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IN THE NEWS
Sierra Pacific Industries (SPI) settled a nearly one billion dollar fire damage claim for $47 million in cash and 22,500 acres of “undeveloped wildland” in California. The Forest Service will select the forestland from a list of 200,000 acres designated by SPI, and codefendants have to come up with another $8 million, making the total cash settlement $55 million.
The claim stemmed from the 65,000-acre Moonlight Fire, which ignited on private land and burned 47,000 acres of national forest land. SPI vigorously maintains it is not liable for the fire and will defend several cases scheduled for trial in state Superior Court in 2013.
June 2012 DNR Economic and Revenue Forecast Highlights
After offering some encouragement earlier in the year, the budding U.S. economic recovery seems to have stalled out in recent months. Nevertheless, the U.S. unemployment rate has been steadily moving down since the end of 2009 and stands at 8.2 percent as of May.
There are 4.3 million more jobs in the U.S. than at the end of 2009. New housing starts are finally creeping up from the historically low and flat level they have been at for the last three years. But the fragile economy faces various serious challenges.
Pacific Northwest log prices continue to hold relatively steady, with the price for a “typical” DNR log delivered to the mill averaging $475/mbf over the first five months of 2012, down slightly from 2011. West Coast lumber prices are up a little from last year, with the Random Lengths’ Coast Dry Random and Stud composite lumber price averaging $282/mbf for the first four months of 2012, compared with an average of $270/mbf for all of 2011.
Through the first eleven months of nearly-completed FY 2012, DNR timber sales prices have averaged $309/mbf, compared with the $282/mbf price projected for the entire fiscal year in the three previous Forecasts. Since a significant recovery in the U.S. housing market is not foreseen over the next several years, we are holding the projected FY 2013 timber sales price at $274/mbf and the FY 2014 and 2015 prices at $300/mbf.
With FY 2012 nearing its end, projected timber sales volume for the fiscal year is revised downward to 553 mmbf from 656 mmbf since actual volume sold has not matched the earlier target.
Bottom Line. There are significant reductions to projected timber revenues because of the reductions in projected timber sales volumes in FYs 2012, 2013, and 2014. The timber revenue projection for the 2011-2013 Biennium is revised downward four percent from $336.2 million to $323.3 million. For the 2013-2015 Biennium, the projected revenue from timber removals is revised down 12 percent from $389.1 million to $341.7 million.
U.S. forests continue to create jobs and boost economy through tourism; restoration efforts and wood-to-energy initiatives; and nano-cellulosic breakthrough.
Elizabeth L. McGreer, President of McGreer and Company Inc., was named a Worldwide Who’s Who Professional of the Year in Forestry. She started McGreer and Company 24 years ago and has provided her customers with high-quality services.
She has spoken publically on timber bonding, taught underwriting seminars, and written four books. She is also the only surety agent in the U.S. specialized in bond programs for the forest products industry and is a member of the Federal Forest Resource Coalition, American Forest Resource Council, Montana Wood Products, Federal Timber Purchasers Committee, and the Northwest Outdoor Writers Association.
Congratulations for an honor well deserved!
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