“forest income diversification for plantation owners” david dickens, ph.d., warnell school of...
TRANSCRIPT
Alternative Income Sources for
GA Forest Landowners
• David Dickens, Ph.D.
• Forest Productivity
Professor
• Warnell School of
Forestry & Natural
Resources
• The University of
Georgia
Alternative Income Options for
Forest Landowners in GA
• Pine straw – used as a mulch for landscaping on golf
courses, around homes and apartments, stores, etc. – in
many cases an annual income
• Hunt lease – renting land for hunting (deer, turkey, quail,
ducks, rabbits, etc) – in many cases an annual income
• Other sources as well (these come and go) – mushrooms,
bees/honey, naval stores, Carbon credits
GA Commodities values
2008-2012 (millions $)
Year Broilers Cotton Peanuts Eggs Timber Beef Horses
2008 4890 584 582 593 472 367 413
2009 4420 713 401 572 402 356 398
2010 4590 1170 470 580 480 407 362
2011 4670 1510 586 568 470 409 322
2012 4700 1300 891 793 523 538 507
3 major GA products exported out of the Savannah Port = wood, chicken, and clay products
GA timber values 1999 - 2012
Source:
Boatright and
McKissick 2000-
2013Timber revenue down 23% from 2000 through 2012
Economic Impact of Pine Straw in GA
2000-2012
$ paid to Forest Landowners
Source: UGA-CAES “GA Farm Gate Value
Report” Boatright and McKissick 2000-2013 A value increase of 380%
from 2000 through 2012
2012 Top Ten Counties by Value - TimberCounty Farm gate Value
Jenkins $18,447,195
Clinch $16,544,533
Telfair $15,000,000
Wayne $14,732,165
Charlton $14,278,372
Screven $13,322,713
Ware $10,566,229
Laurens $10,355,673
Emanuel $9,918,763
Brantley $8,986,971
2012 Top Ten Counties by Value - Pine Straw County Acres $/Acre Farm gate
Talbot 53,000 $90.00 $4,770,000
Jeff Davis 50,000 $90.00 $4,500,000
Wayne 45,000 $100.00 $4,500,000
Dodge 45,000 $90.00 $4,050,000
Wheeler 28,500 $90.00 $2,565,000
Bulloch 23,500 $90.00 $2,115,000
Ben Hill 23,000 $90.00 $2,070,000
Emanuel 21,000 $90.00 $1,890,000
Appling 20,000 $90.00 $1,800,000
Colquitt 15,200 $90.00 $1,368,000
2011 Top Ten Counties by Value Timber
County Farm gate Value Pickens $24,066,400
Clinch $18,618,286
Laurens $15,012,947
Charlton $10,938,617
Wayne $10,826,163
Emanuel $10,070,572
Long $9,849,610
Screven $9,605,025
Ware $8,196,840
Telfair $8,000,000
2011 Top Ten Counties by Value Pine Straw
• County Acres $/Acre Farm gate
• Wayne 45,000 $125.00 $5,625,000
• Laurens 55,000 $80.00 $4,400,000
• Talbot 53,000 $80.00 $4,240,000
• Jeff Davis 50,000 $80.00 $4,000,000
• Wheeler 28,500 $116.00 $3,306,000
• Dodge 40,000 $80.00 $3,200,000
• Calhoun 30,000 $80.00 $2,400,000
• Ben Hill 23,000 $80.00 $1,840,000
• Bulloch 22,000 $80.00 $1,760,000
• Emanuel 21,000 $80.00 $1,680,000
Pine Straw Opportunities
• MarketsContractors Available
Labor & Equipment
• Stand Conditions
Species, Stand age
Understory Competition
Selling Pine Straw: Per Bale• Difficult to anticipate
yield/earnings
• Paid for only those bales
removed - need accurate bale
counts
• Make sure that a “bale” is
defined in the contract; there is
currently no standard bale size
• High values on well-managed
stands
Selling Pine Straw: Per Acre
• Lump sum sale - $$ up front
• Straightforward sale; no guessing
or estimating bale counts
• Typically best way to sell for
absentee landowners
• 3 to 5 yr contracts are common
• Typical incomes of $60 to $125
/ac/yr
Pine straw raking period in Georgia• Typically from canopy closure
(age 6-10 yrs) to first thinning
(age15-23 yrs) or after a Federal
rental contract has expired
• In GA thinned stands are not
typically raked due to the large
acreage of unthinned stands
available for raking
• In SC and NC thinned longleaf
stands are often raked
Stand Level
Pine Straw Production
• Longleaf pine = 80 to 200 bales/ac
(up to 400 bales/ac in 1 case)
• Slash pine = 120 to 300 bales/ac
(up to 400 bales/ac in 2 cases)
• Loblolly pine = 150 to 400 bales/ac
(up to 520 bales/ac in 1 case)
Demand and per bale prices
(SE GA 2003 -2012)
• Longleaf = highest demand, $0.50 to $1.00/bale
• Slash = 2nd to longleaf, high demand, $0.40 to
$0.65/bale
• Loblolly = low to no demand, $0.20 to $0.35/bale
where raked
Pine Straw Production Rates
based on:• Species
• Basal area (stocking +
size), age
• Site productivity
• Raking intensity,
mechanical vs hand
baling, and
• % rakable stand
(understory vegetation,
debris)
Slash pine straw income on an old-
field site in SE GA (60 acres)Year Bales/acre (13x13x28”) Income/acre ($)
1999 94 61
2000 204 133
2001 172 112
2002 227 148
2003 223 145
2004 386 250
2005 148 96
2006 339 220
2007 241 157
2008 114 74
totals 2148 bales/ac $1396/ac
means 215 bales/ac/yr $139.60/ac/yr
24-yr. SLASH Financial Results.
Mean annual increment = 5.8 to 6.8 tons/A/Y
Med. Prices, PW, C-N-S, & ST & Site Prep. @ $250/Ac
Scenario#,
Fert.Thin @ yr. 15 Pine straw/ac % PW
MAI
(tons/ac/yr)Net $s
Internal Rate
of Return
1, No N N 60 5.77 $1437 6.96%
2, No Y N 46 5.55 1787 8.28
3, Yes N $50 48 6.28 2805 10.95
4, Yes N $100 48 6.28 3686 15.71
5, Yes Y N 40 6.16 2037 9.00
6, Yes Y$50
(age 8-14-yrs)38 6.16 2322 10.46
7, Yes Y$100
(age 8-14 yrs)38 6.16 2672 12.87
8, Yes Y$100 (yrs 8-14)
$50 (yrs 17-23)38 6.57 3177 13.80
Pine straw in forest management pays large dividends
Pine scenario
SEV $/ac using
average stumpage $
SEV $/ac using high
stumpage $
24-yr, one thin loblolly 262 834
33-yr loblolly 148 603
24-yr, one thin slash 84 542
33-yr slash 65 467
24-yr no thin loblolly 16 424
24-yr, no thin slash - 294
45-yr longleaf - 98
33-yr longleaf - -
15-yr loblolly 10 tons MAI - 272
15-yr loblolly, 8 tons MAI - 2
15-yr, 6 tons MAI - -
Table 22. Soil Expectation Values (SEVs) at 6% discount rate using average ($8.10, $19.80, $27.00/ton net) and high ($12.60, $33.30, $43.70/ton net)and the average establishment cost for the NO PINE STRAW scenarios
Pine scenario
SEV $/ac using
average stumpage $
SEV $/ac using high
stumpage $ (rank)
24-yr, no thin slash 627 984 (2)
24-yr, one thin loblolly 536 1108 (1)
24-yr, one thin slash 495 953 (3)
24-yr, no thin loblolly 479 887 (4)
45-yr longleaf 466 733 (8)
33-yr longleaf 438 673 (9)
33-yr slash 427 829 (6)
33-yr loblolly 390 844 (5)
15-yr loblolly 10 tons MAI 261 744 (7)
15-yr loblolly, 8 tons MAI 87 474 (10)
15-yr loblolly, 6 tons MAI - 203 (11)
Table 23. Soil Expectation Values (SEVs) at 6% discount rate using average ($8.10, $19.80, $27.00/ton net) and high ($12.60, $33.30, $43.70/ton net)and the average establishment cost with PINE STRAW INCOME scenarios
Hunting Leases • An arrangement (written legal contract) whereby the
landowner grants access to his/her property for hunting
for a certain period of time in exchange for a fee or
service
• Landowners can lease their property by the day, week, year or
multiple years – can have separate deer and turkey leases
increasing /ac/yr income (due to different seasons in GA)
• Hunting leases can solve trespass problems because you choose
who is hunting on your property – these hunters will tend to
keep others off your property
Hunting Leases • Typically an annual income scenario
•
• Markets - Distance to Atlanta, other large cities, or
Florida
• Habitat Quality– Duck habitat (water- rivers, creeks, beaver pond, rice
fields, marshes)
– Deer or Turkey habitat (woodland type, age, food plots,
access)
– Amenities: running water, electricity, RV hookups, cabin
Hunting Leases • Disadvantages:
– loss of privacy
– changes in farm operations to accommodate
hunters
– liability and safety concerns
– possible resentment from those that
previously hunted the property
Hunting Leases – keys to minimizing problems
• Selecting responsible hunters
• Securing proper insurance (leasees or leasors)
• Having a written lease (atty written) signed by all
parties
• Communicate regularly with hunters
Deer Hunting Leases – 2010 annual income
estimates in Georgia (2011 UGA Farm Gate
Survey)
average = $12/acre ($8.3 million total income)
Top 5 counties acreage Total value per year
Burke 350,000 $4.2 million
Washington 300,000 $3.6 million
Wayne 300,000 $3.6 million
Bulloch 285,000 $3.42 million
Echols 250,000 $3.0 million
Duck Hunting Leases – 2010 annual income
estimates in Georgia (2011 UGA Farm Gate
Survey)
average = $50/acre ($2.22 million total income)
Top 5 counties acreage Total value per year
Laurens 12,000 $600,000
Effingham 5,000 $250,000
Talbot 5,000 $250,000
Burke 2,500 $125,000
Colquitt 1,900 $95,000
Turkey Hunting Leases – 2010 annual income
estimates in Georgia (2011 UGA Farm Gate
Survey)
average = $2/acre ($7.1 million total income)
Top 5 counties acreage Total value per year
Echols 250,500 $501,000
Brooks 200,000 $400,000
Harris 200,000 $400,000
Stewart 200,000 $400,000
Putnam 150,000 $300,000
Economic impact of adding a hunt
lease to just growing wood products
With 7% land in food plots $5/ac/yr hunt lease
income+wood = wood only IRR = 10.5%
& $12/ac/yr IRR > 12.1%
U.S. gum naval stores species - slash and longleaf pine
> 6” dbh trees drilled at base, pvc pipe installed and bagged for gum collection
One SE GA producer noted that “A national company wants
25 million lbs of rosin and turpentine final product “
SE GA producers asked to make 500,000 lbs of rosin and turpentine/year
Producer “Opportunity to make $100 to $250/ac/yr
collecting gum from slash and longleaf stands”
• Labor and materials intensive
• Black turpentine beetle
problems
• Producers want gum delivered
in 50 gal drums ($0.50/lb
delivered price)
• Narrow tree work window
(2 to 5+ yrs)
• Some growth loss can occur
(4 to 6 %)
Information on the Web
• www.bugwood.org
• www.forestry.uga.edu
• www.forestproductivity.net