National Association of Conservation Districts

Forestry Notes

November 2008
Volume XVII, Issue 12

| PDF version | Archive of Previous Issues |

1. A Wise Global Investment
2. Major Forestry Partnership Agreement Signed
3. Great Plains Hosts Riparian Forestry Summit
4. Hawaiian Company Makes Most of Its Forest Practices
5. Wildfire Publications Address Needs of Communities at Risk
6. Forestry Briefs
7. Special Insert (PDF): Time to talk: Who will own the family woodlands?

1. A Wise Global Investment
Favorable factors prompt foreign investment groups to target U.S. timberland

The selling off of U.S. timberland is nothing new, argues Marshall Thomas; for decades outsiders have recognized the value of our agriculture and forest lands. But recently the interest has grown due to a number of factors. Georgia, where Thomas serves as the president of the timber consulting firm F&W Forestry Services, is a good model for what other states are seeing.

According to a report in the Atlanta Business Chronicle, Georgia’s foreign controlled agricultural land has jumped by more than 30 percent over the past two years – from 615,000 acres to 810,000. That growth was consistent nationwide, and in six U.S. states more than 1 million acres are foreign owned, the most of which is in Maine (3.3 million acres).

Thomas argues it’s not a trend that will necessarily continue, but rather an ownership cycle that is influenced by land values and exchange rates.

This foreign interest in U.S. land has happened before.  Back in the late 1970s and early 1980s, he points out, foreigners began to buy up agricultural land (timberland included) that was under-valued. That lasted until the early 1980’s when land declined in value and exchange rates changed. Now, thanks to a favorable currency exchange rate, interest has boomed again.

Said Thomas, “Foreign investors are seeing the dollar drop, and what would have cost two Euros five years ago might cost one Euro today. I see it as the same as what happened (30 years ago).”

Another reason for the increased interest: before the land became affordable, it became available, argues Bob Izlar, the director for the University of Georgia’s Center for Forest Business. The struggles of the pulp and paper industry, particularly in southern states, resulted in the selling off of timberland. Now, according to Izlar, there is not a single vertically-owned Georgia company that has ownership of timberland.

“There’s just not a whole lot of land that’s going to come on the market elsewhere,” says Izlar. “The land that is available for purchase is less limited here than it is in Europe, or Brazil, or Uruguay, for example.”

When that land became available, American pension funds began to gobble chunks of it up, but European pension and hedge funds soon followed. Now it’s become a safe and smart investment in perhaps an unstable global economy.

“These guys are looking to invest and have been for some time, particularly the Germans and the Saudis,” says Izlar. “With the dollar dropping against foreign currency it became a great hedge.”

Izlar also says global environmental regulation has a role in the interest in U.S. timberland. “Green requirements under the Kyoto Treaty have caused an increased in the pellets shipped overseas.” That demand will only grow over time, says Izlar, and should help to continue the level of interest being shown from other countries. In fact, Izlar helps to stimulate the interest. He helped to coordinate a ‘Forest Investing 101’ discussion at an investment conference in Munich earlier this year, and is assisting with another conference to be held in London in November. Izlar adds that foreign representatives often sit in on U.S. conferences, as well.

What does the future hold? No one can be certain, especially not in the current economic climate.

“I can’t predict what’s going to happen from here,” says Izlar, who added “but, as an investment, I do think timber is a whole lot safer than some of the other (options). From that standpoint we might see continued foreign interest in it as an investment.”

2. Major Forestry Partnership Agreement Signed
NACD joined with the National Association of State Foresters, the USDA’s Forest Service and Natural Resources Conservation Service in signing a joint Memorandum of Understanding (MOU) on September 29 at the state foresters’ annual meeting in Hyannis, Mass. 

This MOU is intended to strengthen cooperation among these organizations that will improve forestry-related conservation assistance to private landowners that sustains the health, diversity, and productivity of America’s private working lands.  

The parties had previously identified five barriers to the delivery of forestry-related conservation assistance: 1) The availability of technical expertise and assistance to private non-industrial forest landowners is insufficient to meet the need; 2) The lack of integration between the parties made it difficult for private landowners to participate in forestry and conservation programs; 3) Funding devoted to forestry and agroforestry is inadequate and inconsistent; 4) The parties speak different technical/organizational languages, which suggest a need for improved communication; and 5) Forestry has not become a priority for many state technical committees.

The MOU calls for NACD to encourage conservation districts to: cooperate and coordinate with state forestry agencies in delivering forestry assistance; invite USFS, NRCS, and state forestry agencies to participate in their state,  regional and national meetings and conservation initiatives; cooperate with parties to identify the needs for forestry and agroforestry assistance on private lands; provide the locally-led component in landscape or watershed scale planning and implementation; provide opportunities for the parties to interact with NACD leadership, Natural Resources Foundation Committee, and the Forest Resources Policy Group;  provide the parties with contacts for landowners/managers whose participation in conservation planning has identified the need for technical or financial assistance; foster and guide the development and implementation of MOU documents between USFS and/or state forestry agencies with state soil and water conservation agencies and individual conservation districts; and encourage conservation district employees to increase their knowledge of USFS and state forestry agency programs through training and education.

3. Great Plains Hosts Riparian Forestry Summit
More than 120 attendees gained a better understanding of the history, ecology, invasive species, economic and cultural impacts, and available management techniques for restoring forested riparian areas at the Great Plains Riparian Forest Management Summit. The September event—the first of its kind in the northern Great Plains—welcomed professionals from 10 Great Plains states.

University of Arkansas history professor Elliot West provided a stimulating presentation concerning the importance of riparian forests to humans including the resulting impacts, both positive and negative. “During the growth of the ‘horse culture’ the Great Plains experienced decline of riparian forests,” said West, who went on to argue that westward migration of settlers and homesteading accelerated decline of riparian forests.

Several presenters discussed properly assessing riparian area health, including the impacts of invasive plant, insect and animal species.

During the conference's second day a number of discussions focused on alternative methods and management systems for restoring riparian areas.

Lorne Fitch of the Alberta Riparian Habitat Management Society spoke about how the Cows and Fish Program is attempting to change the world one community at a time. The program focuses on increasing public awareness and understanding about riparian areas and their functions. A watershed approach is used to assess/inventory as well as to educate and build community based action.  Included in this approach is a monitoring system which answers “Where Are We? Where Are We Going? And Did We Get There?”

Richard Straight of the USDA Agroforestry Center asked breakout discussion groups to address three topics: Coalitions and funding; hydrology and restoration; and wildlife.  Each group reported back to the general session with suggestions for these items. The results will be included in the summit’s final report.

Other presentations spoke to methods for assessing stream corridors; grazing management in riparian buffers; harvesting trees and BMPs for riparian areas; developing biofuels; and carbon credits.

On the final day of the conference attendees toured the Earth Resources Observation Station (EROS) located northeast of Sioux Falls, S.D.

4. Hawaiian Company Makes Most of Its Forest Practices
Even on the Hawaiian island of Kauai, forestry pioneers can be found creating sustainable methods for wood-based markets.

In 1996, Bill Cowern started Hawaiian Mahogany, Inc. when he learned portions of the island’s agricultural land had become available due to a declining sugar market. Cowern, who was part of the local Farm Bureau at that time, had a sense of how to make the land viable.

“We realized that many of the lands were too wet to do some of the cropping others might consider because you couldn’t control the moisture,” he said. “Other than sugar, the only things that those lands could be used for were cattle and timber.”

Hawaiian Mahogany bought 50 acres to start, and through the help of some investors purchased another 200 acres. Within four years Hawaiian Mahogany had accumulated 4,000 acres of land ready to be developed.

Said Cowern, “First we had to find out how we could do this in a sustainable fashion. We started looking at using nitrogen-fixing trees to be the nursing trees for the other, more valuable trees in order to establish a vast growing, economically viable forestry operation that didn’t require outside input … that’s what we have done.”

What Hawaiian Mahogany found was an albizia species (parasarianthes falcataria) that has proven quite beneficial to the company’s structure. According to Cowern, the albizia provide all of the nutrients that the other trees require, and the company has also made use of its rich waste material.

“The trees have evolved in a very wasteful way,” said Cowern. “If you have an acre of these trees canopied, they’re going to drop approximately 30,000 pounds of leaf and twig material on the ground each year. Much of that is nitrogen – about four percent – so there is an enormous amount of fertilizer potential falling on the ground.”

Twice each year they remove roughly a ton of material per acre which is then packaged to be sold as either fertilizer or high-protein livestock feed. Best yet, said Cowern, the process has little to no impact on the growth of the tree.

For timber, the company relies on mahogany and a eucalyptus species from the Solomon Islands – one of the few eucalyptus species not native to Australia. “It’s much closer to mahogany than it is to a typical eucalyptus,” said Cowern, who raises a number of Australian-native eucalyptus, as well.

Presently, Hawaiian Mahogany is working approximately 1,800 of its acres. “It didn’t make sense to hire 1,000 people to plant a bunch of acreage and wait 15 years and hire them all again.” Now, though, the company is ready to accelerate that growth.

“We plan to add more nitrogen-fixing trees because of the opportunities we see with carbon sequestration,” said Cowern. The company hopes to plant another 2,000 to 3,000 acres in the next 18 months.

Seeing the potential for a new market, Hawaiian Mahogany has entered the final stages of an even more ambitious project. The company has partnered with Green Energy of Hawaii to help service approximately 10 percent of the island’s electricity needs.

“Eventually these Albizia trees get to be too big,” explained Cowern. “When they’re four years old and 12 to 15 inches in diameter we need to get rid of them, or they’ll begin to overshadow all of the rest of what we’re trying to grow.”

The woody material will supply all of Green Energy’s wood chip needs for its proposed 6.5 MW biomass-to-energy gasification plant; in October, financing for the plant was approved, and Cowern expects the partnership to begin to show results by the end of 2009.

For more information, contact Bill Cowern, president of Hawaiian Mahogany, Inc., at 808/332-8570, or email him at
treefarm@halekua.com.

5. Wildfire Publications Address Needs of Communities at Risk
A consortium of Western-based non-governmental organizations announced the release of publications to address the critical need for protection of communities at risk to wildfire.

These resources—produced by Resource Innovations (Eugene, Ore.), Sustainable Northwest (Portland, Ore.), the Forest Guild (Santa Fe, N.M.), and the Watershed Research and Training Center (Hayfork, Cali.)—will help communities reduce fire risk through planning and implementing collaborative forest restoration and fuels reduction projects on public and private lands in the wildland urban interface.

“Communities with sparse resources are often overshadowed by wildfire impacts to wealthier communities. We want to ensure that the under-served are better able to prepare for, respond to, and recover from wildfire events,” said Kathy Lynn, associate director of Resource Innovations.

With costs predicted to reach $1.6 billion this year, the federal government has run out of money to fight fires, and money is now being “transferred” from the very hazardous fuels reduction and community assistance programs aimed to reduce wildfire risk. While spending over a billion dollars to suppress fires, federal agencies are spending only $80 million this year helping communities with fire prevention tactics.

Said Michael DeBonis, Southwest Region Director of the Forest Guild, “It’s like that old saying—an ounce of prevention is worth a pound of cure.”

Here is a list of the available publications, with brief descriptions:

Engaging Socially Vulnerable Populations in Community Wildfire Protection Plans -This publication addresses the wildfire protection needs of low-income and under-served communities. It focuses on physical and social risks of wildfire in such communities—loss of jobs, resources and other economic opportunities.

Community Wildfire Protection Plan Evaluation Guide - This hands-on guide helps communities to be accountable for fire safety. It provides a step-by-step process to assist communities in monitoring, evaluating, and updating their fire plans.

Beyond Planning: Stewardship Contracting as a Management Tool for Implementing Community Wildfire Protection Plans – Stewardship contracts are often used to implement fuels reduction projects on public and private land. The paper presents information on the stewardship contracting authorities and case studies detailing how two community fire planning efforts resulted in successful stewardship efforts.

Stewardship Contracting and Collaboration: Best Practices Guidebook (December 2007) - This guide provides information to Forest Service and non-agency participants in stewardship contracting collaborative groups. It includes opportunities for collaboration throughout the stewardship contracting process, suggestions of best practices for each step, and links to a wealth of additional resources.

The publications are available on a U.S. Forest Service Partnership Resource Center page dedicated to CWPP resources, http://www.partnershipresourcecenter.org/cwpp.

6. Forestry Briefs
Joint Fire Science Program is Calling for Grant Proposals
The Joint Fire Science Program has 10 different task statements focused on wildland fire research with approximately $6-8 million in available funding.  The JFSP is interested in the following—lifecycle fuels treatment, temporal and spatial scaling of fire and aquatic organisms, regional haze - ozone and secondary aerosol formation, smoke dispersion from low intensity fires, trade-off assessments of AMR decisions, fire, insect outbreak, and windstorm effects on fuel profiles and fire behavior, predictive fire severity maps, compatibility of fuel treatments and fire management with conservation of threatened and endangered wildlife species, prevention effectiveness, 2008 wildfires and wildland fire use fires – re-measurement opportunities.

The Joint Fire Science Program has one task statement focused on synthesis of existing knowledge with approximately $1 million in available funding.  The JFSP is interested in 3 specific areas—extreme fire behavior, fire history and climate change, and guides to fuel treatment practices.

Joint Fire Science Program has one task statement focused on a new fire ecology science initiative with approximately $1 million in available funding.

All proposals must be submitted by November 21, 2008 at 11:45 p.m. MST.

For details, visit the JFSP Web site at http://www.firescience.gov, or contact
Tim Swedberg at 208/387-5865 or timothy_swedberg@nifc.blm.gov.

 

$1 Million Grant for N.H. Biomass Burner Project
Efforts to install a wood-fired biomass burner at the Fraser Papers mill are getting a boost from a group that invests in economic development projects.

The New Hampshire Community Development Finance Authority administers state tax credits and federal grants to support affordable housing and economic development projects. It recently approved a $1 million grant application for the boiler project, but the governor and Executive Council have the final say on the grant awards.

Fraser Papers laid off 80 employees in April after high energy costs have forced it to close one paper machine. It is exploring replacing oil-fired boilers with two biomass boilers as a way to sustain the mill and convert to steam heat rather than remain dependent on oil.

The Gorham planning board has already given the mill site plan review, but more money is needed. The total cost of the boiler project is about $16 million. The company is trying to get some funding through a loan from the New Hampshire Business Finance Authority in hopes of having the boiler up and running in January.

In Maine, Fraser Papers uses a wood-fired biomass boiler at the Katahdin Paper Co. mill it operates in East Millinocket. That mill is staying open, while another company operates in Millinocket using oil for energy is closing.