SPRING 2012 • VOLUME 28 • NO. 2

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NEXT ISSUE . . .

Management Plans

PERMIT NO. 1386 NO. PERMIT

TLAND, OR TLAND, POR

AID P

Portland, OR 97221 OR Portland, U.S. POSTAGE U.S.

4033 S.W. Canyon Rd. Canyon S.W. 4033

Non Profit Org Profit Non Northwest Woodlands Northwest This magazine is a benefit of membership in your family association TABLE OF CONTENTS DEPARTMENTS 3 PRESIDENTS’ MESSAGES Spring 2012 6 DOWN ON THE FARM FEATURES 26 CALENDAR GLOBAL PRODUCTS MARKETS: IMPACTS ON 28 TREESMARTS FAMILY FOREST OWNERS 30 TREEMAN TIPS Changes to the global forest industry have resulted in shifts in demand for North American forest products. What’s in store for Northwest family ON THE COVER: forest owners? 8 BY CHRIS KNOWLES AND ERIC HANSEN DECIPHERING FOREST PRODUCTS MARKET TRENDS IN OREGON, WASHINGTON, IDAHO AND MONTANA A stalled housing market, the Great Recession, and a robust export market are just a few factors that have affected local harvest levels, production, and employment in the Northwest. 12 BY XIAOPING ZHOU AND RACHEL WHITE A ship gets loaded with logs at the Port of Port Angeles in WHAT YOU SHOULD KNOW ABOUT THE LOG EXPORT Washington. Photo courtesy of Susheen Timber Trading. MARKET With a booming export market, find out if your have what it takes. Bottom photo: These properly manufactured logs are intended 16 BY MICKEY BELLMAN for the high-value export sort market. Photo courtesy of Steve Bowers. CAVEATS WHEN MARKETING LOGS Nervous about selling logs and timber? This article provides some pertinent STAFF: points to ponder in the world of marketing. LORI D. RASOR, Editor 18 BY STEVE “TREEMAN” BOWERS MICHELE DOCY, Assistant 4033 S.W. Canyon Rd. Portland, OR 97221 TIPS TO CONSIDER BEFORE : HOW TO HARVEST 503-488-2104 AND QUESTIONS TO ASK A CONTRACTOR [email protected] Harvesting by family forest owners can be a once-in-a-lifetime event. These MINTEN GRAPHICS, Graphic Design tips will make you a better-informed landowner. Northwest Woodlands Advisory Committee Members: 22 BY REX STORM Mike Barsotti Bob Brink HOUSING OUTLOOK FOR 2012 Rick Dunning There’s still plenty of trouble, but modest gains are forecast. Jim James John Poppino 24 BY RANDOM LENGTHS PUBLICATIONS INC. Lori Rasor Ed Styskel

Northwest Woodlands is published quarterly by the World Forestry Center for the Oregon Small ALSO IN THIS ISSUE . . . Woodlands Association, Washington Farm Forestry Association, Idaho Forest Owners Association and 29 LETTER TO THE EDITOR 31 OSWA ANNUAL MEETING Montana Forest Owners Association. Other than general editing, the articles appearing in this publication have not been peer reviewed for technical accuracy. The individual authors are primarily responsible for the content and opinions expressed herein.

2 . NORTHWEST WOODLANDS . SPRING 2012 logs for decades to come. I’d call that pretty good “crop” insurance. Take a PRESIDENT’S MESSAGE good look at Montana, Colorado, and Arizona to see an economic disaster, Idaho where they have virtually no timber markets. IFG, a merger of Bennett KENNON McCLINTOCK Lumber Company and Riley Creek Lumber Company, has evolved into a very well-run company. IFG operates very modern facilities with the best Idaho Log Markets Strongly technology in the industry—and they are constantly upgrading. Their upper Supported by the Idaho Forest Group management is smart, innovative, pro- gressive, and community-minded. They treat their employees well and provide he downfall in the economy has A quick overview would show that one good paying jobs and careers. Other certainly had a hold on the Idaho company, the Idaho mills in northern Idaho seem to be get- forest products industry and this Forest Group (IFG), controls probably T ting by, but I don’t hear much about recession appears to want to continue 70+ percent of the lumber market in mill upgrades and modernization. Some for several more years. No matter who Idaho; on the surface this may appear a may call IFG overly aggressive—but becomes our next U.S. President, and bad competitive position for forest take a minute and think about our situ- no matter who we elect to Congress this landowners. To be brutally honest ation. An aggressive company like IFG November, if these politicians don’t though, IFG may dominate here in is exactly what we need here in order to address the national debt problem (start Idaho, but they are “here to stay.” keep our industry viable—and to keep it paying it down in a big way) and start For forest landowners, this means here in Idaho. And that is good for all carrying a positive operating budget, we that we will have a future home for our inland forest landowners! ■ all will suffer for decades to come. We can’t continue to pretend that there is a quick fix at the next bend in the road. Hopefully, our next U.S. President will come to office with some good business experience and good common sense on which he can rely. The “career politi- cians” need to just stay home for the next eight years and let real “working” people fix our great country. It still means we will have many trying years to come, but I’d rather endure that sce- nario than the inevitable economic col- lapse of a $14+ trillion dollar debt. Getting back to the business at hand, in Idaho we are really lucky to still have the log markets we do, though I’m sure Sustainable Forestry Initiative many of my colleagues would disagree. Purchasing Douglas-fir sawlogs and timber at the following locations:

Olympia,WA 360-596-4232 Longview,WA 360-414-3401

NORTHWEST WOODLANDS . SPRING 2012 . 3 Kangbashi in Ordos, a wealthy coal- mining district in Inner Mongolia. PRESIDENT’S MESSAGE Designed to accommodate one million people, the city has duplexes, houses, apartments, and all the public buildings Oregon that accompany a city of that size. NANCY HATHAWAY Many of the properties have been sold to speculators but few are occupied. There is a city of Dongsheng, 30 miles away, where 1.5 million of Ordos’ citi- Ghost Cities of China zens live, unable to afford the luxury units. id you send logs to China? Many construction of concrete forms. It’s said that China has 10 ghost in Oregon and Washington did Russia and New Zealand are the cities with 65 million empty housing D and our ports were booming. main suppliers of logs to China. Even units and is planning to build 20 more Lines of log trucks continually pulled though the Pacific Northwest (includ- cities in the next 20 years. into Longview log yards, dumped their ing British Columbia) is a small per- Why this over-building in China? loads, then quickly turned around to get centage, the China market is very The Chinese government made eco- another load. The China market has important to us. nomic growth a #1 priority forcing been keeping up log prices for several So, where did all that end up? local governments to meet a higher years. Log quality didn’t have to be China has been building new cities, fast GDP target. Developers keep building great—like the former “Japan sort” rail infrastructure, and highways. All of and selling units to finance the contin- years ago. These logs were to be used for them beautiful, modern, sparkling...and ued building. Also, Beijing wants to basically unused. Empty. move industry to the resource-rich For example: the South China Mall West, away from the high cost of WARREN R. WEATHERS in Dongguan, largest in the world built coastal cities so that China can still be MBA, ACF on the Las Vegas model with carnivals, competitive. Major highways and rails Registered a canal, and space for 2,350 shops— lead to stations farther west around Professional expecting 70,000 to 230,000 shoppers a which new cities are built. Does the Certified General Appraiser day. Today it’s mostly occupied by Chinese government have enough maintenance workers and a few clerks. money to bankroll this indefinitely? Forest and Rural Property This mall was built by Hu Guirong, Some analysts think that the housing Appraisal & Analysis instant-noodle billionaire, and financed bubble won’t burst USA-style because Pacific Northwest and Alaska by the Agricultural Bank of China at investors are required to pay 30 percent Appraisals for: Estate Planning & $154 million. Even though the South down with the remainder paid within Tax Reporting • Dispute Resolution China Mall is located near huge metro- three years. But the fact is that China Takings • Damages politan areas, it was built on former has overproduced housing and the peo- farm land, which means visitors have ple are under consuming. So the govern- 541-937-3738 to bus or taxi to the mall. ment has finally stepped in. The Chinese PO Box 39 • Lowell, OR 97452 Another example: the city of Banking Regulatory Commission has made loans much more difficult to obtain, with loans down 75 percent in the second quarter of 2011. Now foreign loans with equity investors (sharehold- ers) are flowing in. However, at the end of the day, Beijing holds all the cards. The most important question to us is, will this China log market end? Will it be with a slow decline (as it appears right now), an up-and-down cycle, or will there be a bust that affects global economies? You can find more information, photos, and videos by googling “Chinese ghost cities.” ■

4 . NORTHWEST WOODLANDS . SPRING 2012 PRESIDENT’S MESSAGE STATE OFFICERS IFOA PRESIDENT: Kennon McClintock Washington 208-255-9158 • [email protected] SAM COMSTOCK VICE PRESIDENT: Jim Nichols 208-582-0024 • trinitytreefarm@ gmail.com SECRETARY: Janet Benoit Marketing Logs and WFFA 208-683-2407 • [email protected] TREASURER: JoAnn Mack his issue of Northwest Woodlands The buyer might even suggest that the 208-699-0308 • [email protected] is about log markets. The WFFA yard would prefer to manufacture the EXECUTIVE VICE PRESIDENT: Kirk David T goes to great lengths to inform pole and get the best possible price for PO Box 1257 • Coeur d’Alene, ID 83816 its members about current conditions the timber owner. 208-683-3168 [email protected] with log markets as it is an element of The harvest that we did last summer tree farming near and dear to all of us came about rather suddenly. Mike OSWA small woodland owners. This is one of Nystrom, the DNR Western Steward- PRESIDENT: Nancy Hathaway the great advantages of being a mem- ship forester, suggested we might con- 541-758-5510 • [email protected] ber of WFFA. For some of us, har- sider getting some done per PRESIDENT ELECT: Scott Hayes vests are few and far between, but oth- our management plan as the pulp mar- 503-992-1509 • [email protected] ers in your chapter may be harvesting ket was up. I submitted a five-year 2nd VICE PRESIDENT: Donna Heffernan more frequently or even be making FPA that covered everything in our 541-786-2257 • [email protected] their livelihood from sustainable har- management plan. I talked to Gene 2nd VICE PRESIDENT: Bill Potterf vests on larger holdings. Anest, a chapter member who does his 541-479-0868 • bmpotterfrio.com This pool of small forest landown- own harvesting and is a student of log ers that includes some professional markets. He was unavailable to move 2nd VICE PRESIDENT: David Schmidt 541-979-7523 • [email protected] is a great resource. Some his equipment in, so I called Jim Frost, WFFA members are active in related a local forester at Lusignan Forestry 2nd VICE PRESIDENT & SECRETARY: Katie Kohl industries and have access to a lot of who recertified our under 541-451-1734 • [email protected] information. Chuck Holland spoke on ATFS, and asked if he would market markets at the 2011 WFFA annual our logs. Lusignan advertises in this PAST PRESIDENT: Ken Faulk 541-929-8422 • [email protected] meeting. Chuck has information that publication. Jim accompanied me he will share on activities on a world along with WFFA member Rich Eger EXECUTIVE DIRECTOR: Jim James 187 High Street NE, Suite 208 • Salem, and local scale that directly pertain to for the ID team visit for an alternate OR 97301 • 503-588-1813 log market conditions, current hous- plan (fixed width buffer). Within a few [email protected] ing starts statistics, global forestry days we had permit in hand and Jim demand and activity, industrial forest- had an operator that moved in imme- WFFA land sales and purchases, and mill clo- diately from a nearby show they had PRESIDENT: Sam Comstock sures and curtailments to name some. just completed and we were able to 360-427-2725 • [email protected] He can be contacted via email at capitalize on a good market. Keep in 1st VICE PRESIDENT: Steve Stinson [email protected]. mind the haul costs when looking at 360-736-5918 • stevestinson@ Being active with WFFA brings one various buyers. familyforestfoundation.org in contact with many of these people. In conclusion, being a member of 2nd VICE PRESIDENT: Matt Hobbs WFFA has a number of members that WFFA keeps us in the loop and pro- 509-442-3578 • [email protected] are very active and seek to gain the vides us trustworthy contacts to take SECRETARY: Michelle Blake maximum return on their logs. And of best advantage of the log markets. ■ 360-790-5498 • [email protected] course anyone currently harvesting will TREASURER: Bill Scheer, Jr. have information on their activities. 360-269-3850 • wscheer@wafarm- Log buyers will offer to give presenta- forestry.com tions at meetings and give advice on 1st PAST PRESIDENT: Bob Brink marketing. In many instances they will Forestland For Sale 360-686-3524 • [email protected] advise to have a buyer survey a stand [email protected] Forester/Broker EXECUTIVE DIRECTOR: Rick Dunning before harvest. One can seek a firm bid P.O. Box 1010 • Chehalis, WA 98532 before falling timber. This can be espe- 360-736-5750 • [email protected] cially important when marketing poles.

NORTHWEST WOODLANDS . SPRING 2012 . 5 cides, harvest timber, construct or reconstruct roads, and run power equipment. ❑ Process your firewood before fire season starts.

JUNE

u Fire Season is Here. Most of us will have fire season start in May or June.With typically more hot days occur- ring in May and erratic summer precipitation, fire season DOWN ON THE can grow longer even for wetter sites in northwest Oregon and western Washington. Here are a few things you could do to reduce fire danger and/or be prepared TTRREEEE FFAARRMM for quick response. ❑ Make sure your fire equipment is in good working order.Your best bet in preventing a large fire is to TIPS & TRICKS OF THE DAY: Joining your local find it early, and keep it small, until help arrives. woodland organization is good. Being an active member is better. ❑ Don’t have any fire equipment? Maybe you should acquire some for quick response.Your local forest fire protection agency has a list of required equipment WHAT TO DO IN . . . to run an operation during fire season and this might be a good place to look to see what you might want MAY to acquire. Used equipment is cheaper after fire sea- son than just before fire season. u Purchase Seedlings for Winter 2012/2013 Planting. ❑ Make sure your power saw spark arrestor screen is You need to know how many acres you are planting, ❑ functional. the number of trees you will plant per acre, and the species you are going to plant. Acres times trees per ❑ Have your fire extinguishers recharged and checked acre will give you the number of seedlings you need out.The contents can settle to the bottom of the to order. extinguisher and will not help you extinguish a fire. ❑ Make sure you have at least one operating fire extin- u Sap is Up. guisher in each of your vehicles, on each piece of equipment and on your person when you operate a ❑ May and June are not the months to be doing a thin- ning operation.The bark is easily knocked off the power saw, lawn mower, weed whacker, etc. trees you are not harvesting. Bark is like your skin ❑ Operate equipment in compliance with the fire regu- protecting the tree from disease and decay.You lations that apply to your forest property. Apply won’t find any tree Band-Aids in your first aid kit these regulations to your home site if it is on or adja- either. Not damaging the bark is the best plan. cent to your forestland, even if it technically falls under another fire protection jurisdiction that is less u Running Behind: This is a do-it-yourselfer malady restrictive. So, don’t mow your lawn or driveway or occasionally caught by others. around your seedlings in the heat of the day when a logging operation in your forest would be shut ❑ Projects: Dead limbs are okay. Limbs with needles and leaves are off limits until the sap stops down. flowing and your beetles are no longer reproducing. ❑ Beware of ATV riders during hot dry weather.They can easily start fires. ❑ Moisture Control: Most herbicides will kill or damage your seedlings when they are actively growing, so ❑ Build a pond for a pump chance and/or access by a you need to keep the spray off your seedlings.When helicopter to dip water. your seedlings are small you can devise some sort of ❑ Construct and/or maintain fire breaks along public a tree cover like a five-gallon bucket or a piece of roads that abut and/or pass through your property. stove pipe or piece of plastic pipe you can slide over ❑ Prune trees around structures and along natural fire your seedling while you spray around it.Your breaks such as roads to slow or stop the fire, and seedling protection needs to be large enough in keep it on the ground and out of your tree crowns. diameter to avoid applying herbicide with the wet- ted base of your protection as you place it over your ❑ Dry your firewood away from your dwelling and out- seedling. buildings during fire season. Move it close to your place of use after fire season is over. ❑ Permits:You probably need a permit to apply herbi-

6 . NORTHWEST WOODLANDS . SPRING 2012 u Who Am I? ❑ Late Summer ‘Tis the Season to do stream crossing ❑ I do most of my work at night. work:There is grant money for replacing existing crossings with fish-friendly crossings. Getting one of My four paws have flexible toes and my front ones ❑ these grants could save you a lot of money rather are particularly helpful. than waiting until you need to replace your structure ❑ I can open a door. and footing 100 percent of the bill. A good place to ❑ I am most often seen dead on the side of the road or start is with your local watershed council. dumpster diving. ❑ I wear a black mask around my eyes and have black u Words rings on my tail. ❑ Thermal Refuge—Fish know where this is.The water ❑ I am possibly the most omnivoral omnivore. temperature is cooler here and the fish move to this location when the water temperature in much of You frequently see my scat around water. ❑ their normal habitat is too warm. Do you have one? I ❑ I am normally born in a den high in a tree hole, so I heard Hobo Data Loggers are a good product if you am a good climber and can descend head first or tail are interested in measuring water temperature. I saw first. one model in the Ben Meadows catalog. I searched ❑ According to the Nature Program on PBS, I am much Hobo Data Loggers and found them at www.onset- more plentiful inside of Toronto than in the sur- comp.com.You need to then pick browse data log- rounding countryside. gers, water and water temperature. ❑ The Beatles called me Rocky,Walt Disney calls me ❑ OWC—Oregon Woodland Cooperative.You can take Meeko, my storybook name is Rascal, and you may a peek at what they are up to at www.oregonwood- have called me something less endearing if you landcooperative.com.Their bundled firewood pro- caught me in your garbage or your vegetable gar- gram is booming in the Portland metro area.They den. are looking for more members and member partici- pation in this program. If you have kids and/or JULY grandkids that need to earn cash for things they want to purchase, this program could be for you. Trees from precommercial thinning of your young u Road Work stands make good firewood for this program. Good time to build a new road and/or reconstruct an ❑ Contact Neil Schroeder at 503-628-2344 or existing road while there is still some moisture in [email protected]. your soil.

❑ Rock your roads with a traction coat for personal use Who Am I?

on lotor on y c o r P on, o acc or enough to handle winter logging. R A ❑ Replace and/or add culverts and water bars. Down on the Tree Farm is edited by David Bateman with help from Linn County Small Woodlands members Aaron White, Joe Holmberg, Jonathon Christie, Roy Stutzman, Steve Kohl, Neal Bell, and Jim Merzenich.This column is a project of the Linn County Small Woodlands Association and the OSU Extension Master Woodland Managers. Suggestions always welcome; send to Dave Bateman at [email protected].

NORTHWEST WOODLANDS . SPRING 2012 . 7 Global Forest Products Markets: Impacts on Family Forest Owners S E L W O

By CHRIS KNOWLES AND of forest products falling well below N K

S I R

ERIC HANSEN peak levels of the mid 2000s. Not only H C

F O did this impact firms in the U.S., it Y S E T he global forest also impacted firms in other countries R U O C

industry has that were historically major suppliers O T O H T experienced sig- of structural building products for the P nificant changes in U.S. housing market. On a positive Chips at a Stora Enso paper mill in recent years due note, demand for many forest products Sweden. largely to a combina- is increasing in many major markets. way out of the recession, Europe is tion of the recent According the UNECE/FAO Forest teetering on the edge of a second economic downturn, Chris Knowles Products Market Annual Review, recession. The 17 countries operating environmental legis- 2010-2011, harvest levels in 2010 on the Euro, commonly known as the lation, environmental were eight percent higher than 2009 Eurozone, have been struggling to disasters, and growth across the UNECE (United Nations deal with extremely high levels of in developing coun- Economic Commission for Europe) debt, including Greece, Ireland, tries. These combined region, but still more than 15 percent Portugal, and Spain. An ongoing factors have resulted below harvest levels from 2006. While debate among member countries on in dramatic shifts in the 2010 harvest was the second high- the right approach to dealing with the demand for North Eric Hansen est in the past decade in Europe, it was debt crisis continues. To date, there American forest products. This article the second lowest in the past decade in have been several large-scale bailout discusses each of these factors indi- North America and approximately 30 programs issued, with the latest a vidually and outlines how these fac- percent lower than 2006. A full recov- €130 billion rescue to Greece. While tors may impact Pacific Northwest ery of forest harvest in North America this will help Greece solve its debt cri- woodland owners. will require a recovery of the U.S. sis, many economists think that the housing market. While positive signs The Great Recession debt situation is still unsustainable have been seen over the last six and there is still the possibility that We are all aware of the impact the months, most economists expect a Greece will be forced out of the recession has had on the forest prod- slow recovery with housing starts Eurozone. The uncertainty caused by ucts industry in the United States. The reaching “normal” levels as late as this situation has caused significant downturn in the U.S. housing market 2015. fluctuation in the value of the Euro resulted in log harvest and production While the U.S. is slowly digging its relative to the dollar over the last year and the volatility will likely continue until a long-term solution to the debt problem is reached. Environmental legislation Concern over and trade of illegal wood products has been increasing for years. By some estimates, 8-10 percent of timber trad- ed globally originates from illegal N

E sources. The downward pressure on S N A

H prices that this causes resulted in a

C I R E coalition of industry and non- F O

Y

S governmental agencies proposing an E T R U

O amendment to the United States C

O T Lacey Act in 2008. The amendment O H P creates significant penalties for bring- A mobile chipping operation in Sweden.

8 . NORTHWEST WOODLANDS . SPRING 2012 importers and foreign-based exporters to know the source of the wood they are buying and selling. As part of its Kyoto Protocol commitments, the EU adopted an integrated approach to energy and climate policy known as the EU 20-20-20 targets. These targets require the EU to reduce greenhouse gas emissions to 20 percent below 1990 levels, increase consumption of ener- N E S

N gy from renewable sources to 20 per- A H

C I cent, and reduce primary energy use R E

F O

by 20 percent by the year 2020. Y S E T

R These targets have resulted in high U O C levels of adoption of woody O T O

H energy-based systems in many EU P Lumber packs at a Chinese wood treating plant. countries. As a result, wood pellet production has increased dramatically ing illegally harvested wood and wood The FLEG-T policies are designed to not only in the EU but also in other products into the U.S. The European enhance the laws of countries where parts of the world including the Union (EU) has its own way of com- illegal logging is a concern. While the United States and Canada. The bating illegal logging through its Lacey Act and FLEG-T take different increased production of Forest Law Enforcement Governance approaches to minimize illegal log- and Trade (FLEG-T) action plan. ging, they both place a burden on –Continued on next page– The Building Blocks of Owl Conservation in Washington State — 12.9 million acres of Federal, State, Tribal and Private Forestland

1. The Endangered Species Act protects all owls from “harm or harassment.” 2. Federal guidance calls for 2,600-5,900 acres of forestland set-aside per owl pair. 3. State forestry rules add additional owl protection in strategic areas. 4. State and private voluntary conservation plans (CP) contribute to owl protection. WA Owl Conservation Lands Landowner Acres Federal Government 9,213,026 State & Private CPs 2,118,944 State rules (net) 824,584 Tribal lands 515,372 Land exchange/other 165,605 — Clinton’s NW Forest Plan Boundary (3 state total=24.5 mm acres) TOTAL ACRES 12,837,531

— Federal, state, private forestland w/owl conservation mechanisms Sources: Joint Presentation: Forest Practices Board, 8/05 — Tribal lands contribute to owl conservation USFWS: Status of CPs in Washington, 6/10 www.northernspottedowl.org

NORTHWEST WOODLANDS . SPRING 2012 . 9 pellets has resulted in new markets for long-run, the need for materials for other global markets have seen high wood residue materials. There is con- rebuilding areas destroyed in this dis- levels of growth. The most dramatic cern that there will be strong competi- aster will provide demand for wood, a has been the market in China where tion for these raw materials with com- traditional building material in Japan. growth in wood products markets in posite board manufacturers when the The mountain pine beetle epidemic China has been spurred by economic U.S. housing market recovers. This in Canada has caused concerns over stimulus programs with a focus on was experienced briefly with the intro- the long-term viability of the forest infrastructure development. Particu- duction of a tax credit for woody bio- industry in western Canada. According larly important has been expansion mass material issued through the to Russell Taylor and Associates, the of the high-speed rail network, with Biomass Crop Assistance Program mountain pine beetle has devastated the goal of extending the network to (BCAP) during 2010. The BCAP was 16.3 million hectares of land in British the country’s interior. Infrastructure intended to provide incentives to uti- Columbia in 2009. Drastic measures projects have fueled massive demand lize wood debris materials that were have been taken to combat the beetle, for wood products in the country, otherwise not being utilized (i.e., log- including an intensive harvesting pro- with the bulk of this wood being ging residues); however, as originally gram. This intensive harvesting pro- used for concrete formwork. written, the program allowed for gram has caused fears by many indus- Housing development in China is credits to be received for wood try experts that western Canada will be another important part of the pic- residues traditionally utilized by left with large areas of of the ture. In 2011 China had a goal of 10 composite board manufacturers. This same age, resulting in future periods million housing starts. Many expect resulted in many complaints about where supply of raw materials for mills that this level is unsustainable. As an the BCAP program and it has since will be limited over the next several example, the government has devel- been restructured. decades. Regardless of the longer-term oped entire new towns, partially to impacts, the short-term result is that facilitate urbanization and partially Environmental disasters annual allowable cut in British to boost growth to comply with Environmental disasters including Columbia will be reduced by 20-30 GDP targets. However, speculation the tsunami in Japan and the moun- percent (Russell Taylor and Associates) has driven the price of real estate so tain pine beetle in Canada have had at approximately the same time as U.S. high that the average citizen cannot major impacts on international mar- markets are expected to pick up, afford to purchase property in many kets for forest products. Estimates potentially contributing to a supply of these towns resulting in very low show that the tsunami in Japan caused shortage. occupation rates. The term “ghost damage in excess of $300 billion. towns of China” has been coined to Growth in developing regions While the Japanese have plans for describe these developments. Another rebuilding, it is not yet clear how and While markets for wood products side effect of this growth has been when the rebuilding will occur. In the have seen steep declines in the U.S., investments made by real estate spec- ulators betting that real estate values will be driven up as these towns are settled. However, the towns are not STEAM LOGGING SHOW being settled to full capacity and at Pomeroy Living History Farm there is now major concern over a housing bubble, larger than the bub- Saturday, June 9 • 10 am-5 pm • Enjoy a complimentary hayride to the logging ble experienced in the U.S. in the Sunday, June 10 • 1-5 pm site where an array of historic logging equipment will be in use. mid-2000s that is destined to burst. Come see the only steam logging • Our 1920s farm site is open for touring including Some economists predict that the show in the U.S. featuring two the historic log house and blacksmith shop. burst of this housing bubble will operating steam donkeys. • The Farm Pavilion will feature hot dogs, polish result in real estate prices falling by dogs, baked potatoes, snacks, and hot & cold beverages will be available during the weekend. more than 50 percent. Chinese demand led to dramatic growth in exports of logs and lumber from the west coast of North America during 2011. However, exports have slowed recently, partially due to the 20902 NE Lucia Falls Rd., Yacolt, WA Chinese New Year and partially due 360-686-3537 to a slowing of growth in China. The ADMISSION: Adults $6.00 • ages 3-11 $4.00 www.pomeroyfarm.org 2 & under FREE rapid growth in China has led to con- cerns over inflation and the Chinese

10 . NORTHWEST WOODLANDS . SPRING 2012 people have been feeling the impacts. exports to India in 2011 were over six CHRIS KNOWLES is assistant professor, In July 2011, the consumer price times those of 2010. This demand Oregon Wood Innovation Center, index reached a 37-month high of 6.5 should contribute to a strong log mar- Wood Science and Engineering, percent. While China’s economy is ket for woodland owners. Finally, Oregon State University, Corvallis. He still showing rapid growth, many energy policies have already impacted can be reached at 541-737-1438 or economists predict that the growth demand and competition for wood [email protected]. ERIC will have to slow in order to ease raw materials. Future decisions HANSEN is professor and interim inflation pressures. A slowdown in regarding these policies could have department head, Wood Science and growth will result in wood products significant impacts on log markets, Engineering, also at Oregon State. He markets in China leveling off and has thus impacting woodland owners. ■ can be reached at 541-737-4240 or the potential to cause them to decline. [email protected]. While the prospects for wood products in China may be cooling off in the near future, the prospects are looking up in other emerging mar- kets including India and Brazil. India recently reduced tariffs on imported sawn softwood products, opening up the market to competition from imported products. This resulted in India being one of the fastest growing markets for softwood imports. A strong Brazilian real is largely respon- sible for significant changes in Brazil. The strong real vs. the U.S. dollar has TIME resulted in a reduction of U.S. imports from Brazil and an increase in U.S. exports to Brazil. FOR Bottom line for woodland owners A LITTLE Chinese demand in 2011 was a bright spot for west coast woodland owners. The future for woodland owners in the U.S. Pacific Northwest looks bright. While we are still in for PAYBACK a few more years of depressed domestic markets for wood products, This just might be the best example of “what goes around comes around” it is clear that domestic markets will you’ll ever see. Northwest Farm Credit Services is a cooperative, which recover to strong levels. What isn’t totally clear is how supply will means you have a voice within the organization and we pay cash back to respond to the renewed domestic you. No bank does this. When we do well, we share pro ts with you, not demand. Reduced harvest in British third party investors. And this year Northwest FCS customer-owners will Columbia will constrain supply from receive their largest checks ever. Getting a little payback never felt so good. that region. In addition, with the poor U.S. market, many Canadian suppliers have aggressively developed markets elsewhere. To what extent they will bounce back to the tradi- tional U.S. market is questionable. Some firms may choose to maintain their market presence in China rather than jumping back to U.S. markets. farm-credit.com | 800.743.2125 Other developing countries of the world represent growing demand. For example, U.S. softwood lumber

NORTHWEST WOODLANDS . SPRING 2012 . 11 Deciphering Forest Products Market Trends in Washington, Oregon, Montana and Idaho

By XIAOPING ZHOU AND RACHEL WHITE

sk an econo- mist what A recent tumul- tuous changes in the forest products mar- kets mean for family forest owners and they all say the same Xiaoping Zhou thing: “It’s compli- cated.” With the I C A R I

financial crisis that M O T began in 2008 and F O

Y the subsequent col- S E T R U

lapse of the housing O C

O market, demand for T O H forest products in the Rachel White P domestic market has witnessed a Log exports to China from Oregon and Washington more than doubled from 2010 to 2011. deep decline. In fact, 2009 saw U.S. housing starts sink to their lowest China’s hunger to build and 2011 from the west coast (north- annual total since World War II. While the U.S. housing market ern California, Oregon, Washington, During this period, timber harvest, struggles to regain footing, China has and Alaska). lumber production, and forest sector been in the middle of a building Japan had been the largest log employment took a hit across the boom, spurred by the Chinese govern- importer from the west coast until Pacific Northwest. ment’s efforts to build affordable hous- 2009. Japan and Canada had also However, in the past few years ing. To supply the wood necessary for been major lumber importers from the log export market to China has new construction, China had previous- the west coast. But China has now grown considerably, which could ly relied heavily on logs from Russia. taken the lead as largest importer of change the face of the forest products But in 2007, Russia announced a sig- both logs and lumber from the west industry in the region, for better or nificant increase in log export tariffs to coast as well as the U.S. at large. See for worse. The recent rise in exports encourage milling of logs to lumber Figures 1a and 1b. has raised concerns about timber sup- within its borders. To escape this extra Much of the impact of China’s ply for domestic production, for one cost, China began seeking logs from demand for raw materials has been thing. But on the other hand, the the U.S., resulting in a record one-year felt in the Pacific Northwest. In 2011, export market has increased returns increase of log exports between 2010 55 percent of the total U.S. log exports to private timberland owners. While everyone waits for the Figure 1a. 2011 WA/OR Log Export Figure 1b. 2011 WA/OR Lumber Export domestic lumber market to recover Distribution (percent) Distribution (percent) from the housing crash in the coming years, small woodland owners may want to pay attention to global mar- ket trends and the opportunities they present, as well as the impact these trends have on harvest levels, lumber production, and employment in the forest products industry. SOURCE: PNW Research Station

12 . NORTHWEST WOODLANDS . SPRING 2012 were through the ports of Figure 2. Softwood Lumber Production by each state for the last decade. Washington and Oregon More than 75 percent of the alone. For lumber, Oregon removals and 62 percent of Oregon and Washington the Idaho removals were from private supplied 30 percent of timberland owners. Between 2007 the total exported by the and 2010, the proportion of private U.S. Increasing ship- harvests decreased from 82 percent ments to China were the to 60 percent in Washington, and major driver of this log from 71 percent to 46 percent in and lumber exports hike Montana. from the west coast dur- Community impacts: Employment ing the last two years. and forest industry health What was the value of SOURCE: PNW Research Station these exports? In 2011, the total log The stagnant domestic market has Roy Anderson from the Beck export to China through Washington hurt mills in the region. As one Group in Portland studies market and Oregon brought in $696 million example, Steve Swanson, president of trends in the forest products industry. (from about 1.04 billion board feet). the Swanson Group, said they are He sees shades of gray in the com- Lumber exported to China from temporarily closing their Glendale, peting forces of offshore log demand these two states amounted to about Ore., . Supply is down locally and a sluggish domestic lumber mar- $219 million in 2011 (361 million as logs are being exported. “We were ket. “For the small woodland owner, board feet). unable to build up enough inventory you can sell logs for pretty good Many expect offshore demand for to last us through the winter,” said money as exports in the short run,” logs to remain strong, but the out- Swanson. “We are literally going to he said. “But need to buy look is never completely clear. In run out of logs.” locally. The export markets are rais- mid-December, Russia was formally Although it may be a while before ing the price of logs for local mills, admitted to the World Trade the situation improves significantly, hurting their long-term sustainability. Organization and is expected to rati- softwood lumber production did They’re going out of business.” fy the agreement in June 2012. There show slight increases in 2010. Oregon The number of mills has fallen is speculation that as a full WTO produced 4.0 billion board feet in faster than lumber production. Data member, Russia will lower its export 2010, and Washington produced 3.6 from the Western Wood Products taxes on logs, which will likely create billion board feet. Montana pro- Association (WWPA) shows the further ripples in the dynamics of the duced 0.5 billion board feet in 2010, number of lumber producing sawmills China-U.S. log trade. which was about half of the produc- in the western region (including coast, tion in 2005, and Idaho produced inland and California redwood) Slow growth in softwood lumber over 1.2 billion board feet in 2010 decreasing about 45 percent from 278 sector (See Figure2.). in 2000 to 154 in 2010. The smaller- One of the biggest impacts of the sized mills (less than 100 million slump in residential construction in Where is the harvest coming from? board feet per year) decreased 49 per- the U.S. has been the adverse effect Harvest levels from private forest- cent, while sawmills with capacity on softwood lumber production. land have generally echoed the eco- over 100 million board feet decreased From a peak year in 2005, softwood nomic recession, decreasing steadily –Continued on next page– lumber production decreased 37 per- since 2008. But in each of the four cent for Washington, 46 percent for states of Oregon, Figure 3. Timber Harvest by States Oregon, 38 percent for Idaho, and 50 Washington, Montana, percent for Montana. Washington and Idaho, private forest and Oregon are the primary states landowners (including for softwood lumber production, industrial, non-industri- making up over 30 percent of the al, and tribal) are the pri- total U.S. production. Most of this mary sources of timber. lumber—around 90 percent—comes Most of the harvests from west of the Cascades in these from these four states two states. By comparison, Montana were from Washington and Idaho account for seven to eight and Oregon (12 percent percent of the nation’s total soft- of the U.S. total). Figure wood lumber production. 3 shows the total harvest SOURCE: PNW Research Station

NORTHWEST WOODLANDS . SPRING 2012 . 13 about 36 percent. The implication is decreased 47 percent during the last Oregon had the lowest stumpage val- that production is being concentrated decade for both Washington and ues. Montana and Idaho shared in fewer large mills located in urban Oregon, and over 60 percent for about the same price level during the areas near major transportation Montana and Idaho. Table 1 shows last decade except the year of 2009 routes. the total employment in the forest when Montana saw only half of the Employment in the forest products products industry including lumber Idaho’s stumpage price. industry is down as well, in part and wood products, paper, and allied A price rebound in the Pacific because of decreased lumber produc- products. Around 80 percent of total Northwest began in 2010, most likely tion but also due to the use of more employment is in the lumber and because of the growing prominence efficient processing technology. The wood products sector. of the export markets in China. number of people employed in the forest products industry has Table 1. Employment in forest products industries (thousand persons)

“Prices may vary” In summary Stumpage prices vary significantly Timber markets are highly com- over time, seasons, and regions, and petitive and change is volatile and according to tree species, size, and relentless. What do all these fluctua- quality. The prices reported here tions mean for a family forest owner? come from public land (state and Many will have long stretches federal), but can be used by all own- between harvests, some will only har- ers as indicators of timber values. In vest once in their lifetime. As the for- general, the stumpage price has been est products industry changes to much higher on state-owned forest- meet export demands and ride out a land than on Forest Service land. stalled domestic market, small wood- Figure 4 shows the average stumpage land owners looking to sell timber value for all public land including have to find the right niche. federal and state-owned forestland. Ray Jones, vice president of In Oregon and Washington, the resources at Stimson Lumber, a most valuable stumpage has come Portland-based forest products com- from the westside of these states pany, says the more markets for because the wetter climate yields tree landowners to sell to, the better. “We species that command Figure 4. Average Stumpage Price on Public Land better prices. Western Washington had the high- est stumpage prices overall owing to the high quality of wood on state-owned forestland there. By con- WA_East WA_West OR_East OR_West Montana Idaho trast, eastern SOURCE: PNW Research Station

14 . NORTHWEST WOODLANDS . SPRING 2012 are big believers trees might consider waiting 10 years, in the free mar- thinning, and capturing that export ket,” he said. premium down the line. “For a small That is, if the markets haven’t woodland owner, completely changed 10 years from having choices is now. Cautious optimism that there a good thing. will always be some sort of market for Right now with wood and other products seems to be the growing a safe bet, but remembering that “it’s trend of exports complicated” doesn’t hurt. ■ to China and a IAOPING HOU steady take in I X Z is a research econo- C A R I Japan, people mist with the Goods, Services and M O T

have choices F Values Program, and RACHEL WHITE O

Y S based on what E is Science writer editor, both with T R U they have on O Portland Forestry Sciences Lab, C

O T their land and O PNW Research Station, USDA H based on current P Forest Service, in Portland. Xiaoping Domestic demand for lumber dropped precipitously during the eco- demand.” nomic downturn, leaving sawmills in a tough position. Zhou can be reached at 503-808-2017 In the end, or [email protected]. Rachel White whatever the source est management practices that lead to can be reached at 503-808-2082 or of demand, the opportunity for higher quality export logs. For exam- [email protected]. The authors increased financial returns to private ple, if the export market is bringing wish to acknowledge special thanks to timberland owners helps keep land good prices for bigger, better quality Richard Haynes for reviewing drafts prices up and increases interest in for- wood, a landowner with 35-year old of this article.

NORTHWEST WOODLANDS . SPRING 2012 . 15 Conk rot, stump rot, and other defects should be left at the landing. What You Should Know About Selling logs with 15-25 percent defect is, of course, inefficient and may lead the Log Export Market to cancellation of a log purchase order. Don’t try to “slip something” By MICKEY BELLMAN similar in price. into a load because it will later be Log lengths are of critical impor- discovered at the port. n 1853 Andrew tance. Companies may purchase 26- Several companies have inland log Pope and 40 foot logs, but there are specified, sorting yards in addition to their I Frederick Talbot preferred lengths. A 32-foot log may sailed into Puget be desirable for a local sawmill, but a Sound and erected a 33-foot log may be required for sawmill at Port export. A 40-foot log is desirable, Gamble, Wash. Their except when a company ships logs in fleet of sailing ships was soon deliv- a container—then a 39-foot log is ering lumber to California, Hawaii, required. and ultimately to ports across the Depending upon the export com- Pacific Ocean. The straight-grained pany, small-end diameters are criti-

Douglas-fir whetted the world’s cal, too. Perhaps it is a G Sort, or a G N I D appetite for Pacific Northwest wood G+ Sort, or a J sort, or a C sort. One A R T

R E

products, and that demand continues sort may be simply an eight-inch and B M I T

to grow today. larger log, while another sort requires N E E H only 9-11 inches, or all 12 inches and S

From Coos Bay to Port Angeles, U S

F O privately-owned logs are delivered larger. A timber owner must thor- Y S E T dockside and loaded onto ships oughly understand each sort require- R U O C bound for China, Japan, and Korea. ment before he loads a truck. Some O T O H

Export log buyers are eager to buy large timber companies may have 8- P all species and sizes of logs. Douglas- 10 different log sorts based upon These logs were rejected for the export fir, hemlock, spruce, even lodgepole species, diameter, and log length. market for excessively large knots, sweep, pine and larch, are purchased for Bigger is not necessarily better. knotty tree tops, and small diameter. overseas delivery. But seller beware: Most export logs are now debarked Not all export companies purchase before loading aboard ship. Some dock facilities. A timber owner may all species or log grades. Before you “ring debarkers” cannot process logs deliver all logs to a sort yard where fire up the chainsaw, do some with butt diameters exceeding 30 the logs will be scaled and sorted. research and get references. inches. A timber owner may have to Delivered prices may be slightly lower Log prices can range from $300 “long butt” his logs or even cut a than at the port, but often there is the to $700 per thousand board feet short 12-foot log off the butt to meet convenience and lower transportation depending upon log quality. Knot this restriction. costs for the timber owner. size and ring count will deter- Export companies prefer to deal mine log price. The much tout- in large, ship-filling quantities, but as ed “J Sort” for Japan requires much as 30 percent of their logs are small, well-scattered knots with purchased from small woodland no defect and at least six rings owners. Whether five loads or 50 per inch. Logs sold to China loads, log buyers are searching for may have larger knots because specific logs to fill cargo holds. N A All of which means a timber M

the lumber may be used for L L E B owner must do some research. Talk construction purposes. Once Y E K C I with other timber owners about their upon a time there was a sub- M

F O first-hand experiences. Local loggers Y

stantial price difference between S E T

R can offer insight also. A private Douglas-fir and white wood, U O C

O forestry consultant may have many but the China market has T O H changed that. Today, hemlock, P contacts. For a fee, a consultant can white fir, and Douglas-fir are This log would be rejected for the export market manage the entire operation—from due to rot and excessive knot size. finding the best market and oversee-

16 . NORTHWEST WOODLANDS . SPRING 2012 ing the logging to final distribution of the log payments. Once you have decided on one or more export companies, contact the log buyer, but remember he is a busy man covering a large area. He will quickly tell you if the timber meets his specifications, and he may even recommend a good logger. Once you accept an offer and receive a log pur- chase order, read it carefully and adhere closely to all requirements. If G N you have contacted several log buy- I D A R T ers, it is good business courtesy to R E B M notify them you have accepted I T

N E another offer. E H S U S One word of caution: Do not F O

Y expect a local sawmill to readily buy S E T R U

those logs that are not sold as export. O C

O Local mills require good quality logs T O H and cannot pay top dollar for only P the export falldown. Seriously con- Logs are loaded at the Port of Port Angeles and shipped to China. sider if the export sorting and haul- on the ends of many logs. Only logs and Susheen Timber Trading Inc., ing costs justify bypassing a local owned by private landowners and pri- 253-661-1920. ■ mill that you may sell logs to in the vate companies can be exported. The future. law even prohibits sawmills from buy- MICKEY BELLMAN is a private forestry Selling logs into the export market ing federal logs while they export logs consultant and timber cruiser working can be highly profitable, but it must grown on their own tree farms: this is throughout Oregon and Washington. also be done carefully. A few missort- referred to as “substitution.” He lives in Salem with his wife, two ed logs may quickly erase the extra In researching this article, three golden retrievers and 3,500 Christmas profit that was anticipated. The mar- companies were contacted: Pacific trees. He can be reached at 503-362- kets are seasonal and do fluctuate. Lumber and Shipping, 360-425-5861; 0842 or [email protected]. There are times when the demand Giustina Resources, 541-485-1500; slackens and prices plummet, but that is the law of supply and demand. As a sidenote, logs from Forest Service, Bureau of Land Management, and states of Oregon and Washington timber sales may not be legally SUPPORT exported. That is why you may see RESPONSIBLE yellow, red, or orange paint splashed FORESTRY. Susheen (Seattle) TIMBER TRADING INC. When you consider that only 10% of the world’s forests are certified, we have Exporting logs to China since 1992 a long way to go. The good news is that there are a number of credible forest certification programs. And each one, including SFI, encourages responsible forestry. Fax: 253-661-1930 For more on forest certification and what you can do, visit www.sfiprogram.org. Email: [email protected]

31811 Pacific Hwy. S., Suite B-321 Federal Way, WA 98003

NORTHWEST WOODLANDS . SPRING 2012 . 17 misrepresent their information in an effort to procure the logging rights, Caveats When Marketing Logs which is where the real money can be captured from the woodland owner. By STEVE BOWERS and when to sell it, and doing it with- What: Differentiate between market out seeking assistance. The list is huge, activity and market strength. elling logs and but here are a few particularly perti- Why? Information from landowners, timber can be nent points to ponder before “pulling loggers, and consulting foresters may an intimidating the trigger” on that timber sale. S give an indication of logging activity, process for individuals What: “Cruise” does not necessarily but not necessarily market strength. with little or no mer- correlate to “cut out.” How many times have you been chandising experience. Why? Usually, woodland owners induced into action because your The number of predicate their harvest based on an neighbor was doing something? options can be staggering when con- estimated monetary value. Because Adjacent landowners may not accu- sidering the type of market (poles, most landowners harvest timber for rately reflect market strength as there domestic, export, etc.) log specifica- financial gain, beware of individuals may be occasions to equivocate, plac- tions required in those markets (myri- that are willing to cruise an owner’s ing them in the “best light.” Loggers ad length and diameter options), and timber if they can retain the option to are more than glad to see you sell logging and hauling cost considera- harvest if the landowner decides to your timber: it correlates into more tions for each market’s specifications cut their trees. There is an incentive to business for them. Consultants reflect and destination points. The ultimate overestimate the timber volume in an activity in the market, not necessarily marketing faux pau is a woodland effort to persuade the landowner to strong prices for the woodland owner entering the merchandising harvest. If the option to harvest is owner’s timber. If a seller desires log arena not knowing how much or what being considered, be sure there is no and/or timber prices, contact several kind of wood they have to sell, where conflict of interest for the cruiser to buyers and obtain information on prices today, yesterday, last month, last year, and possibly a few years in the past. Obtain information from publications that specialize in forest products marketing. What: Investigate the market to Buying Douglas Fir and Red Cedar Poles determine a bearish or bullish trend. Why? Log prices are determined not only by the current market, but also anticipation of future market values. Prices reflect the projected future sup- ply and demand of the log market; more if it is deemed to be increasing and less if it is believed to be contract- ing. There is a psychology involved A professional staff providing the most productive way when a log buyer is negotiating a deal. of bringing your Poles to market. If log buyers believe the market will remain strong, they will occasionally Services include: hedge their offers in an effort to pro- • Pole marking • Facilitate access to certified cure the sale under the assumption • Quality control Pole Loggers and Haulers that prices will continue to rise. The during harvest Buying Douglas Fir and opposite strategy occurs if a seller • Free estimates Red Cedar Poles waits until the market has peaked and prices begin to decline. The hedging of Area Resource Managers offers will be toward lower prices and Washington ...... Mark Wentzel 253-677-5115 a declining market. In other words, if Oregon ...... Carl Harrison 541-729-2403 prices were equal a month prior, and Idaho ...... Fred Omodt 208-263-2141 a month after the market peak, wood- You can also visit us at www.ldm.com land owners will receive more money

18 . NORTHWEST WOODLANDS . SPRING 2012 by selling before the market peaked domestic logs have and correspondingly less after the a list of specifica- market begins to decline. Remember tions stipulated by the axiom: pigs get fat; hogs get the Official Rules S R E butchered. Handbook. A W O B

E

strong or weak V E T

What: No timber tracts are the same. S

market may alter F O

Why? Because wood is a growing bio- Y S E

the price being T R logical element, there are differences U O C

paid for a particu- O

in the characteristics of each tree and T O

lar grade of log, H each stand of timber. Astute log buy- P but the require- ers recognize some of the subtle dif- Western Oregon harvest designated export or higher value ments of that ferences in wood quality and the domestic buyer. grade do not derived products from the mill they change. Export prices respond to from operating at maximum efficien- represent. There is probably a justifi- changes in supply and demand cy. Terms such as “falldown,” “break- able reason if someone in the adjacent through price adjustments, and on out,” or “off species” are indications vicinity is being paid a different price occasion, the description of individual that the seller is going to be financial- for their timber than someone else sorts. In a strong market a log may be ly penalized for selling their logs to dealing with the same buyer. Land- “bumped up” to a higher value sort, the “wrong” buyer. Logs that do not owners may incorrectly harbor ill will and a declining market may result in meet the specifications of the buyer toward the log buyer because of mis- the same log being “knocked down” will be re-merchandised to companies understood or misquoted information in order to be merchandised as that can better utilize the material. obtained from another landowner export. There are no standard rules There is a cost associated with han- that sold their logs to the same com- governing export log qualities, requir- dling and transportation of these logs, pany. Log buyers may be confronted ing the seller to administer additional along with a possible profit margin by a skeptical and circumspect seller. caution when merchandising their allocated to these activities. By selling Negotiations with the buyer should be logs through this venue. to the “wrong” mill, the seller does based on the merits of each individual not realize full value for their logs, sale and not predicated on informa- What: It is imperative that the seller’s and that money winds up in the pock- tion derived from another individual, logs meet the intended specifications of ets of the merchandiser rather than regardless of the situation. the buyer. the landowner. Why? Buyers penalize sellers for logs What: Export grade logs do not have –Continued on next page– whose characteristics prohibit the mill to be “perfect.” Why? The availability of clear, tight grain, high-grade Douglas-fir sawlogs is becoming more difficult to procure. Today, nearly all domestic sawmills Seedling Nursery Since 1974 are utilizing larger volumes of lower quality material than in the past. The We bring experience with owners that care about their product and customers. same can be said for exports. Overseas buyers realize their demand for logs Approximately 10 million seedlings in annual production cannot be satisfied if they continue to 1 container site (plugs), 2 bareroot/transplant sites (p+1, 1+1) require the same type of material Contract growing and spec seedlings for forestry and Christmas tree production obtained in the past. With overall log quality on a general decline, private LET US GROW YOUR SEEDLINGS woodland owners have seen more of their wood become “export quality,” David Gerdes Mike Gerdes thus a merchandising option available [email protected] to some landowners that did not exist in the past. FORESTERS • NURSERYMAN • SEEDSMAN What: The quality of log necessary for a particular export sort varies by SILVASEED COMPANY market demand. P.O. Box 118 • Roy,WA 98580 • (253) 843-2246 Why? To meet a particular log grade, “Serving Many of the Needs of the World From This Location Since 1889”

NORTHWEST WOODLANDS . SPRING 2012 . 19 What: Log aesthetics are extremely What: Camp run pertains to sawlog which brings us to the next topic. important in merchandising. grade and better quality material, What: Be sure log prices listed on the Why? This point cannot be overstated! otherwise known as “merch” logs. purchase order correspond to those An aesthetically appealing sawlog is Why? The widely accepted definition quoted by the log buyer. often worth more money than a poorly of camp run, meaning a single price Why? As Howard Cossell once said, prepared “ugly” one. You have a for all logs being sold, is somewhat “You certainly have an eye for the greater chance of recovering the full misleading. When a woodland owner obvious.” However, there have been value of the log when knots are cut sells logs on a camp run basis, they occasions when prices listed on a pur- flush with the bole, log ends cut clean are selling merchantable quality logs. chase order are different than those and straight, and harvesting defects Non-merchantable logs pertain to cull quoted by the buyer when they kept to a minimum. Eliminate “pigs material (utility cull, peeler cull, and inspected the seller’s logs. There are ears” (limbs not cut flush), “rushin’ special cull). Logs are sold on a camp several explanations for this occur- couplings” (ends of logs that have a run basis for several reasons, but one rence, usually because the buyer is split in them resulting from improper of them should not be because the processing so many contracts that bucking techniques), and excess dirt landowner believes they will be paid conversations get mixed-up with and debris. When the scaler examines a the same $/MBF for any grade of log. respective sellers: an honest mistake. log whose grade is “on the line,” it may When selling camp run, non-mer- Always check to see that the verbal receive the benefit of the doubt if it is chantable logs will have a different quote is the same as the written quote. clean, properly bucked, and limbed. price than merchantable logs, and This concept is even more important in those prices will be listed on the pur- What: Observe any information the export market. What do you do chase order. There are occasions regarding “special services” on the when you’re selling a car or a house? where landowners have signed and purchase order. You make the item as visually pleasing returned a purchase order without Why? Special services involve grading as possible: no different for logs. It studying its contents, basing that sig- and scaling procedures in addition to bears repeating: The importance of log nature on inaccurately interpreting those shown in the Official Rules aesthetics cannot be overemphasized! their correspondence with the buyer: Handbook. The special cull, peeler cull, wormy cull, #3 select mill, and scaling in multiples of two feet are all special services accepted by the Northwest Log Rules Advisory Group ( NLRAG) and used in many of the region’s sawmills. There are other special services that may not be as readily apparent. Depending on the timber stand, considerable volume may be affected by one of these rule changes. Always inspect a purchase order for possible inclusions of special services and their specifications. What: Don’t let the logger market your logs. Why? It is possible, but not probable, that the logging contractor may nego- tiate the highest price for your wood. Logging contractors are paid on a volume basis, be it by the MBF, per- centage, or the job. Their primary function is to move as much wood as possible in the shortest period of time. Production tends to trump $/MBF,

and their interests and abilities are

going to be focused accordingly. There are occasions where information on the selection of a logger was obtained

20 . NORTHWEST WOODLANDS . SPRING 2012 through the log buyer. Much of the attempts to mask log defects. In addi- strategy requires knowledge of the business for these loggers results from tion, scalers relay this information to production process (mills), the referrals from a particular log buyer the log buyer, which will oftentimes required raw material (logs), and find- representing a mill that desires a des- contact other buyers from different ing the best “fit” for the unique char- ignated set of lengths and diameters. companies alerting them to any chi- acteristics of each timber stand. The If utilizing one of these contractors, canery. When a seller attempts to wood products industry is a rapidly be sure to monitor the bucking deci- deceive and that deception comes to changing and volatile arena requiring sions to ensure maximizing the wood- light, it likely not only affects the cur- a comprehensive investigation of all land owner’s interests and not those rent buyer, but other perspective buy- available options. There is a financial of the mill. ers in the area. At this point the seller risk for any individual that thinks has compromised their integrity and they have a corner on information What: The scaler, not the log buyer, placed on the “black list.” and intelligence. The key: Keep an determines a log’s domestic grade or open mind. export sort. What: Visit the scale shack and ask Why? Price is the only definitive infor- This article is far from an exhaus- questions. mation a log buyer can relay to the tive list on the information pertaining Why? Make arrangements to visit the seller. While most buyers are adept at to merchandising logs. Most that have log yard and view the grading and distinguishing between individual log bought and sold wood over the past scaling process. Be sure to state the grades and sorts, and may even be few years continue to discover mis- experience is a learning process and certified scalers, they usually are not takes, hopefully learn from them, and ask questions in a polite and respect- the entity that assigns the quality code do better next time. The old saying, ful manner. When the scaler makes a designating a log’s value. An excep- “fool me once, shame on you; fool me deduction, inquire why it was made tion to the rule is when the seller twice, shame on me” is a well worth (type of defect) and the degree of agrees to a camp run offer, making remembering. Learn from mistakes, severity (volume deduction). You will individual grades irrelevant, providing realize that any subject matter is a most likely come away with a better the log is not a cull. A landowner can- continual learning process, and understanding of the grading and not “take it to the bank” on the remain open to advice and construc- scaling process, enabling you to make buyer’s statement that logs are a par- tive criticism. ■ better bucking decisions in the future, ticular grade or sort. Remember to and realize these individuals are doing distinguish between the role of a log STEVE BOWERS, aka Treeman, is an the best job possible. buyer and a log scaler: the job of the OSU Extension forester for Douglas former is to quote a price(s) while the What: Nobody knows it all. County in Roseburg. He can be reached job of the latter is to determine the Why? Marketing is an art as well as a at 541-672-4461 or steve.bowers@ grade(s) or sort(s) irrespective of science. A successful log marketing oregonstate.edu. price(s). Nothing more, nothing less. What: Log scalers and log buyers have good memories. Why? There is a long-standing compe- tition between woodland owners and log scalers: one attempts to maximize the value of a log and the other is scal- ing and grading that log according to a set of rules. A seller may continually leave inadequate trim in an attempt to increase scaling diameter(s), camou- flage defects, or employ improper bucking techniques such as pigs ears, rushin’ couplings and sloped/crooked end cuts. The scaler may begin to anticipate these practices and border- line decisions can go against the seller if the scaler believes there is intention- al deception. Remember, scalers have observed far more wood than most sellers, and they have “seen it all” in

NORTHWEST WOODLANDS . SPRING 2012 . 21 Tips to Consider Before Logging... How to Harvest Your Timber

BY REX STORM an owner may not be familiar with easement restrictions. details concerning logging methods Harvest and Reforestation ow to Choose for selling timber, timber accounta- Prescription. Designating which trees a Logger. bility, state forest regulations, refor- to cut or grow should be tailored to H Picking a estation, contracts, or market prices. the site, visibly-marked, and based on professional logging Develop a Management Plan. A a plan. The har- operator (logger or forest management plan should vest area and method are closely contractor) is one of include goals for timber growth, har- linked to the terrain, roads, water, the most important vest, reforestation, resource benefits, habitat, fire hazard, slash disposal, steps taken when harvesting a forest, protection and income—and ways to reforestation, and management plan. selling timber, and completing tree attain those goals. State forest regulations require planting. Landowners may want to Boundaries and Legal Restrictions. prompt reforestation after harvest. receive quotes from more than one Prior to any operation, all legal mat- Logging and Transportation Plans. logger before choosing the right con- ters and location of the forest prop- Carefully planned forest roads are a tractor for the job. erty and harvest area must be deter- valuable investment necessary to har- Work with a Forester. Many forest mined, described in writing, mapped vest, reforest, and manage a forest. landowners enlist the services of a and marked on-the-ground, includ- After harvest and planting is com- consulting forester to help manage ing: surveyed property lines, clear pleted, road management remains complex forestry operations because title to timber, and no mortgage or important to protect the landowner’s forestry investment. Timber Scale. It’s necessary to have the timber scaled/measured after harvest by a knowledgeable forester—to assure that the timber value is accurately measured, or “scaled,” for payment. Written Contract. A written con- tract is very important to describe the responsibilities of each party to conduct a forest operation. By put- ® ting agreements in writing, a contract WESTAR protects all parties: forest landowner, logging contractor, and timber pur- The Brightest Herbicide for chaser (mill). The logger rarely takes Herbaceous Weed Control title to timber/logs. Standing timber is real estate until it is cut. for Douglas-fir and other Conifers. Legal Requirements for Logging. —See your Wilbur-Ellis Pro for more details— Forest operations in the Northwest are regulated to assure environmental protection, fire prevention, and tax For information on this or any other herbicides, call: payment. In Oregon, prior to begin- Bruce Alber 503-227-3525–western Oregon & western Washington ning any commercial forestry opera- Joel Fields 509-928-4512–eastern Washington, Idaho & Montana tion, the landowner or operator must Carl Sostrom 509-928-4512–eastern Washington, Idaho & Montana file a notification with the local state Scott Johnson 916-991-4451 & Jerry Gallagher 530-570-5977–California forestry office. Always check with your state forestry department before beginning operations. ■ 9685 Ridder Rd. S.W., Suite 190 • Wilsonville, OR 97070 See next page for related article by Rex Storm

22 . NORTHWEST WOODLANDS . SPRING 2012 Questions before Harvesting Begins For forest landowners to ask a perspective logger or forestry consultant

forest landowner should exer- • Insured. Obtain certificates to ver- describes and locates on-the-ground cise as much care in choosing ify proof of coverage by workers road locations, log landings, and road A a logger or forestry consultant compensation and liability insurance. maintenance. as they would in choosing a painter • Site visit and map. Conduct an • Reforestation plan. This is required to paint your home, or a general con- on-site visit to agree upon and map by the state forest practices act. tractor to build a new home. It’s pru- the locations and specific terms for • Area clean-up. Have a post-opera- dent business practice to communi- planned activities. tion clean-up plan, which describes cate the planned forest harvest, refor- • Forest goals planned. Do you have satisfactory on-the-ground locations estation, and other operations prior a forest management plan, which for slash disposal, erosion control, to beginning work. Here are a few describes management goals and con- waste removal, road re-shaping, and questions a forest landowner may tracts, harvest, roads, reforestation, so forth? ask of their perspective logging con- resource protection, fire prevention, • Sub-contracting terms. How tractor or forestry consultant. scheduling, and so forth? would you ensure that subcontractors • Contractor reputation. How long • Logging plan. Is there a harvest- completed quality work? ■ have they been in business? Obtain a ing plan, which describes and locates list of references from landowners and on-the-ground the logging methods, REX STORM, Certified Forester, is mills. cut-tree selection, timber falling, skid- Forest Policy manager for Associated • Estimate of rates. Early in the ding pattern, site protection, equip- Oregon Loggers, Inc. based in Salem. consideration, can the contractor ment and utilization? He can be reached at 503-364-1330 or provide a quote for prices, cost of • Roading plan. A forest access plan [email protected]. their logging service/work plan, and income from timber harvest job? Once the contractor is chosen, can rates be written in a contract? • Written agreement. A written con- Northwest tract and map to address agreements for work conduct, work plans, meas- urement, payment, prices, completion, Hardwoods, Inc. timing, liability, taxes, regulations, and dispute resolution should be available. Sustainable Forestry Initiative

A full service Purchasing alder, maple and ash saw logs Natural Resource and pulp. Also hemlock saw logs and consulting firm since 1984 timber at the following locations:

➤ Estate Planning ➤ Reforestation ➤ Water Resources Arlington,WA (360) 435-8502 ➤ Log Marketing & Inventory ➤ Timber Appraisals ➤ Harvest Administration ➤ Fire/Fuels Management Centralia,WA (360) 736-2811 ➤ Forest Management Plans ➤ GPS/GIS Services www.consulting-foresters.com Longview,WA (360) 577-3887 HOME OFFICE (208) 883-4488 Eugene, OR (541) 689-2581 [email protected] EASTERN WASHINGTON Coos Bay, OR (541) 267-0419 (509) 276-4699 • [email protected] WESTERN MONTANA Garibaldi, OR (503) 322-3367 (406) 544-7169 • [email protected]

NORTHWEST WOODLANDS . SPRING 2012 . 23 Housing Outlook for 2012: Still Plenty of Trouble, but Modest Gains Forecast

anuary 6, 2012—A year ago, the U.S. housing outlook broke into J two camps. There was a mildly bullish one calling for 2011 to pro- duce a noticeable step to recovery, to N O I about 700,000 units. The other camp, T A I C O citing multiple issues that would S S A

D require more time to work through, O O W

saw little improvement. The skeptics D E R E E

got it right. Starts in 2011 are expect- N I G N E ed to finish close to 600,000 units, E H T

slightly ahead of 2010 total of — A P A

586,900 units. F O

Y S

The outlook for 2012 is much the E T R U same. While some progress has been O C

O T made in working through the many O H issues holding back residential hous- P ing construction—particularly single- Larger glob- family homes—there is still plenty al issues have standing in the way of a speedier major potential recovery. implications for It starts with weak job creation, the U.S. econo- but includes other key factors such as my, housing, the ongoing foreclosure morass, tight and the wood lending standards, and soft existing products indus- home prices that make it difficult for try. These builders’ new-home offerings to com- include the pete. Existing for-sale home invento- European debt ries, while recently showing improve- crisis and the ment, remain high. potential finan- cial contagion from a failure of the Eurozone and its common currency. Protect Your Trees – Protect Your Investment In addition, recent reports reveal that China has a bursting real estate bub- Wildlife Services ble, while Russia’s expected entry into Company, Inc. the WTO could pare Chinese lumber and log purchases from North 5227 Gifford Rd. SW • Olympia, WA 98512 ® America. The distraction and uncer- QUESTIONS? tainty of an expected contentious Phone: 1-360-352-6055 U.S. Patent No. 6,652,870 B2 U.S. presidential election merits reflection as well. URL: www.seadust.biz • NOW FOR MOLE CONTROL Contact: Dan L. Campbell While forecasters last year were off • Protect New Growth & Overwinter the mark in terms of the actual num- [email protected] • Treat Before or After Planting Brooke K. Campbell ber of housing starts, they did have it • Protect Western Redcedar right that housing would be growing [email protected] • Protect Riparian Plantings modestly into 2012. As the New Year CHECK gets under way, there is sense that Control of Rubbing Damage • Treat Vexar Tubes for Elk OUT: www.willowbuckrub.com –Continued on page 26–

24 . NORTHWEST WOODLANDS . SPRING 2012 LUCKY FOR YOU, CHOOSING A SAW IS THE HARD PART.

SIMPLIFYING DECISIONS SINCE 1947.

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Choosing Saw - NW Woodlands_Fall2011.indd 1 9/19/11 6:21 PM –Continued from page 24– scattered improvement in some mar- five analysts average 667,000 units kets have forecasters anticipating a (see table on page 24). That would pent-up demand is building. That modest increase in starts. represent a 12.1 percent gain over the plus house price stabilization and The forecasts of total starts from 595,000-unit projection for 2011. Another trend most forecasters have had right going back to last TREE MANAGEMENT PLUS, INC. year is growth in the share of multi- Working with family forest owners managing their woodlands since 1977 family construction. Many of the Professional Forester, Accredited Logger, Cut-to-Length Logging, Seedling Sales & Reforestation Services same issues that are holding back a recovery in single-family construction CONTACT Tom Fox at 360-978-4305 • 422 Tucker Rd., Toledo, WA 98591 drive forecasts for increased demand for multis—foreclosures, tougher CALENDAR mortgage qualification standards, and jobs. L.E.A.P. Program, May 1-3, Moscow, ID. Contact: University of Idaho Clearwater Office, 208-476-4434. Multifamily units represented about 20 percent of total starts in WSSAF Annual Meeting, May 2-4, Port Angeles, WA. Contact: John Walkowiak, 253-320- 5064, [email protected]. 2009 and 2010. The share jumped to 29 percent in 2011, and is forecast to WFFA Annual Meeting, May 3-5, Spokane Valley, WA. Contact: Erica Norquist, 360-736- 5750, [email protected]. hit 30 percent in 2012. Among the five analysts, forecasts for multi-unit Backyard Forests, May 9, Bonners Ferry, ID. Contact: Chris Schnepf, 208-446-1680, [email protected]. starts in 2012 range from 181,000 to 206,000. The risk might well be to Starker Lecture Series: Land Use, Climate Change, Water and Other Ecosystem Services, May 10, Corvallis, OR. Contact: OSU College of Forestry, 541-737-1585, the upside. http://starkerlectures.forestry.oregonstate.edu/. Single-family starts, meanwhile, Using your GPS, May 11, Coeur d’Alene, ID; May 12, Sandpoint, ID; June 1, Moscow, ID; have hovered in the low- to mid- Sept. 14, St. Maries, ID. Contact: Chris Schnepf, 208-446-1680, [email protected]. 400,000-unit range since the April Root Disease: The Hidden Menace, May 18, Sandpoint, ID; July 19, Hayden, ID. Contact: 2010 expiration of the homebuyer Chris Schnepf, 208-446-1680, [email protected]. tax credit. Measuring Your Trees, May 26, Coeur d’Alene, ID. Contact: Chris Schnepf, 208-446-1680, [email protected]. Starker Lecture Series: Capstone Field Trip: A Tour of the Alsea Revisited Watershed Study I n s u r i n g Area, May 31, Corvallis, OR. Contact: OSU College of Forestry, 541-737-1585, http://starkerlectures.forestry.oregonstate.edu/ the Future Montana Forest Stewardship 3-Day Workshops, May 31, June 1, 8, Columbus; June 21, 22, with the right expertise 30, Big Timber; July 20, 21, 28, Darby; Aug. 9, 10, 18, Bozeman; Sept. 21, 22, 29, St. Regis. Contact: MSU Extension Forestry, 406-243-2773, [email protected]. Timber Appraisal Oregon Urban and Conference—Community Natural Areas: Restoration, Management, and Enhancement, June 7, Portland, OR. Contact: Rick Zenn, 503-488-2103, Allowable Cut Determination http://oregoncommunitytrees.org/conferences/community-natural-areas/. Harvest/Reforestation Planning Idaho Forestry Shortcourse, June 13, 20, 27, July 11, 18, 25, Sandpoint, ID. University of Idaho Bonner County, 208-263-8511. Timber Sale Management National Tree Farmer Convention, June 14-16, Jacksonville, FL. Contact: Sara Anrrich, 202- Water Rights 463-2733, [email protected]. Survey, Land Use & Engineering Thinning and Pruning Field Day, June 16, St. Maries, ID; July 20, Cottonwood, ID. Contact: Chris Schnepf, 208-446-1680, [email protected]. OSWA Annual Meeting, June 22-23, Forest Grove, OR. Contact: Jim Brown, 503-284-6455, [email protected]. Forest Insects and Disease Field Day, July 27, Moscow, ID; Aug. 3, Bonners Ferry, ID. Contact: Chris Schnepf, 208-446-1680, [email protected]. National Christmas Tree Convention and Trade Show, Aug. 8-11, Sacramento, CA. Contact: NCTA, 636-449-5070, [email protected]. Free Computer Mapping Tools for Forest Owners, Aug. 10, Coeur d’Alene, ID. Contact: Chris Schnepf, 208-446-1680, [email protected]. (541) 267-2872 Coos Bay ◆ Dallas ◆ Forest Grove Send calendar items to the editor at [email protected]. www.stuntzner.com

26 . NORTHWEST WOODLANDS . SPRING 2012 Buyers will have historically low mortgage rates on their side if they have the financial wherewithal and decide to pull the trigger on a home purchase in 2012. The average 30- year mortgage rate fell to a record 3.91 percent. Of the three analysts forecasting rates for 2012, all predict the 30-year rate will move higher www.nwforestryservices.com through the year, finishing at around 4.8 percent and averaging 4.5 percent for the year. Optimism for upside potential to the starts forecast also is generated by a stronger finish to 2011 that included a marked drop in initial claims for unemployment insurance. Forest Economic Advisors (FEA) notes that if this trend continues, a resulting boost in household forma- tions will lift housing higher. FEA also notes that extremely low inven- tories of new homes for sale could result in inventory rebuilding, which could push starts higher. Canadian housing starts are pro- jected to finish 2011 at about 191,000 units, a one percent gain over 2010. 206.682.4840 But, according to the Canada Mortgage and Housing Corp., starts will cool in 2012 to about 187,000 units. Modest growth is forecast for British Columbia, Alberta, and Manitoba; all other provinces are forecast to see declines in multi-unit starts. Mild improvement is forecast for the manufactured home segment in 2012. Shipments in 2011 were expect- ed to finish close to the 50,000 units shipped in 2010. FEA forecasts ship- Certified Public ments of 58,500 units in 2012. ■ Accountants This article is reprinted with permis- 1501 4th Avenue sion from Random Lengths Suite 2880 Publications Inc. Seattle, WA 98101-1631 ADVERTISE HERE! www.bbjsllp.com For just $45 an issue, this could be your ad promoting your products and services. For more information, contact Lori Rasor at 503-488-2104 or [email protected]

NORTHWEST WOODLANDS . SPRING 2012 . 27 TreeSmarts: Forest Research You Can Use ▲ ▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲ ▲ TreeSmarts: Forest Research You and emerging sources of revenue; (2) private lands through easements, 30- ▲ Can Use appears in every other issue using payments to promote ecological year contracts, or 10-year cost-share ▲ of Northwest Woodlands. Column significance and economic viability; agreements. Objectives are to: (1) pro- ▲ editor Ed Styskel reviews research and (3) policies to achieve the first mote the recovery of endangered and ▲ being conducted from a host of two goals. (Reviewer’s note: The sum- threatened species under the Endan- ▲ sources, sorts through the items of mary herein focuses only on existing gered Species Act; (2) improve plant ▲ interest to family forest owners, and and emerging sources of landowner and animal biodiversity; and (3) ▲ provides a short summary of the per- revenue, and includes supplemental enhance . ▲ tinent results in understandable lan- program descriptions not in the study Markets. The term “markets for ▲ guage. If you have a suggestion to publication.) ecosystem services” refers to market- ▲ share with Ed, please contact him Public-financed payments. Publicly like structures used to direct invest- ▲ directly at [email protected]. financed payments for ecosystem ments to landowners for improving ▲ services can be provided in the form ecosystem function. Some of these Giving Credit Where Credit is Due: ▲ of government incentive programs, structures involve over-the-counter Increasing Landowner Compensation ▲ tax credits, or subsidies. Here are transactions involving one buyer and for Ecosystem Services. Authored by some examples. one seller, whereas others may include ▲ Gina L. LaRocco and Robert L. Deal. The Environmental Quality multiple buyers and sellers. Land- ▲ 2011. USDA Forest Service, Pacific Incentives Program is a voluntary pro- owners restoring, enhancing, or pro- ▲ Northwest Research Station, General gram that provides financial and tecting landscapes act as the sellers, ▲ Technical Report PNW-GTR-842. 32 technical assistance to agricultural and buyers are the entities or individ- ▲ pgs. Download at http://treesearch.fs. producers through contracts up to a uals wanting to purchase credits for a ▲ fed.us/pubs/37552. (797 Kb) ▲ maximum term of 10 years in length. variety of reasons, ranging from regu- ▲ One challenging issue in environ- These contracts provide financial latory obligation to philanthropy. ▲ mental policy today is how to create assistance to help plan and imple- Examples are below. incentives for private landowners to ment conservation practices that Wetland mitigation banking is for ▲ protect biodiversity and prevent address natural resource concerns the purpose of providing compensa- ▲ forestlands from being lost to develop- and for opportunities to improve soil, tory mitigation for authorized adverse ▲ ment. Conserving biodiversity serves a water, plant, animal, air, and related impacts to wetlands and other aquatic ▲ number of human needs, including resources on agricultural land and resources. Mitigation can occur onsite, ▲ maintenance of ecosystem services non-industrial private forestland. or a developer can buy credits from a ▲ that are critical to sustaining all life. The Conservation Stewardship landowner that established a wetland ▲ Many services produced from healthy, Program encourages landowners to bank by creating, restoring, or ▲ functioning landscapes are not well voluntarily address resource con- enhancing a wetland. ▲ recognized in current conservation cerns in a comprehensive manner by Water quality trading allows facili- ▲ incentive structures, including seques- undertaking additional conservation ties facing high pollution control costs ▲ tering or storing carbon in trees and activities and improving, maintain- to meet their regulatory obligations by ▲ soil, providing fish and wildlife habi- ing, or managing existing conserva- purchasing environmentally equiva- ▲ tat, filtering water, and reducing dam- tion activities. lent (or superior) pollution reductions ▲ ages from natural disasters. The Wetland Reserve Program is a from another source at lower cost, ▲ This study explored: (1) existing voluntary program offering landown- thus achieving the same water quality ers the opportunity to protect, restore, improvement for less expense. One and enhance wetlands on their prop- successful example is the EPA water- Professional Forestry erty. Technical and financial support shed-based permit for the Tualatin Services, Inc. is available to help landowners with River in Oregon that allows trading to Forest Appraisal • Management their wetland restoration efforts. The achieve the permit requirement for Expert Witness • Hazardous Trees goal is to achieve the greatest wetland temperature. Instead of installing functions and values, along with opti- refrigeration systems at two Tualatin Mike Jackson, CF, ACF mum wildlife habitat, on every River treatment plants for a cost of 360-943-1470 enrolled acre. $60 million, the wastewater utility Since 1960 The Healthy Forests Reserve helped pay upstream landowners to 100 Ruby St. S.E., Ste. B Fax 360-943-1471 Program assists landowners, on a vol- plant shade trees in riparian areas at a Tumwater, WA 98501 www.proforestry.com untary basis, in restoring, enhancing cost of only $6 million. and protecting forestland resources on Species conservation banking allows

28 . NORTHWEST WOODLANDS . SPRING 2012 the creation and trade of credits that because property law historically gave Oregon Senate Bill 513 Ecosystem represent wildlife conservation values landowners strong incentives to devel- Market Legislation, passed in 2009, on private lands. A landowner that per- op, rather than protect, ecosystem creates a framework for markets of manently protects the natural habitat services. However, values can change ecosystem services to efficiently main- values of his/her land can sell credits to over time, as shown by the federal tain ecological benefits, encourage someone required by law to mitigate Clean Water Act that limits private environmental restoration, and sustain their project impacts upon that same property rights so as to protect wet- local economies. species and habitat on nearby land. Of lands for the public good. Counting on the Environment 120 banks already approved in the A conservation easement can be used Willamette Partnership is a broad-based USA, at least four are in Washington when public or private entities volun- coalition of stakeholders committed to and at least one is in Oregon. None tarily contract with landowners to pro- restoring the health of the ecologically, occur yet in Idaho or Montana. tect land from development, in effect socially, and economically complex Carbon cap-and-trade is a voluntary preserving ecosystem services. The Willamette Valley, Ore. The partnership program to reduce greenhouse gas landowner can donate, or sell, the ease- has developed: (1) model agreements emissions. Project-based transactions ment to an organization or agency. with federal, state, and local agencies; can generate offset credits by an Landowners that donate conservation (2) user-friendly resource calculating approved activity that compensates for easements that meet federal tax code tools; (3) multiple-credit accounting emissions by a business in a regulated regulations can be eligible for a tax systems; and (4) crediting protocols for sector. Examples of offset credits deduction equal to the difference in fair salmon habitat, wetlands, upland include forest carbon sequestration, market value of the property before prairie, and riparian shading. methane recapture, and alternative and after the easement takes effect. The USDA Office of Environmental energy use. Because about 20 percent Mixing public financing and markets. Markets is the federal government’s of human-induced CO2 emissions are There isn’t always enough money avail- central effort to develop uniform stan- from land use changes and deforesta- able from public-financing payments dards and market infrastructure that tion, sustainable forest management or tax subsidies to fund ecosystem will facilitate market-based approaches can play an important role in climate restoration and conservation, so to nationwide agriculture, forest, and change mitigation. landowners may need to seek other rangeland conservation. The Business and Biodiversity Offsets sources of capital. Following are exam- For details about any of these pro- Program is a partnership between com- ples of making payments and markets grams, type the name into your panies, financial institutions, govern- work together. Internet search engine. ■ ments, and civil society organizations to explore biodiversity offsets by: (1) demonstrating conservation and liveli- hood outcomes from biodiversity offset pilot projects; (2) developing, testing, Letter to the Editor and disseminating best practices on bio- Dear Editor, diversity offsets; and (3) contributing to The Winter issue of Northwest Woodlands outlines trespass problems on pri- policy and corporate developments on vate property. Here is my story. I’m an absentee landowner living in western biodiversity offsets so they meet conser- Washington. vation and business objectives. In 1971 I bought a half section of rundown, unmanaged forestland in The Marketplace for Nature strives Stevens County with National Forest on three-and-a-half sides. This was a to establish integrated, ecologically great place for hunting and fishing and to commune with Nature. I began to effective, and easily accessible markets learn about forest management from farm forestry and others. I hand thinned for ecosystem services, and to facilitate and did selective logging. I now have a great, healthy forest. voluntary investment in high quality From the beginning, I’ve had trespass problems and garbage dumping, projects that address regional biodiver- including a truckload of plaster board scraps. I put up “No Trespass” and pri- sity goals at an appropriate scale. vate property signs. Most were torn down the first year. I put in cable gates A question remains about how mar- with locks. The posts set in cement. kets for ecosystem services affect pri- Within six months, many of the gates had been pulled out of the ground. I vate property rights. A foundation of reset the posts and put in new locks. On my next visit, I could not open the property law is that owning land locks. All had been filled with super glue. comes with particular rights or duties, I’ve politely asked several trespassers to leave and not come back, but noth- but especially the right to occupy the ing seems to work. I’m now ready to give up and leave the place wide open. land, to exclude others, and to decide Does this story ring a bell with anyone? whether or not to develop the land. Dick Vander Yacht Still another perspective is that proper- Blaine, Wash. ty rights may need re-definition

NORTHWEST WOODLANDS . SPRING 2012 . 29 an example of pejoration, a degener- Tips From The Treeman ation of the meaning of a word over a period of time. ▲ ▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲ Secondly, nimrod does, or did, ▲ DEAR TREEMAN, I save the news- taining clay and depict a hunter. Nimrod comes from ▲ papers from work to use at home to various chemical the Hebrew and was depicted as a ▲ help start fires in my wood stove. I additives, colored man of power and a mighty hunter. ▲ have found that the shiny paper with ink is then He founded the city of Babylon and ▲ led the construction of the Tower of lots of color ads doesn’t work as well applied, making the Steve Bowers ▲ as plain old newspaper. Is there a log- finished product. Babel, and we all know what hap- ▲ ical explanation? —Molly There is a direct correlation to the pened when a “larger authority” ▲ quality of paper and the consump- stepped in on that one! Note the ▲ DEAR MOLLY, Yes, there is a logical tion of energy and non-renewable origination of the word “babel” in our ▲ explanation for your question and we resources, thus an environmental English language and when used in ▲ will provide an answer...eventually. component may, and likely should, be conjunction to “Babel” is an example of amelioration, the direct opposite ▲ Paper, and the pulp papermaking taken into consideration. of pejoration. Nimrod remained in ▲ process, was purportedly developed in And for those of you who want to Jewish and Islamic tradition, emblem- ▲ China during the early 2nd century. It save a tree, there are alternatives to appears we have provided the eco- starting that fire. Fatwood Fire Starter atic of an evil person, an archetype of ▲ nomic incentive for them to supply us is produced from the stumps of an idolater and a tyrannical king. ▲ with running shoes and designer logged pine forests, and while not Nimrod was the great-grandson of ▲ jeans, and they provided us with the avoiding the cutting of trees, at least Noah. It augurs well for us he was ▲ technology to manufacture the prod- a greater utilization thereof.There are Noah’s great grandson and not the ▲ uct in which to advertise their exports. various fire starter bricks produced opposite ancestral chronology or the ▲ Talk about a long-term strategy! from recycled wood, again a better ark would have been a much smaller ▲ Your newspaper is a superior fire use of resources, but we still need vessel in consideration of his hunting ▲ starter to the glossy ad stuff for a cou- those trees. prowess. Most would agree on the ▲ ple of reasons. First and foremost, Potato chips will burn up to three preference of Noah’s husbandry pre- ▲ there is more “wood”in newsprint: minutes, plenty of time to get that fire ceding the carnage of Nimrod’s hunt- ▲ more paper and less chemical addi- going. And available in various flavors! ing expeditions. ▲ tives. Different qualities of glossy Packing dryer lint into used toilet Webster’s dictionary explains the ▲ paper have different manufacturing paper rolls is a great fire starter. And pejorative meaning probably originat- ▲ techniques and they grow more com- depending on how many of those ed with the cartoon character Bugs Bunny.The “wasculy,”wily Bugs used ▲ plex as the paper becomes “glossier” chips have been consumed and how the term in its original sense to refer ▲ and “shinier.”In order to give your messy the process, there should be to the dithering, dunderhead “wabbit ▲ paper that shiny look, it has been coat- plenty of material. Cotton balls satu- ed with an absorbent material that rated with petroleum jelly. Really? season”hunter Elmer Fudd, whom he ▲ limits diffusion of the ink by using a Walmart has Black Rock Powder called a “poor little Nimrod.”Over time, ▲ highly refined clay coating (the same Company Dynamite Crate and Fire however, the “hunter”meaning was ▲ stuff found in Elmers glue).Various Starters made from paraffin and saw- dropped, and the “dithering”connota- ▲ chemical additives are added and dust, but once again China has been tion, or any other synonymous word ▲ then rolled under very high pressure brought back into the equation.There association, stuck and the rest is histo- ▲ to create the shiny appearance.This is no escape! —Treeman ry, as they say. ▲ process is called supercalendering. The possible error in your letter ▲ At this point, the paper is ready for DEAR TREEMAN, I always hear people was the insertion of the word “marks- ▲ the advertising print. Already con- use the word nimrod in terms of a man.”Typically, individuals depict a stupid person, but that isn’t the case. marksman as one that is skilled in the INTERNATIONAL FORESTRY Anyone doing their research would use of firearms, but research suggests find that nimrod actually means a the word was first used in the Middle CONSULTANTS, INC. person is a great hunter and marks- Ages describing archers of a palace Professional Forestry Services man. —Joel guard.Thus, in consideration of spe- Forest Asset Managers cialization, your use of marksman GIS and Certification Services DEAR JOEL, You are correct on two of would be incorrect, but generalization Throughout the Pacific Northwest the three statements contended in places you “on the mark.”Specializa- (425) 820-3420 your missive. First, nimrod is a collo- tion infers marksman being used in quial expression for a dunderhead, association with firearms and the use [email protected] buffoon, lunkhead, moron, idiot. of gunpowder, an invention widely Tom Hanson Politician or public administrator. attributed to the Chinese. Like I said: Dennis Dart When used in these contexts, we see There is no escape! —Treeman

30 . NORTHWEST WOODLANDS . SPRING 2012 Washington County will host OSWA Annual Meeting By JIM BROWN may attend. Topics for the Friday ses- ested in developing our local economy sions will include current state issues through sustainable forestry.” he Washington County Small affecting forest owners, ways small Each day’s events are open to all Woodlands Association woodland owners can help each other, interested parties and the general public. T (WCSWA) will host the Oregon forest owner liability and insurance Detailed registration information will Small Woodlands Association (OSWA) options, and improved planning tools be available on OSWA’s website at Annual Meeting June 22-23. The venue and cost-share opportunities. Breaks www.oswa.org. This event brings for Friday’s indoor meeting will be the between sessions will be long enough together five organizations that promote University Center at Pacific University for members to socialize a bit, share effective, sustainable privately-owned in Forest Grove. Overnight accommo- ideas, and check out the vendors and forests, and welcomes members of all of dations will be available on campus or OSWA’s silent auction items. An OSWA these organizations. This is a winning at motels located close to the University membership meeting will take place combination to help promote network- campus. A Saturday woods tour will during lunch to conduct association ing among these interest groups and take place at Hyla Woods’ Timber business. A reception and dinner will be create a better public understanding of Forest, owned and operated by the Pam held Friday evening. Silent auction the opportunities and challenges and Peter Hayes family. results will be announced after dinner. involved in small woodland ownership The OSWA Board will meet on The Saturday woods tour will be a and management. Please mark your cal- Thursday evening, June 21; any member “Howdy Neighbor” tour, supported by endars and plan to attend. the Oregon Forest Resources Institute If you plan to attend and are coming (OFRI) and the annual Build Local from some distance away, you might ADVERTISERS’ INDEX Alliance (BLA) summer event. The want to spend an extra day so you can AKS Engineering and Forestry ...... 31 Pam and Peter Hayes family are the visit the Tillamook Forest Center, Adams Timber Service ...... 4 2012 Washington County Outstanding www.tillamookforestcenter.org and/or Bancroft Buckley Johnston & Serres ...... 27 Tree Farmers the Year, an award spon- the World Forestry Center, www.world- Forest Seedling Network ...... 31 sored and conferred by the Oregon Tree forestry.org. They are each within easy GeneTechs ...... 7 Farm System (OTFS). The Saturday driving distance of Forest Grove. ■ Hampton Tree Farms, Inc...... 20 tour at Hyla Woods Timber Forest will International Forestry Consultants ...... 30 celebrate the Hayes’ fine stewardship JIM BROWN is president of the Lusignan Forestry ...... 3 and innovative forest management and Washington County Small Woodlands McFarland Cascade ...... 18 marketing. Topics, using on-site exam- Association. He can be reached at jim- Northwest Farm Credit Services ...... 11 ples as a backdrop, will include: effec- [email protected]. Northwest Forestry Services ...... 27 tive , improved wood mar- kets, “beyond wood” markets, essential Northwest Hardwoods ...... 23 u Surveying new knowledge, key partnerships, and Northwest Management ...... 23 u Engineering educating the consumer on forest prod- ODF–Private Forests Division ...... 21 u Logging Roads ucts. For those of you not familiar with OREGON® ...... 25 u Timber Cruising Oregon Forest Resources Institute ...... 15 BLA, it “works to improve the vitality AKS Engineering and Forestry Oregon State University Foundation . . .Back Cover of local forests and related human com- Professional Forestry Services, Inc...... 28 munities by connecting local, responsi- 503-925-8799 bly grown and processed wood with fax 503-925-8969 Seadust Wildlife Controllant ...... 24 13910 S.W. Galbreath Dr., Suite 100 Silvaseed Company ...... 19 local projects” and includes “foresters, Sherwood, OR 97140 Sperry Ridge Natural Resources Mgmt...... 7 landowners, architects, millers, design- email: [email protected] ers, builders, furniture and cabinet mak- website: www.aks-eng.com Steam Logging Show ...... 10 – CALL Keith Jehnke or Alex Hurley – Stuntzner Engineering & Forestry ...... 26 ers, and other individuals that are inter- Susheen (Seattle) Timber Trading Inc...... 17 Sustainable Forestry Initiative ...... 17 Tree Management Plus ...... 26 Connecting Forest Landowners with Trout Mountain Forestry ...... 14 Seedlings, Services and Contractors Warren Weathers ...... 4 Washington Association . . . .9 DISCOVER Our Interactive Website Weyerhaeuser Company ...... 3 Wilbur-Ellis ...... 22 www.forestseedlingnetwork.com World Forest Investment ...... 5 BUY/SELL SEEDLINGS • FIND VENDOR SERVICES & CONTRACTORS • VALUABLE RESOURCES

NORTHWEST WOODLANDS . SPRING 2012 . 31 YOUR LEGACY. YOUR UNIVERSITY.

Family. Forestry. Stewardship.

Through a partnership with Oregon State University, you can address the challenges of transferring timberland in a way that reflects your values and extends your legacy.

OUR EXPERTS CAN ADVISE ON: • Transferring timberland to heirs • Donating timberland to OSU’s research forests • Planning a gift that provides income in retirement • Creating a scholarship, faculty fund, or program fund in your family name

CALL OR E-MAIL TO LEARN MORE Zak Hansen • OSU Foundation • College of Forestry • 541-737-4016 • [email protected]