttredge and
>others about ecosystem management and landowner objectives in Franklin
>County,
>MA.  According to the survey, everyone cares about recreation and aesthetics,
>and not about investment.  But I wonder how they would have responded if they
>knew they could be--or are already--earning 10-15%.  It's a certainty that
>the
>interviewers didn't tell them that, and another certainty that they didn't
>hear
>it from their service forester--and probably not their consulting forester
>(if
>they have one).
>
>So a good investment isn't a choice that landowners even know they have--at
>least not in Massachusetts.  I'd be curious to hear from some of the
>consultants and landowners in other states what their service and extension
>foresters are telling landowners about rates of return.  I'd also be curious
>to
>know what you consultants are telling your clients in other states.  And what
>are they and you saying about the difference between managed and unmanaged? 
>How much of a difference does it make in rate of return?
>
>Karl Davies
>
>------------------- Headers --------------------

I have personally benefited from rogue forestry management on small properties
(wildlife and aestetic purposes outranked timber for my goals) that I have sold
without cutting a tree (for profit) or promoting the value of the timber in the
"real estate" sale.  I had a very limited potential clientelle (those that saw
beauty in wildlife and the landscape as I did) but once I found those persons,
they paid a premium!

In much of Michigan, we are seeing the end of the family farm (and the
beginning of some new, smaller ones!).  These century plus properties are
finding their way out of the family due in great part to a lack of interest in
living the farming life.  In some cases, the land indeed converts over to
someone's portfolio with active planting to convert the open land into
Christmas Tree farms, etc.  However, in other cases, young retirees are
entering the landownership arena and purchasing 40 or so acres in which to
reside and enjoy.  This seems to be where most of reforestation is taking
place; where new visions of a treed landscape to pass on to their grandchildren
fills the mind (hopefully the grandkids will appreciate it when the time
comes!)

The 69 acres that I will purchasing (mostly an old farm) as (hopefully) my
FINAL residence seems to have pretty much been left alone both agriculturally
and silviculturally for the last 15 years or so.  The previous owners did sell
a good portion of their hardwoods last year, but the harvest appears not to be
the negligent high grade that I'm familiar with in Southern Michigan.  The
trees that were left standing for the most part, though young have tall
straight trunks.  It seems that they actually cut out some of the bad with the
good (they even lopped all of tops to under 4 feet!).  They didn't touch the 2
Norway Pine plantations, the oldest being probably 20 years old, or so.  They
probably need to be thinned (keep in mind that I AM NOT a "forester" and
therefore totally ignorant in the eyes of many, here).  I can't wait to get my
county forester out there to discuss MY land goals.  I figure that I'll survey
the property to the best of my ability, draw up some prelims, goals, etc. and
then give the county guy a call.  Hopefully he can at least establish a basis
for me if not anything else.

Incidentally,  the house and acreage are worth the price paid even without the
timber (or hay) value factored in.  I am (as ALL farmers are) interested in
realizing some income from my land.  However, I place a large value on "seeing
the deer and turkeys" and enjoying some venison as well!  Perhaps maintaining
40 or so acres for agricultural purposes (I'll lease it until I learn more
about farming) my grandkids (none yet) are going to have one beautiful place to
behold by the time it gets in their hands.  I do feel confident that I have
enough time to educate them about the "hidden" values of the land and the fact
that the land so treed can be sold at significantly higher prices than if a
clear cut harvest took place.  Ideally, I'll have numbers available showing the
return of the land as a long term investment where they won't be tempted to get
rid of it or make drastic timber decisions for the quick buck.

It probably won't be until July before I interview my county forester but stay
tuned.  As there are several markets (from lumber to energy) in the locale,
I'll be very interested in how he/she educates me on the value of my stands as
they are and as they would be under what-if management scenarios.  If I'm not
happy, maybe I'll fly Joe in to get a second opinion (just kidding, I know he
is just too loyal to the Queen of New England and I probably couldn't afford
him).

Regards.



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