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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, 2012

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Hayes D. Brown   Alabama Forest Owners' Association

Hayes D. Brown

starting time: (00:00)
Comment

Moderator

Hayes D. Brown, attorney and forest owner, will moderate this news conference. Hayes' email address is hbrown@hayesbrown.com.

Click Here to View & Hear Prior News Conferences.

 

Dr. H. Sterling Burnett

(00:27)
Hear Conference

Comment

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 Wildfires?
  • 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.

Additional Reading:

Phone: (972) 386-6272
Email: sterling.burnett@ncpa.org

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Dr. Jack Lutz

(04:13)
Hear Conference

Comment

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
Email: jlutz@forestresearchgroup.com

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Brian Hendricks

(08:11)
Hear Conference

Comment

The Facts about Forest Resources in Alabama

Brian Hendricks is the Forest Inventory & Analysis Coordinator for the Alabama Forestry 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 & Analysis Website
Forest Inventory & Analysis EVALIDator 4.01
Timber Mart-South

Phone: (334) 240-9370
Email: brian.hendricks@forestry.alabama.gov

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Dr. James L. Hanula

(12:00)
Hear Conference

Comment

The Kudzu Bug - A Conundrum

Jim Hanula is a Research Entomologist at the 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 information):  

Phone: (706) 559-4253
Email: jhanula@fs.fed.us

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Dr. Dennis W. Fulbright

(14:56)
Hear Conference

Comment

Nut Tree Culture & Northern Nut Growers Association

Dennis Fulbright is a Professor at 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, A Guide 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.

Northern Nut Growers Association 103rd Annual Meeting, Lexington, Kentucky, July 22-25, 2012

Phone: (517) 353-4506
Email: fulbrig1@msu.edu

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Roger F. Bryant

(18:10)
Hear Conference

Comment

Tech News from The Forest Geek

Roger Bryant is a Consulting Forester and owner of Genesis Forest Management based in Smyrna, Georgia. Roger is also a blogger at ForestGeek.com, "a 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
Email: roger.bryant@genesisforestry.com

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Erick St. Clair

(21:46)
Hear Conference

Comment

Oil & Gas Activities Near Your Land

Eric St. Clair is a Senior GIS Specialist with the State Oil & 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:

O&GB Website Links:

  • 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
Email: estclair@ogb.state.al.us

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Henry I. Barclay, III

(24:42)
Hear Conference

Comment

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."

  1. What is the manner in which the taxpayer carries on the activity?
  2. What is the expertise of the taxpayer or his advisors?
  3. What is the time expended by the taxpayer in carrying on the activity?
  4. What is the expectation that assets used in the activity may appreciate in value?
  5. What is the success of the taxpayer in other similar or dissimilar activities?
  6. What is the taxpayerís history of income or losses with respect to the activity?
  7. What is the amount of occasional profits, if any, which are earned?
  8. What is the financial status of the taxpayer?
  9. 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.

Additional Reading:

Phone: (205) 439-6520
Email: henryb@lub.com

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