Who Wants to Live Forever?

I was figuring out the rotation on 107 acres of twenty-eight year-old loblolly pine we just got. We will clear cut in five years, let it idle for a year or two, maybe put a few goats on it, and then apply biosolids and replant. You have to plan ahead. As I was thinking about it, however, I realized that my chances of seeing this cycle through are small and if I am still around, I probably will be unable to take part in the operation. I will be compost before this next generation of trees matures on that tract.

The funny thing is that older guys plant the most trees. I bought the land from a guy in his eighties. He planted (actually directed they be planted) these trees when he was about my age. He gave me a good deal on the land and it seems to me that one reason is that he wanted to give the land to someone who would take care of it. His kids evidently are not much interested in forestry. Sometimes people ask why I plant trees when I am reasonably certain that I will not see them mature. I am not sure. It is just what I do, a kind of habit. Some people say that you plant trees for the next generation. I don't know if it's all that true. The little trees are a joy for today too. How does the song go? "a promise for the future and a blessing for today."

Forestry can be a good investment, provided you have a lot of patience. In the long run, reasonably managed pine forestry produces bigger returns than the average stock portfolio. But you have to love it too. I can imagine that land management could be an unpleasant chore for some people.

One of the things I like best about forestry is the "diplomacy." I get to work with local farmers, hunters, foresters, loggers and paper and pulp firms. I find that a lot of people want to use my land and many are willing to help. Local hunters have been very helpful in establishing quail habitat and native warm season grasses. Our interests coincide. They want a healthy wildlife habitat to produce animals they can hunt. I am happy to have my land kept in a healthy state. A guy from a local paper mill helped me get locally grown longleaf pine and bald cypress. We have established an area of "Virginia heritage forest." The whole process, which included the trees, burning, planting and site preparation cost me only around $700. Of course this is another forest I will never see mature, but I can picture it.

Forestry is a good example of cooperation between individuals, government, business and NGOs. The State of Virginia sent a wildlife biologist who gave us advice on which types of vegetation to establish to encourage wildlife and protect soil and water resources. The state also gives us training in things like fire management. We also get advice on forest health from the Sustainable Forestry Initiative (SFI).

Virginia Tech holds all sorts of seminars on things like timber management and biosolids. We get advice from the Tree Farm System, Americas oldest sustainable forestry NGO. Dominion Power paid us around $200 an acre to manage our land that lies under their power lines. We keep the land in grass and forbs (Euphorbiaceae). Wildlife loves it and it doesn't bother their transmission. A local paper mill helped me write a management plan for one of my tracts. We are thinning to different densities. They want to show clients how different management regimes produce different results. The Boy Scouts come down to cut trails and build bridges. They are mostly city boys and in some ways they create more work than they do, but it is fun to have them around. The local hunt club maintains the roads and shoots the local varmints. Their presence discourages vandalism and dumping. It is a pretty good system, an integrated social web.

I try to take my sons and daughter along when I go to visit the farms. They always comment about how happy and friendly everybody seems. That has also been my experience. I don't really know why that is, but I have a theory, actually it is two-fold. I think forestry generally attracts people with a long term perspective and forestry teaches a long term perspective. It has a calming effect that brings joy in many things. You know your place and can be both active and passive. Forestry is subject to natural laws that cannot be rushed, but if you think ahead, understand the limits and work with the natural systems you can affect remarkable achievements. Trying to rush the process produces no good and often a lot of bad, but a little leverage properly informed and a lot of time can make produce big results.

You just won't live to see them. In the long run we are all dead. Once you understand that, you are free to be happy with the life you have.

Posted by Christine & John at June 9, 2012 8:45 PM
Comments
Comment #346498

I’m way out of my element on forestry, C&J, but it’s a slow Sunday and …

I have the feeling that tree farming for relatively small acreage, say 500 acres or less, is primarily done for a hobby and/or love of nature. I would think you could harvest what, every 20 years. I suppose the idea is to stagger planting so you have a crop coming every few years.
But, I am curious as to whether a small farmer would find it profitable if related subsidies like you mention were not in place or available.

It would seem the corporation could best benefit from forestry. Corporations, having eternal life, can conduct research and make long range plans. And, of course, are subsidized to high heaven.

It would seem the efficiency of the corporation would soon overwhelm the small plot farmer. I think this is being borne out by the agriculture/cattle producing industry. Seems most of the farms in the Valley are owned by subs of one or two of the top agri corporations. Doesn’t tree farming reflect a similar situ?

It seems that few farming ventures are passed on from family to family as in days gone by. So, the quicker way to prosperity is to sell off the family farm and invest in a gas station, etc. Those that stick in are more like hobbyist or nature lovers with many managing a career outside of farming.
Congress is looking to change farm subsidy policy which comes as a surprise to me. One would think that with harmonization of world laws thru globalization that subsidies would be ended or severely limited.

http://www.examiner-enterprise.com/sections/news/business/congress-moves-create-new-farm-subsidy.html

“Federally subsidized crop insurance programs are now costing taxpayers $7 billion to $8 billion despite the biggest farm profits in nearly four decades. The Agriculture Department predicts net farm income by the end of this year till total $103.6 billion, a rise of 31 percent from 2010. The department says this is the highest value since 1974, adjusted for inflation.”

Based on that effort it seems the Corpocracy intends to have their cake and eat it too. Doesn’t say much for free trade. If a fellow in China can raise farm produce at a cheaper price without any subsidy why would he want to play in a market where products are subsidized by a gov’t?

“We are hoping to keep stability in agriculture so their food prices don’t double,” he said. “We’re trying to make sure the United States produces the cheapest food.”

Makes one wonder how serious the corpocracy is about globalization, WTO, and so on.

C&J, would the new farm subsidy program include forestry products and what is your prognosis for the future of the small tree farm operation?

Posted by: Roy Ellis at June 10, 2012 1:55 PM
Comment #346501

Roy

Which subsidies?

We cooperate with others in a mutually beneficial way. Dominion Power pays us to plant things in way that save them the trouble of cutting. We don’t make any money and in fact work for less than they would pay to keep their lines clear. The State of Virginia gives us consultation on wildlife management. If they did not, we would simply not have this knowledge. It would cost us LESS not to take the actions that save wildlife. The seminars are useful education, but again.

The reason I object to the use of the word subsidy is because people who do not understand may believe that is a way for landowners to make money. Let me be clear, none of the “subsidies” we receive have put any money in our pocket and those I mention above have actually cost me money to cooperate.

Forestry is not a particularly subsidized occupation.

Re corporations - corporations sold most of their forest land after the 1990s because they found owning land less profitable and not necessary for their operations. Smaller holder like me bought some of the land and we supply the mills. But most of the forest land formerly owned by big firms is now owned by TIMOs or REITs. These are in turn owned by investors, mostly large pension funds and insurance companies. Timber investment is a safe and steady investment, but - as you mention - it is hard to make small acreage pay off in the lifetime of an individual.

For a small guy like me, forestry is a passion and an investment. You could not make a living off 500 acres of forest land. But it is a good part of a diversity portfolio. If you look at a thirty year time horizon, forestry produces around 11% a year, which is better than the stock market. But I suppose if you were to add in the time it takes to manage the investment (more than stocks) it is not a great investment IF you don’t like it. I do.

Re public policy - I think it is important the local, state and Federal government support forestry in the modest ways they do, PLUS not bother us too much with regulations or property taxes. The reason is the danger of development. I want to keep my land covered in forest, but there is the constant temptation to sell and make big bucks in development. Landowners like me provide a service to society. Our land provides wildlife, clean water, fresh air and beauty, which somebody who does not own land gets as a free service. If government had to pay somebody to do the things that my neighbors and I do for nothing, it would cost a fortune. It is an extremely good investment for universities, government entities and NGOs to help landowners do the “right thing”.

In the last six months, we have established eight acres of quail habitat and six acres of Virginia heritage forest. This will produce little or no financial benefit for us. In fact, it cost hundreds of dollars. The State of Virginia gave us advice. For this, they essentially got a free park. Virginia Tech may do studies. For this they get an outdoor laboratory. The Boy Scouts made trails. For this they get a camp. I could go on. This is a basis for win-win relationships. Everybody does something and everybody gets something. If only all our society worked so well.

Re prognosis on small tree farm investment - in the 30 years or so I probably will be alive, I am reasonably certain small tree farms will survive and in my area prosper. In the last couple of years, we got two new mills, one making fiber and one making biomass wood chips. We already have paper mills and sawmills nearby. Small owners need these things. I hope that my land stays in trees after I am dead and/or transfers into another form of sustainable use. But that will no longer be my business.

Posted by: C&J at June 10, 2012 2:57 PM
Comment #346504

Interesting subject, C&J. Here is a url that gives some recent history of forestry ownership/mgmt.

http://www.pinchot.org/files/Binkley.DistinguishedLecture.2007.pdf

Really wasn’t aware that land/forest is an investment market with transactions handled by the ‘goldman sachs’ of the world. According to the url the TIMO’s are selling off land for development while not investing in new lands. That’s not good.

But, the selloff does allow small investors to pick up 50/100 acre tracts. In this way some lands find their way into conservation and/or long term ownership.

Surprised too, that some 84% of timberland is in held by the private sector. The incentive to sell, forest land for urban use versus retaining as forestland. is 87 times higher in the Southeast and 111 times higher in the Northwest.

Amazing that its not all in condos.

Posted by: Roy Ellis at June 10, 2012 5:41 PM
Comment #346505

Roy

Old guys like me resist selling. We like the trees better than the money. And by the time people can afford to buy or inherit forest land, they are also old guys like me.

I do worry about forest fragmentation and development, however. I hold to the old school in most things. Chrissy (my wife the C in C&J) tells me that I am a dinosaur. I just say “I am Rex, hear me roar”

Posted by: C&J at June 10, 2012 7:08 PM
Comment #346508

When lloooooove must diiiiiie?

Sorry. Big Highlander fan as a kid.

I think one important thing to take into account with long term policy is where things are likely to settle. It used to be we had enough of a manufacturing sector here so when bad things happened, the cycle completed it’s downward trend, the upward trend in consumer goods would start redirecting money towards the average consumer, creating a virtuous cycle of increased productivity.

Our problem this time around is that we decimated a lot of that industrial base in the service of making some of the investors, including the executives themselves, a little bit richer.

We need to think about the economy in more than just the terms of the few wealthy folks, because it really is dependent on us all. Elitist economic policy that concentrates on making the rich richer isn’t merely morally wrong, it’s impractical for maintaining widespread wealth creation, and long term economic prosperity for most Americans.

Posted by: Stephen Daugherty at June 10, 2012 8:48 PM
Comment #346510

Stephen

The trees grow without paying much attention to what politicians do. Over thirty or forty years, we get a little of all sorts of things and it evens out.

Personally, I think it would be a good thing if more people would invest in forest land. It would give them a tie to the earth and teach a little patience.

One of the things I find distressing in modern society in general and politics in particular is the idea that you can get things out of order or fast. People demand things they really cannot have and/or in order.

In a natural system it is clearly silly to seek to harvest trees (or crops) before you plant them. And you cannot rush the growth by making lots of noise. Sometimes you just cannot get something, no matter how much you think you deserve it. These lessons are true in most of life, but harder to see.

Posted by: C&J at June 10, 2012 9:22 PM
Comment #346511

“One of the things I find distressing in modern society in general and politics in particular is the idea that you can get things out of order or fast. People demand things they really cannot have and/or in order.”

Not true in all things, C&J. I looked around for corruption in the US timber industry and didn’t see much.

Reason is, IMO, that illegal timber production is a big part of globalisation. Those folks who want ‘more’ or ‘want it fast’ are getting it from poor countries who aren’t capable of protecting their forests.

http://www.washingtonpost.com/wp-dyn/content/article/2007/03/31/AR2007033101287.html

And, the corpocracy all say, Amen!

Corpocracy you say, what corpocracy? Well, should we not be a little suspicious when Justice tells us that 70% of all drugs entering Puerto Rico reach the US and that the drug cartels are actively plying their trade in some 1350 US cities.

One might ask how it is possible to run so much into the country given the investment in US enforcement.

Logs are turned into furniture and shipped in, which is a little easier to understand. But, that’s what we have with globalisation. We can exploit from afar. Just keep the violence outside the US and party on.

How cool would it be if ‘fast and furious’ was just a cute way to get US guns into the hands of the Cartels? Should we believe failing to follow the guns was just an ‘administrative error’?

Then, there is the importation of foreign near extinct and exotic marine and wildlife. Seems them tigers and lions and huge shipments of elephant ivory just slip right thru, undetectable.

Corpocracy, aka quid pro quo, is alive an well, IMO.


Posted by: Roy Ellis at June 10, 2012 10:10 PM
Comment #346527

C&J-
Nature does a lot of things without paying much attention to what it does, but it doesn’t necessarily carry out our wishes while it does that. If Pine Bark beetles come through your neighborhood, they’ll make short work of your investment whether it’s fair or not.

I don’t believe in assuming that events will favor me, or leaving things to chance.

You can be patient, be slowly watchful when you create a system that doesn’t encourage chaotic feedbacks. Things as they are now, both in terms of the technology and the policy, allow the consequences to a small, seemingly (and usually) insignificant event to ricochet around the system like a burst of machine gun fire inside a tank.

I don’t believe in being able to prevent bad things from happening, but I think we can make certain kinds of catastrophes less common, and less destructive. Patience can be a virtue. Hesitation in the face of urgent matters and disastrous consequencews for earlier screw-ups, not so much.

Not everybody’s taking your truly conservative stance. A lot of people just want the government to run interference for them while they make a lot of money doing something the rest of us will want cut short.

Posted by: Stephen Daugherty at June 11, 2012 7:53 AM
Comment #346543

Stephen

Nature doesn’t care what we do. It does not have a personality.

The beetles are a problem, but since we manage for the beetle, it will not make short work of our investment. Even if beetles do strike, we still can sell pulp.

Any investment brings risks. Forestry is relatively safe.

“I don’t believe in assuming that events will favor me, or leaving things to chance.”

We are all affected by chance. There is absolutely positively no way to avoid that. All we can do is work the odds and create a robust system that can adapt to the inevitable things we have not predicted.

Re taking action - both doing something and not are choices with consequences. If I was sure what to do, I would do that. As it is in the real world, we can only create systems that work on probability.

Roy

Illegal logging happens in places with weak property rights and or government rules that make it difficult for property owners to use their resources. This is the paradox for some people. In a civilized place, like Virginia, where we have a long tradition of property rights and good practices, we have virtually no illegal logging and our procedures protect water, soil and wildlife.

Posted by: C&J at June 11, 2012 5:16 PM
Comment #346547

“in a civilized place…” Ahhh! That’s where the rub comes in, C&J.

50k killed in Mexico in support of our some $100B drug biz.

Iraqi oil reserves at a terrible cost of lives and dollars.

Miami skyline developed at a terrible cost of lives during the 80-90’s.

Shark fin soup and depleting of fish species to feed our appetites.

Environmental damage producing oil for our cars.

The Corpocracy seems to tolerate most anything so long as the violence is controlled at an acceptable level??..

And, globalism has encouraged large corporations to operate offshore where they can pollute and exploit at will while protecting their profits from taxation and so on.

Stephen, would paying farmers to not grow crops fit your definition of ‘running interference’? Or subsidizing the likes of ADM to grow crops?

C&J, what can be salvaged from a forest fire like the one going on in the midwest? Would the gov’t assist you if you if you lost a tract to fire?


Posted by: Roy Ellis at June 11, 2012 6:43 PM
Comment #346548

Roy

Government would not assist me if my trees burned. I could take a loss on my taxes. Some people think that is a subsidy, but if you lose $1 and “get out of” paying $0.28 on money you never got in the first place, it really is not much of a deal.

I understand that lots of people think there is some kind of special deal that comes with owning land. If there is, nobody has told me. Government conservation programs are cost share, i.e. I have to put up some money to get government to help me to do something that otherwise I could not afford to do.

Let me give an example. I got some state money for pre-commercial thinning. I had to pay 40%; they paid 60%. I paid state and Federal taxes on that. They did it as a general control mechanism for the pine beetle. Thinning benefits me and others in the state. They figured my benefit was worth around 40% and the general benefit the rest. I made no money on this. In fact, it cost me $6000. Presumably there is the benefit of avoiding the pests.

It is much like a vaccination program. Should government subsidize vaccines?

I will just say this. At least in tree farming where I live, you cannot make money from government programs. If you buy forest land in hopes of reaping government benefits, you will end up with holes in your shoes.

Posted by: C&J at June 11, 2012 7:15 PM
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