1 / 21

Investing in trees Glen Worrell FW Forestry Services, Inc.

Why invest in timberland?. Biological GrowthProduct Class MovementPulpwood to SawtimberPrice AppreciationRecreational Opportunities?I just want to own trees". Income opportunities from timberland. Timber SalesHunting LeasesRecreational LeasesPine Straw. Costs associated with timberland. Prop

desiderio
Download Presentation

Investing in trees Glen Worrell FW Forestry Services, Inc.

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

    1. investing in trees Glen Worrell F&W Forestry Services, Inc.

    2. Why invest in timberland? Biological Growth Product Class Movement Pulpwood to Sawtimber Price Appreciation Recreational Opportunities “I just want to own trees”

    3. Income opportunities from timberland Timber Sales Hunting Leases Recreational Leases Pine Straw

    4. Costs associated with timberland Property Taxes Land Use Insurance Management Fees Lawyer Fees Accountant Silviculture Activities

    5. Silviculture activity costs Reforestation Site Prep Seedlings Planting Herbaceous Release Release Fertilization Timber Sale Costs

    6. Use of financial decision tools Purchase Properties Look at Management Alternatives Vary Management Scenarios Timing of Activities Scope of Activities

    7. What’s needed? Assumptions!! Costs of Activities Timber Prices Timber Mart South, F2M, RISI Discount Rate Growth Response to Treatments Growth and Yield Models Holding Period

    9. Purchase Cutover land and reforest Assumptions Bare Land – ($800) Reforestation – ($80) Release age 1 – ($45) Thin age 15 – $300 Harvest age 25 – $2,500 Sell Land after harvest – $1,000 Results NPV @ 5% = $248 NPV @ 6% = $11 NPV @ 7% = ($176) IRR = 6.05%

    11. Convert cropland to timberland

    12. 15 Year Old Stand – Clearcut now vs. thin Two Thin Management Regime

    13. 15 Year Old Stand – Clearcut now vs. thin Clearcut 15 year old stand, replant, cut at age 14

    14. Quality Hardwood Stand – Orange Co. VA

    15. Quality Hardwood Stand Without Land Sale

    16. Timing is Everything – Final Harvest

    17. Timing is everything – analysis of fertilization in 2004 projected through 2011

    18. Timing is Everything – Fertilization Analysis 2004 prices Pine pulpwood - $10/ton Pine CNS - $27/ton Pine Sawtimber - $42/ton 2011 Prices Pine Pulpwood - $8/ton Pine CNS - $14/ton Pine Sawtimber - $20/ton All other costs unchanged

    19. Timing is everything – analysis of fertilization in 2004 projected and using 2011 timber prices

    20. Summary Assumptions – How Good Do You Feel? Timber Prices Costs Management Regime

    21. Questions?? E. Glen Worrell, Jr., CF, ACF Charlottesville Branch Manager F&W Forestry Services, Inc. 404 8th Street NE, Suite C Charlottesville, VA 22902 O: 434 296 1464 F: 434 296 5700 C: 229 343 8049 gworrell@fwforestry.com www.fwforestry.com

More Related