INSIDE // 4 Report Identifies Forest Sector Challenges // 5 P&P Check-Off Approved // 7 Timberlands Change Hands

By Marshall Thomas,president of F&W Forestry Services, Inc.

WINTER 2014 // NO. 119

Dreaming Of Being Average: Reflections On The First Wet Year In A While And What It Means Long Term

Forestry ReportA PUBLICATION OF F&W FORESTRY SERVICES, INC. // ALBANY, GEORGIA

After 10 or so years of drought, 2013 finally brought some welcome rain to the eastern seaboard. Wet weather ponds are, well, “wet”. The volume of understory vegetation in the forest looked to be double what it has been in recent years, which is great for wildlife and also an indicator of improved tree growth and health.

And the rains, along with increasing demand for wood products, also caused some

“growth” in tree prices—2013 brought the highest pine sawtimber prices since 2010 and small pine sawtimber (chip-n-saw) prices since 2008. Pine pulpwood prices remain strong, and hardwood pulpwood and sawtimber, across all of our regions, also looked good this year.

Perhaps most important are the underlying fundamentals of this recovery—pulp and paper remained in the Institute of Supply Management’s “Growth” category for the 11th consecutive month. Housing continues to improve in most categories, with the recent leader being the October report of 1.039 million building permits—the second time this year the million mark was exceeded. Most analysts are saying that we will reach 1.3 to 1.5 million starts by 2015, which will have us back to “normal” demand.

Wood pellets consumption also continues to grow, increasing demand for pulpwood sized trees.

Last but not least—U.S. exports of logs and lumber have also increased, contributing to increased demand beyond that associated with the improving domestic housing market.

Some encouraging news on the new product front is that the KiOR facility in Mississippi continues to produce gas and diesel from pine chips on a small scale and must be doing a good job of it—good enough to attract another $100 million in private capital to support the doubling of their production capacity. And a new study backed by the U.S. Endowment for Forests and Communities points out that paper packaging is gaining market share as a green alternative to petroleum-based packaging.

For the last few years, I have been saying that if we could only be “average” things would be great. Of course, this is a reflection of how low sawtimber prices sank during the economic downturn. But it is true that if we can simply get back to the trend sawtimber price over the next few years (around $45/ton), we would see an increase of about 60 percent over current prices.

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SOUTHEAST LAFAYETTE, AL $8–15 $13–19 $23–34 $6–12 $20–36 GAINESVILLE, FL $15–19 $18–24 $28–33 $9–13 $15–30 MARIANNA, FL $11–16 $18–20 $25–30 $5–8 $15–25 ALBANY, GA $10–14 $14–20 $24–35 $8–10 $20–30 MACON, GA $10–14 $14–20 $24–35 $9–12 $20–35 STATESBORO, GA $14–18 $17–20 $25–31 $10–15 $22–40 GREENWOOD, SC $8–9 $16–20 $26–32 $6–9 $18–22

CENTRAL REGION

CHILLICOTHE, OH $5–6 NA NA $2–3 $33–49 CLINTON, TN $2–5 NA $5–12 $3–7 $20–40 PARIS, TN $8–12 $12–15 NA $6–11 $30–37

WEST GULF

DEQUEEN, AR $6–13 $13–13 $20–24 $10–15 $22–38 EL DORADO, AR $5–8 $8–13 $19–32 $7–14 $23–55 CORINTH, MS $4–15 $11–15 $21–21 $8–11 $43–46 JACKSON, MS $4–8 $11–17 $18–35 $4–12 $25–35 HUNTSVILLE, TX $7–9 $14–15 $24–29 $7–9 $24–36

MID-ATLANTIC

CHARLOTTESVILLE, VA** $10–15 $13–20 $17–30 $5–9 $16–50

NORTHEAST

GLENS FALLS, NY*** $3–5 $7–14 $15–29 $6–8 $55–125 HERKIMER, NY*** $2–3 $7–12 $10–29 $4–7 $65–175

2013 FOURTH QUARTER PINE & HARDWOOD STUMPAGE PRICE RANGE*

*�All�Prices� in� tons,�based�on�sales�handled�by�F&W�offices.� If�no�sales�occurred,�prior�quarter’s�sales�and�other�data�are�used�to�compile�price�range.�Price�ranges�are�due�to�different�locations,�timber� quality,� logging� conditions,� type� of� harvest,� and� local� market� conditions.� To� convert� $/ton�to�$/cord�multiply�$/ton�price�by�2.7.�The�actual�range�for�our�sales,�depending�on�region,�is�from�2.6�to�2.8.�**Virginia�Pine�Sawtimber�is�$90-100�MBF�(I).�(S)�=�Scribner,�(I)�=�International,�(D)�=�Doyle.� ***�Northeast�Pine�Pulpwood�prices�also�include�Hemlock�and�Spruce.� (Continued on page 2)

Most landowners make their money from sawtimber sales—hence the title of this article. Most of us on the tree growing/landowner side of this business are dreaming of being average— after a long bad spell, average looks pretty good. And it looks to me like we are on the road to average, at last.

According to reports by F&W managers, timber prices across the southern pine region in 2013 turned in their best performances of the past few years. Prices for most pine products were favorably impacted by difficult logging conditions resulting from the record rains that swept across the Southeastern region from winter until late summer, when dry conditions returned and extended into fall and the early winter months resulting in an easing of prices for pine products.

Prices for sawtimber, still the weakest performer among southern pine products due to the housing slump, averaged $25.30/T for the year, up 8 percent from 2012’s

average of $23.34/T. While still low by historic standards, the 2013 sawtimber average was the highest since 2010. But there’s still a long way to go to a decent recovery in sawtimber prices. The sawtimber price average in 2005 before the housing bust was $43.75/T.

Small pine sawtimber (chip-n-saw) averaged $16/T in 2013, up a strong 12 percent from the previous year and turning in its best price year since 2008, when the average price was $16.87.

With the paper and packaging industry maintaining its strength of recent years, pine pulpwood prices continued to increase in 2013, reaching an overall average of $10.20/T. That’s a 13 percent increase over 2012 and almost double the average price 10 years ago.

In hardwood markets, prices in 2013 across F&W’s service area (including the Central Hardwoods and the Northeast) averaged $7.95/T for pulpwood, a 21 percent increase over 2012, and $36.47/T for sawtimber, up 15 percent over 2012.

PINE PULPWOOD AVERAGE SOUTHEAST / CENTRAL REGION / WEST GULF / MID ATLANTIC

PINE SMALL SAWTIMBER AVERAGE SOUTHEAST / CENTRAL REGION / WEST GULF / MID ATLANTIC

Marshall Thomas (continued)

TIMBER STUMPAGE PRICES ACROSS F&W’S SERVICE REGION

Forestry ReportPublication subscription rate: $60/year. For further information on material in this report or to discuss your forestry needs, contact the nearest F&W office or the Albany headquarters at:

PO Box 3610, Albany, GA 31706-3610(229) 883-0505 / fax (229) 883-0515www.fwforestry.com

Marshall Thomas, PresidentEley Frazer, ChairmanRob Routhier, Executive Vice President

REGIONAL OFFICES

Hamilton, AL LaFayette, AL DeQueen, AR Brock May Dennis LeBleu Jim Reese (205) 952-9369 T.R. Clark (870) 584-3016 (334) 864-9542

El Dorado, AR Gainesville, FL Marianna, FLJim Reese Russ Weber Elvis Carter(870) 864-8092 (352) 377-2924 (850) 482-6573

Albany, GA Statesboro, GA Corinth, MS Burke Walters Wade McDonald Robert Ekes Chad Hancock (912) 489-1655 (662) 286-9544(229) 883-0505

Jackson, MS Glens Falls, NY Herkimer, NY Keith Ward Wayne Tripp Wayne Tripp (601) 898-1550 (518) 480-3456 (315) 868-6503

Chillicothe, OH Greenwood, SC Clinton, TN Peter Gayer Nathan McClure Rick Sluss (740) 779-3917 (869) 230-1664 (865) 457-5166

Paris, TN Huntsville, TX Charlottesville, VATom Cunningham Ken Addy Glen Worrell(731) 642-3888 (936) 435-9223 (434) 296-1464

AFFILIATED COMPANIES

Stuntzner FMS Dallas, OR Uruguay Brazil

INVENTORY & MAPPING GROUPJeff Jordan / Albany, GA / (229) 883-0505 x136

FINANCIAL REPORTING GROUPSonya Usry / Albany, GA / (229) 883-0505 x138

ENVIRONMENTAL GROUPJohn Godbee / Statesboro, GA / (912) 489-1655

FOREST OPERATIONS GROUPBill Miller / (912) 655-3550

The F&W Forestry Report is produced by: Bates Associates / PO Box 191386Atlanta, GA 31119-1386 / (770) 451-0370bbates@batesassociates.net

©2014 F&W Forestry Services, Inc. Reproduction in whole or in part by electronic or mechanical means, without authorization from F&W Forestry Services, Inc., is prohibited.

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2 // f&w forestry services, inc. Providing management, consulting, and real estate services to landowners since 1962 • Winter 2014

PINE LARGE SAWTIMBER AVERAGE SOUTHEAST / CENTRAL REGION / WEST GULF / MID ATLANTIC

SOUTHEAST HARDWOOD PRICES HARDWOOD PULPWOOD / HARDWOOD SAWTIMBER

FOR MORE INFORMATION AND DATA, VISIT WWW.FWFORESTRY.COM

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Notes to designer:• You will need to manually draw connector lines because many of the data �elds are blank.• If you change any of the data, the ellipses will revert to squares. To change them back to ellipses, select your white arrow, option-click one of the squares, option-click again, and again until all squares are selected. Then go to E�ect > Convert to shape > Ellipses. Select absolute @ 0.05” • Only the graph area of this Illustrator �le will show in the InDesign frame. You will need to manually place the legend and x/y axises in InDesign. This is because working with Illustrator graph axises can get tricky if you have to change the data frequently and the Illustrator legends take up too much real estate.

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Notes to designer:• You will need to manually draw connector lines because many of the data �elds are blank.• If you change any of the data, the ellipses will revert to squares. To change them back to ellipses, select your white arrow, option-click one of the squares, option-click again, and again until all squares are selected. Then go to E�ect > Convert to shape > Ellipses. Select absolute @ 0.05” • Only the graph area of this Illustrator �le will show in the InDesign frame. You will need to manually place the legend and x/y axises in InDesign. This is because working with Illustrator graph axises can get tricky if you have to change the data frequently and the Illustrator legends take up too much real estate.

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2008 2009 2010 2011 2012 2013 Q1 Q2 Q3 Q4

U.S. House-Senate Conferees Fail To Reach AgreementOn New Farm Bill; Forest Roads Permit Issue Unsettled

A Conference Committee of the U.S. Senate and House failed to reach agreement on a new Farm Bill before the 2013 Congressional session adjourned leaving many issues unresolved, including a House provision to assure that forest roads do not require EPA permits.

Negotiations are expected to resume shortly after the new session of Congress covenes in January.

In addition to forests roads, many farm and forestry-related issues remain to be settled as well as an extension of the food stamp program that traditionally has been included as part of the Farm Bill.

The forest road provision in the

House bill would write into law a provision currently addressed by a 37-year-old EPA regulation that forest roads are a silviculture activity monitored under state Best Management Practices (BMPs) that do not require EPA permits. This provision is included in the House version of Farm Bill but not in the Senate’s, thus requiring Senate agreement in the Conference Committee to become law.

A broad coalition of 177 national, regional, and state forestry and supportive organizations has written the House-Senate conferees urging support of the House position. An environmental group based in the

Pacific Northwest is continuing to press for forest road permits through the federal courts despite a limited Supreme Court ruling that was generally unfavorable to their position.

“The bi-partisan silviculture legislation (passed by the House) will restore legal certainty, promote water quality, and protect jobs by preserving the EPA’s longstanding policy that such roads are non-point sources,” the letter from the forestry and allied groups to the conference committee said. “We strongly urge your support to retain this bi-partisan provision in the final version of the bill.”

Rise In U.S. Lumber, Log Exports Continue;East Coast, Gulf Ports Get Some Of The Action

U.S. log and lumber exports rose sharply in the third quarter of 2013 mostly from the West Coast to the Far East but with Eastern and Gulf ports gaining a share of the overseas shipments thus far this year.

The U.S. Forest Service’s regional office in Portland, Ore., reported that total U.S. log and lumber exports from all ports for the first nine months were up substantially from the comparable period the previous year—22 percent

for logs and 10 percent for lumber. But West Coast ports, nearer to

the Far East, easily led in exports, primarily to China with its exploding housing construction sector. In the third quarter, China alone imported 116 million board feet of West Coast lumber, a whopping 45 percent increase over the previous quarter. Log exports, however, slipped by 5 percent.

“At West Coast ports, 41 percent of outgoing lumber and 64 percent of

outgoing logs were destined for China during the third quarter of this year,” the Forest Service reported.

While West Coast lumber exports overall increased in the third quarter, log shipments slipped 10 percent. However, the value of log exports in the third quarter was still substantially greater than for sawn lumber: $359 million for logs versus $200 million for lumber.

Winter 2014 • www.fwforestry.com // 3

A new report by a group of U.S. forestry leaders and academics finds the market outlook for tree products “generally optimistic” but identifies challenges for the forest sector.

“Both the forest products industry and, accordingly the forestry sector, in the United States have experienced extreme volatility, unprecedented challenges, and substantial change over the past two decades,” the report said. “In many areas, old operating assumptions have been challenged and discarded at an increasingly rapid pace, and practitioners, policy makers, researchers, and educators have

struggled to keep up.”The report—entitled “The State

and Future of U.S. Forestry and the Forest Industry”— grew out of a spring meeting of forestry leaders in Washington to ponder challenges and discuss coming changes in the U.S. forestry sector. The meeting was sponsored by the U.S. Department of Agriculture’s Forest Service (USFS) and the U.S. Endowment for Forestry and Communities, a forestry “think tank” based in Greenville, S.C.

Co-authored by five prominent forestry leaders and academics, the

report addressed in strong terms several public policy issues that it found troublesome for the forestry sector. High on the list were regulatory challenges emanating primarily from the Environmental Protection Agency on several fronts, including the high cost to the forest and other industries in meeting existing and future air and water quality requirements.

“Several regulatory proposals impacting the forestry sector are currently under consideration, and many others are already in place,” the report noted. “The EPA is considering how to regulate biogenic carbon from

wood-to-energy and how to handle aerial pesticide applications….Despite a Supreme Court ruling reversing a lower court’s decision, there is still uncertainty regarding how silviculture will be treated under the Clean Water Act,” a reference to the forest roads issue.

“While these air and water quality regulations, species protection, and other requirements serve important public purposes, the details of their design and implementation impose significant costs,” the report noted.

The report also spoke out against

the adverse impact on lumber and other wood building products by certain “green” building standards, specifically the so-called LEED standards promulgated and pushed by the U.S. Green Building Council, a non-government organization. And it made a strong pitch for increased funding for forestry and forest conservation programs in the farm bills periodically enacted by Congress, including the one now pending.

“According to USDA, family farms account for almost 96 percent of the 2,204,792 farms in the U.S.,” the report noted. “There are more than 11 million family forest landowners. Yet Farm Bill funding, including the conservation titles, largely goes to farms. Securing additional funding for family forest landowners is a priority.”

Discussing the major U.S. forest product markets, the report said the paper and packaging industry continues to improve with much of the increasing product demand coming from emerging markets in China, Brazil, and India.

“Worldwide demand for paper and paperboard is expected to rise at an average 2.4 percent annually,” the report said. “Yet, this overall average growth belies significant changes happening within the segment. Newsprint is expected to continue declining at about 5 percent per year with printing and writing paper slipping by 3 percent.

“Despite the rise of a digital world, paper remains a critical necessity,” the report continued. “It is on the rise as a green alternative to petroleum-based packaging. Research and innovation continue through product improvements, such as stronger corrugated boxes, as well as the development of new products.”

In contrast to paper and packaging, the report said markets for lumber and other wood building products are not expected to rebound totally from

New Study Of U.S. Forest Sector Identifies ChallengesBut Is Generally Upbeat On Near-Term Market Prospects

(Continued on page 5)

Domestic and foreign markets for lumber and other wood building products look very positive beyond 2015 according to The State and Future of U.S. Forestry and the Forest Industry report.

© leekris - Fotolia.com

4 // f&w forestry services, inc. Providing management, consulting, and real estate services to landowners since 1962 • Winter 2014

The paper and paper-based packaging industry has voted overwhelmingly to finance through a company check-off plan a “got milk”-style program to promote greater use of its products that stands to benefit tree growers.

In a referendum overseen by the U.S. Department of Agriculture (USDA), 85 percent of the companies representing 95 percent of the production capacity voted to assess themselves to finance a generic promotion program aimed at increasing use of paper-based products.

The paper industry program follows in the footsteps of U.S. and Canadian lumber softwood manufacturers who two years ago voted to promote their products through an industry-financed promotion program aimed primarily at architects, engineers, and construction officials. The paper

industry promotion, however, is expected to be aimed more directly at consumers along the lines of the famous “got milk” promotion of the dairy industry and similar efforts by other farm and food groups.

The pulp and paper check-off was initiated by industry leaders and approved by the companies that will be assessed to pay for the program. USDA gets into the act because it administers the U.S. law that authorizes the check-off programs used to promote agriculture products.

“The industry’s approval of the Paper Check-off program offers a new opportunity to build our long history of innovating paper products to meet the needs of consumers around the world,” said David Scheible, chairman of the American Forest & Paper Association and CEO of Graphic Packaging International.

“Paper and paper-based packaging is a sustainable choice and the Paper Check-off will allow us to make a concerted effort of educating and informing consumers of the benefits our products offer,” Scheible said.

The paper industry’s program comes some two years after Domtar Corporation, a Canadian-based paper and packaging company with major U.S. operations, launched a promotion effort of its own under the theme of “Paper Because.” It also comes as the U.S. hardwood lumber industry is in the process of seeking authorization through the “check-off” process to establish its own promotional program.

Forest landowners stand to gain through the check-off promotions since their trees provide the basic raw materials for all three industries.

Pulp & Paper Industry Approves Self-Financed PlanTo Promote Use Of Paper And Paper-Based Packaging

the catastrophic fall in new home construction during the recession and its aftermath before 2015.

“Full recovery of about 1.5 million new units annually will probably not occur until 2015 due to remaining inventory of vacant homes,” it said. “At the same time the industry is having difficulty responding to a modest increase in demand over 2009 levels due to the shrinkage in mill capacity during the recession.

“Assuming the manufacturing capacity question can be resolved, domestic and foreign markets beyond 2015 look very positive,” according to the report.

It also noted the sharp increase in a relatively short period in production of wood pellets primarily for export to European Union countries as a coal

replacement for electricity generation to comply with the EU’s carbon emission reductions. But the report took note of some consequences of the pellet export trade on U.S. forest resources.

“The feed stocks supplying this market have traditionally been composed mainly of byproducts from other sectors or waste materials,” it said. “However, new large-scale mills capable of producing one million tons or more annually, are sourced from thinnings and small diameter trees that have traditionally supplied the pulpwood and oriented strand board (OSB) segments.”

“The State and Future of U.S. Forestry and the Forest Industry” was prepared by Michael Goergen, director of P3Nano, U.S. Endowment for Forestry

and Communities, Bethesda, Md., and former executive vice president and CEO of the Society of American Foresters, Washington, D.C.; James Harding, Ph.D, program director of Masters of Science in Environmental Studies, Green Mountain College, Poultney, Vt.; Carlton Owen, president and CEO, U.S. Endowment for Forestry and Communities, Greenville, S.C.; Mark Rey, Executive in Residence, Michigan State University, and former Undersecretary for Natural Resources and the Environment, U.S. Department of Agriculture; P. Lynn Scarlett, managing director for Public Policy, the Nature Conservancy, and former Deputy Secretary of the U.S. Department of the Interior.

Access the report at http://www.usendowment.org/images/Forest_Sector_Report_--_FINAL_9.5.13.pdf

(Continued on page 5)

State Of Forestry (continued)

Winter 2014 • www.fwforestry.com // 5

KiOR, a start-up alternate energy venture that appears to be successful in producing petroleum products from pine chips, has obtained $100 million in new private financing to double the capacity of its Columbus, Miss., refinery through a second facility at the site.

The bulk of the new financing—$85 million—came from Khosia Ventures III and various other fiscal entities of Vinod Khosia, a venture capitalist who has already invested heavily in KiOR and other start-up companies seeking to develop alternatives to oil from biomass sources, including wood chips.

The other $15 million commitment to the expansion of the Columbus facility, according to a KiOR news release, came from a new investor in the Mississippi start-up: Gates Ventures, LLC, an affiliate of Bill Gates, a Microsoft co-founder and one of the world’s richest persons.

“I was impressed when I visited KiOR’s Columbus facility and learned more about the company’s technology,” Gates was quoted in the news release as saying. “I

am happy to be joining the other investors in support of KiOR’s efforts to move its technology forward.”

“This equity financing completes what we currently believe will be the last equity portion of the Columbus II Project, which we believe, will facilitate the ability…to achieve positive cash flow from operations sometime in 2015,” said Fred Cannon, KiOR’s chief executive officer.

The company has shipped limited quantities of both gasoline and diesel fuel produced from pine wood stock at the Columbus facility. Cannon told The Wall Street Journal in a recent article that production from the combined facilities at Columbus will produce unsubsidized cellulosic fuel at a cost of about $2.70 a gallon at the current yield of 72 gallons per ton of feedstock.

Khosla, commenting in the KiOR news release announcing the Columbus facility expansion, said the ultimate goal is to produce 92 gallons of hydrocarbon fuels per bone dry ton of pine chip biomass.

“I believe that KiOR’s proprietary technology platform is substantially

better, and can produce hydrocarbon fuels at lower cost, than any other currently visible biofuels fermentation technology, cellulosic or otherwise, that I am aware of,” he said. “I expect cash costs per gallon (excluding depreciation) on an energy content basis at the two Columbus facilities should be lower than today’s corn-based ethanol.

“I also believe that KiOR’s cellulosic fuels, which have a higher per gallon energy content than ethanol and can integrate seamlessly into the existing hydrocarbon fuels infrastructure, will provide a biofuel alternative without blendwall issues that is more attractive than ethanol…,” Khosla said.

Not all of the start-up alternative energy companies backed by Khosla have proven as successful as KiOR appears to be thus far. A notable failure was Range Fuel’s effort to produce cellulosic ethanol from pine biomass at a multi-million dollar facility in South Georgia that ended in bankruptcy in 2011.

KiOR Raises $100 Million To Double Miss. Plant Output;Microsoft Founder Bill Gates Takes Stake In Venture

Wood pellet exports from the U.S. South to Western Europe rose to 700,000 tons in the second quarter of 2013, a 16 percent increase over the first period.

According to the North American Wood Fiber Review, pellet exports in the second half of 2013 will come in even higher, bolstered by shipments through U.S. Gulf ports from new plants that have come on line in Texas and Alabama.

U.S.-produced wood pellets are

in strong demand in Europe as low-carbon substitutes for coal in electricity generation to meet European Union environmental requirements.

Canada, a traditional supplier of pellets to E.U. member countries, has lagged behind the U.S. in the past couple of years and now accounts for 38 percent of North America’s of European exports, down from 62 percent as recently as two years ago, according to

Fiber Review. However, the publication reports

that several Canadian provinces are increasing pellet production capacity and that European exports “will probably expand significantly in the coming year (2014).”

The United Kingdom is the major importer of pellets from North America and is expected to increase its consumption over the next several years, according to the report.

U.S. Pellet Exports Continue To Climb;Canada Gears Up To Increase Its Share

6 // f&w forestry services, inc. Providing management, consulting, and real estate services to landowners since 1962 • Winter 2014

Plum Creek To Buy MeadWestvaco Timberlands;Gets 50 Percent Of Development Lands In Charleston

In a block-buster deal, MeadWestvaco Corporation (MWV) has agreed to sell its U.S. timberland holdings of 501,000 acres plus a share in its Charleston area high-value development property to Plum Creek Timber Company, Inc., for $1.1 billion.

The deal further solidifies Seattle-based Plum Creek as the largest U.S. timberland owner with some 6.3 million acres in all major forested regions of the United States. Plum Creek is not a pulp and paper manufacturer but does have lumber mills in the Northwest. Its main business is growing and selling timber.

Under the deal, Plum Creek will acquire 501,000 acres of industrial timberlands in Alabama, Georgia, South Carolina, Virginia, and West Virginia for $869 million, a joint venture investment in 109,000 acres development-quality lands near Charleston, S.C., for $152 million, and subsurface rights, mineral rights and wind-power rights associated with the timberlands for $65 million.

However, MeadWestvaco will retain full ownership of its oil and natural gas rights on 191,000 acres in West Virginia that are located over the Marcellus Shale concentration.

As part of the transaction, the parties will execute a 25-year fiber supply agreement whereby pulpwood from the forestlands in Virginia and West Virginia will continue to supply fiber to MWV’s paperboard mill at Covington, Va. The agreement provides that the forestland will continue to be managed under standards required by Sustainable Forestry Initiative (SFI) certification requirements.

Plum Creek said timber harvest from the acquired forest lands is expected to average nearly three million tons annually over the next 10 years, increasing its annual harvest more than 15 percent.

“This transaction adds significantly to our existing timber resource base and is expected to be cash flow accretive in the first 12 months,” said Rick Holley, Plum

Creek chief executive officer. “These timberlands have a long history of excellent forest management.

“The high stocking levels and older age of the timberlands make them particularly attractive,” Holley added. “These assets should integrate seamlessly into our existing timber ownership in the Southeast and add to our presence in key markets.”

MeadWetvaco, whose roots run deep in the U.S. pulp and paper industry, also expressed satisfaction with the deal.

“This transaction delivers on all our objectives,” said John A. Luke, Jr., MWV chairman and CEO. “It enables us to maximize the value of our land holdings in a tax-efficient manner, while retaining the substantial upside potential of the attractive real estate opportunities in the growing Charleston market. At the same time we are maintaining a secure source of fiber for our mills.”

Following closely on the heels of the Plum Creek-MeadWestvaco deal, St. Joe Company based in Watersound, Fla., announced the sale of 382,834 acres of forestland in the Florida Panhandle to an affiliate of the Mormon Church for $565 million, or approximately $1,476 per acre.

The Florida lands, spread over nine counties, were assembled in the last century by a branch of the DuPont family and provided the primary wood source for a huge pulp and paper mill located at Port

St. Joe on the Florida Gulf Coast. The mill was closed and dismantled several years ago.

The present St. Joe Company is primarily a real estate and resort-area developer. The sale does not include land within the company’s existing or planned residential, commercial, or resort developments.

St. Joe’s announcement of the sale said the buyer of the timberland is Ag Reserves, Inc., a Utah company affiliated with The Church of Jesus Christ of Latter-Day Saints (Mormon) based in Salt Lake

City. The announcement said the church-related company “intends to maintain timber and agricultural uses of the land.”

According to the Times newspaper of Tampa Bay, the purchase will make the Mormon Church Florida’s largest landowner. Its affiliated company currently owns 290,000 acres spread over three counties in Central Florida with operations in beef cattle, citrus, timber, and agriculture.

St. Joe To Sell Former Paper Company LandIn Florida Panhandle To Mormon Church Affiliate

Winter 2014 • www.fwforestry.com // 7

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540

650

Notes to designer:• Only the graph area of this Illustrator �le will show in the InDesign frame. You will need to manually place the legend and x/y axises in InDesign. This is because working with Illustrator graph axises can get tricky if you have to change the data frequently and the Illustrator legends take up too much real estate.

2008 2009 2010 2011 2012 2013 Q4

RESIDENTIAL CONSTRUCTION LUMBER PRICES

650

540

430

320

210

100

30-YEAR FIXED RATESource: Freddie Mac

SOUTHERN PINE–S/MBFSource: Random Lengths Southern Pine Composite Index

US DOLLAR VALUE AGAINST 26 MAJOR TRADING PARTNERSSource: Federal Reserve

266

350

246 239

TIMBER MARKET INDICATORS

244

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

Notes to designer:• If you change any of the data, the ellipses will revert to squares. To change them back to ellipses, select your white arrow, option-click one of the squares, option-click again, and again until all squares are selected. Then go to Effect > Convert to shape > Ellipses. Select absolute @ 0.05” • Only the graph area of this Illustrator �le will show in the InDesign frame. You will need to manually place the legend and x/y axises in InDesign. This is because working with Illustrator graph axises can get tricky if you have to change the data frequently and the Illustrator legends take up too much real estate.

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

Notes to designer:• If you change any of the data, the ellipses will revert to squares. To change them back to ellipses, select your white arrow, option-click one of the squares, option-click again, and again until all squares are selected. Then go to Effect > Convert to shape > Ellipses. Select absolute @ 0.05” • Only the graph area of this Illustrator �le will show in the InDesign frame. You will need to manually place the legend and x/y axises in InDesign. This is because working with Illustrator graph axises can get tricky if you have to change the data frequently and the Illustrator legends take up too much real estate.

HOUSING PERMITS

2008 2009 2010 2011 2012 2013 Q4

1.8

1.6

1.4

1.2

1.0

0.8

0.6

0.4

1.8

1.6

1.4

1.2

1.0

0.8

0.6

0.4

IN MILLIONS OF UNITS (ANNUALIZED) THROUGH NOVEMBER Source: US Department of Commerce

IN MILLIONS OF UNITS (ANNUALIZED) THROUGH NOVEMBERSource: US Department of Commerce

HOUSING STARTS

.781.905 .906

.572 .554.605 .624 .587 .609

2008 2009 2010 2011 2012 2013 Q4

200

250

300

350

400

Notes to designer:• Only the graph area of this Illustrator �le will show in the InDesign frame. You will need to manually place the legend and x/y axises in InDesign. This is because working with Illustrator graph axises can get tricky if you have to change the data frequently and the Illustrator legends take up too much real estate.

2008 2009 2010 2011 2012 2013

400

350

300

250

200

284261

Q1 Q2 Q3 Q4

3

4

5

6

7

Notes to designer:• This is a column graph with a manual area �ll. The area fill is on a separate layer. • Only the graph area of this Illustrator �le will show in the InDesign frame. You will need to manually place the legend and x/y axises in InDesign. This is because working with Illustrator graph axises can get tricky if you have to change the data frequently and the Illustrator legends take up too much real estate.

MORTGAGE RATES

2008 2009 2010 2011 2012 2013

7

6

5

4

3

6.03%

5.04%

4.69%

Q1 Q2 Q3 Q4

90

100

110

120

130

Notes to designer:• This is a column graph with a manual area �ll. The area fill is on a separate layer. • Only the graph area of this Illustrator �le will show in the InDesign frame. You will need to manually place the legend and x/y axises in InDesign. This is because working with Illustrator graph axises can get tricky if you have to change the data frequently and the Illustrator legends take up too much real estate.

US DOLLAR

130

120

110

100

90

100106

97

2008 2009 2010 2011 2012 2013 Q1 Q2 Q3 Q4

IN MILLIONS OF UNITS (ANNUALIZED) THROUGH OCTOBER

102

.830

4.45%

3.66%

100

3.50%

294

241

312

.960.919

328

423

100 1013.69%

395

4.44%102

363

1024.30%

359

PRESORTED1ST CLASS

US POSTAGEPAID

PERMIT #4009ATLANTA, GA.

PO Box 3610 Albany, Georgia 31706