CAPITAL IDEAS -- LIVE!
JULY 2012 News Conference for Forest Owners
Sponsored by the Alabama Forest Owners' Association, Inc.
This Conference was recorded on July 18,
Hayes D. Brown
starting time: (00:00)
Hayes D. Brown, attorney and forest owner, will moderate this news
conference. Hayes' email address is
Click Here to View & Hear Prior News Conferences.
Dr. H. Sterling Burnett
Harvesting Trees Will Prevent Fires
Sterling Burnett was a
featured speaker at AFOA's 2008 Annual Meeting in Atmore, Alabama, and is a
Senior Fellow and Energy and Environmental Policy Analyst at
the National Center for
Policy Analysis (NCPA). When our NCPA Daily Policy Digest
arrived on July 13, we were surprised to read,
"Harvesting Trees Will Prevent Fires." Healthcare and Energy issues
are the more common fare of the Digest. The Digest article credited H.
Sterling Burnett as the author and the The New York Times as the source
... The New York Times?
The big-city paper had featured a debate with eight writers giving their
points-of-view on the following questions:
- Does the Government Cause or Prevent
- Has the government played a role in
increasing the risk of these fires?
- Can government policies prevent them?
Dr. Burnett took the position that
Harvesting Trees Will Prevent Fires, and began his debate essay
with, "While wildfires, per se, are entirely natural, the size,
intensity and harm caused annually by the past decadeís forest fires are
almost entirely of human origin: federal mismanagement of our national
forests are to blame."
We applaud The New York Times for
putting the Wildfire/Forest Management issue in front of so many people and
we applaud Sterling Burnett for bringing his perspective to the table.
Let Individual Owners Manage the Forests,
The New York Times, Paul Schwennesen, 7/11/12
Global warming blame-ologists play with fire, Michelle Malkin, 7/6/12
Only You Can Exploit Forest Fires
(same article as above, more interesting title), National Review
In Order to
Extinguish Forest Fires, Donít Let Logging Burn Out, NCPA, 9/10/2008
Burning Forests, NCPA, 8/30/2000
Manage National Forests, NCPA, 10/9/1998
Phone: (972) 386-6272
Dr. Jack Lutz
What Makes a Softwood Tree Valuable?
Jack Lutz is Principal and
Forest Economist at the
Forest Research Group, Rowley, Massachusetts. We are always happy
when we receive one of Jack Lutz's Forest Research Notes, because he is so
good at helping us gain insight into forest economic issues. But Vol. 9,
Number 1, 1Q12, What Makes
a Softwood Tree Valuable?, was so packed with information that we
quoted from it in the June issue of Capital Ideas, and then reprinted
the entire V. 9, No. 1, in the July and August issues of AFOA's newsletter. We
especially liked the graphs on pages 1 and 2. Look at the red bars in each
and notice how small the proportion of red is in the graph on page 2. That's
the graph of Value Yield. If you are managing your planted pine
stands right, you will find the real
money in the Sawtimber trees (green bars), not the
little red bumps of pulpwood. Next, take a look at the bottom line of Table 2
on page 4. Even with today's rotten sawtimber prices, sawtimber is still worth
2.82 times as much as pulpwood per ton. If you are skillful enough to
grow poles (think dense stands, think longleaf pine), they are currently
6.16 times as valuable per ton as pulpwood! Keep your eye on the
money. Be sure to read, and not ignore, these sections in the Notes:
"Location, Location, Location," "Other
Factors," and "Values Change." All good stuff.
All past Forest Research Notes are online.
Phone: (978) 432-1794
The Facts about Forest Resources in Alabama
Brian Hendricks is the Forest
Inventory & Analysis Coordinator for the
Commission. Brian is in charge of Alabama's portion of "The Nation's
Forest Census," and supervises a small staff of foresters who count and
measure the trees at thousands of locations all across the state. Each year
the Commission produces a report on the status and condition of Alabama's
forests. The Alabama
Forest Resource Report 2011 has just been published and is
available for you to review. We like to use the report to give us
information we can use when talking with friends at the gym, Rotary Club, or
the local coffee shop. For example, we learned on page 3 of the report that
Alabama has 22.8 million acres of forestland and has the third largest
acreage of commercial forestland in the nation. "Approximately 94% of
Alabama's timberland is privately owned..." "Alabama's forests are comprised
of 44% hardwood stands, 42% softwood (mostly pine) stands, and 14% mixed
pine/hardwood stands." The numbers in that last sentence can get you in a
pretty good argument with people who believe that we have cut all the
hardwood forests in the state. If you want to stir up your friends a little
more, look on page 15 where it says, "Since 2000, total growing stock volume
(tons) has increased by 12.0%; softwood volume has increased by 19.3% and
hardwood volume has increased by 5.6%." We're growing a lot more timber than
we're cutting. Tables on pages 3 - 5 list acres of forestland in each
Alabama county. Look up yours; you may be surprised by the big numbers.
Information Sources Used by Brian to
Create the Report:
Forest Inventory &
Forest Inventory & Analysis EVALIDator 4.01
Phone: (334) 240-9370
Dr. James L. Hanula
The Kudzu Bug - A Conundrum
Jim Hanula is a Research Entomologist
U.S. Forest Service Southern
Research Station in Athens, Georgia. Jim is doing research on the
kudzu bug, a stink bug that arrived in the U.S. from Japan about 3 years ago
and now is found all over the Southeast (see
map). In test plots, Jim found that the bug caused a 33% reduction in
the amounts of kudzu when compared to control plots where the bugs were
excluded. Sounds great - where can I get some? Well, it is great for those
of us who want to rid our land of kudzu, but not so great for soybean
growers. The bug enjoys eating soybean plants as much as kudzu vines. In
fact, the bug's feeding is so damaging to soybeans (20% yield reductions),
that scientists are researching the possibility of killing kudzu across the
south so the bug has no safe haven.
Additional Reading (This is all good
Phone: (706) 559-4253
Dr. Dennis W. Fulbright
Nut Tree Culture & Northern Nut Growers Association
Dennis Fulbright is a Professor
Michigan State University and
President of the
Northern Nut Growers Association
(NNGA). Dennis is also the editor of NNGA's Annual Report and its
singular best seller,
to Nut Tree Culture in North America, Vol. 1 ($70 for non-members of
NNGA). According to NNGA's website, "The Northern Nut Growers Association,
Inc. brings together people
interested in growing nut trees. Our members include experts in nut tree
cultivation, farmers, amateur and commercial nut growers, experiment station
workers, horticultural teachers and scientists, nut tree breeders, nursery people, foresters, and beginning nut culturists."
We asked Dennis to introduce us to the Association and to the Guide and let
us know if the NNGA holds any value for Alabama landowners.
Nut Growers Association 103rd Annual
Meeting, Lexington, Kentucky, July 22-25, 2012
Phone: (517) 353-4506
Roger F. Bryant
Tech News from The Forest Geek
Roger Bryant is a Consulting
Forester and owner of
Management based in Smyrna, Georgia. Roger is also a blogger at
blog focusing on forestry and technology news, product and service reviews,
tips & tricks of the trade, and random musings with a forestry spin." By way
of introducing forest owners to the ForestGeek website, we asked Roger to
highlight an app or two that he thinks might be of interest to you. A list
of the apps he has spoken about in the past (Roger led a breakout session at
AFOA's Annual Meeting in Tuscaloosa) are at
http://forestgeek.com/afoa. He will also answer the question, "Which
tablet or smartphone should I buy?" Did anyone think there would be a
demand for information on which phone to buy when Ma Bell was being broken
up into the Baby Bells? Roger will be speaking at the
Western Forestry and Conservation Association Field Technology Conference
in Portland, Oregon on September 26, 2012.
Phone: (678) 310-4787
Erick St. Clair
Oil & Gas Activities Near Your Land
Eric St. Clair is a
Senior GIS Specialist with the
& Gas Board of Alabama, "a regulatory agency of the State of
Alabama with the
statutory charge of preventing waste and promoting the conservation of
oil and gas while ensuring the protection of both the environment and the
correlative rights of owners." The Board keeps records of oil and gas well
locations and drilling logs. If a landowner wants to know if there are oil
or gas deposits near his land, or if he wants to view drilling records from oil or
gas wells on or near his property, he can get that information from
the Oil & Gas Board. Eric is the expert who manages all that information and
has developed ways for us to get it from the Board's website. In an email,
Eric wrote, "I've completely redone the online maps and I think your
participants will be delighted to see some of the new features."
Eric refers to the following screenshots during his interview:
Link to the Online Mapping System
"This map is done with Flash so the iPad browser isn't supported. But
there is a free ArcGis app you can download from the App Store and use.
It's not the exact same, but it has many of the same features as the
main online mapping system."
"There is another way to search our databases other than using the maps."
Phone: (205) 247-3661
Henry I. Barclay, III
IRS Challenging Forest Expense Deductions
Henry Barclay, CPA and Managing
Partner of Lehmann, Ullman
and Barclay LLP, called AFOA about 2 weeks ago and said, "Some of
your members may need help. The IRS is targeting high income taxpayers,
challenging them over their forestry expense deductions." In a special issue
of Tax Tips,
Henry warned, "In particular, any business activity reported on Schedule C
or Schedule F which has generally not shown a profit in the last 3 years
will likely be challenged as a potential 'hobby' activity. Losses from
'hobby' activities are not deductible. If you report timber as a business or
farm activity, you should be concerned." In Tax Tips, Henry
advises forest owners to be prepared to answer the nine questions IRS agents
"use to determine whether an activity is engaged in for profit."
- What is the manner in which the taxpayer
carries on the activity?
- What is the expertise of the taxpayer or
- What is the time expended by the
taxpayer in carrying on the activity?
- What is the expectation that assets used
in the activity may appreciate in value?
- What is the success of the taxpayer in
other similar or dissimilar activities?
- What is the taxpayerís history of income
or losses with respect to the activity?
- What is the amount of occasional
profits, if any, which are earned?
- What is the financial status of the
- What are the elements of personal
pleasure or recreation in the activity?
Tax Tips closes with a list of
"significant elements of a timber business" that might help you convince the
IRS that you are investing in forest management activities to make a profit.
Phone: (205) 439-6520
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