MESSAGE FROM THE PRESIDENT
The bad news is that it has been five years since you last received the NEFCo newsletter. For that I apologize. It was never our intention to have such an extended time between newsletters; however, time seems to move so quickly and the next thing we knew, five years had passed.
The good news is that NEFCo is committed to resume publishing the newsletter. Historically, we have received very positive feedback about the newsletter and we will do our best to continue the tradition.
Our roots date to 1944 with the establishment of the New England Forestry Foundation (NEFF), a non-profit land conservation organization. For many years, NEFF retained foresters on staff to assist private landowners in the management of their lands.
In 1994, NEFCo was established as a subsidiary of NEFF and staffed by its foresters. In 1999, these foresters purchased NEFCo from NEFF and converted to an employee owned company. NEFCo and NEFF continue to have a close relationship, with NEFCo foresters assisting with the management of lands owned by NEFF.
In essence, the foundation of NEFCo is about to celebrate its 70th anniversary. Over that time, NEFCo’s primary mission has not changed and we will continue to provide high quality professional forestry services to private landowners.
Thank you for taking the time to read this newsletter, and should you have any questions or comments please do not hesitate to contact us.
Respectfully, Tony Lamberton, President
GREEN CERTIFICATION UPDATE
Back in 2002, NEFCo made the decision to become an FSC® Certified Resource Manager. This essentially allows private landowners to join NEFCo’s FSC® green certification pool at a significantly lower cost than would be incurred if being individually certified.
NEFCo is subject to an annual third party audit to insure that the green certified properties are being managed in a sustainable manner and in accordance with FSC® standards. At the time of the 2014 third party audit, NEFCo will have more than 40,000 acres of land in their green certification pool.
If you would like more information about green certifying your land, please contact your nearest NEFCo forester.
CURRENT USE AND HARVESTING REGULATIONS
For some states, the past few years have seen significant changes or attempted changes to current use programs and/or harvesting regulations while other states have seen very little activity. Vermont appears to be pretty active while Maine, New Hampshire, Massachusetts, and New York have been pretty quiet.
In Vermont, a number of bills have been presented before the State Legislature over the last few years that have the potential to have an extensive influence on timber harvesting. H. 329 passed the Vermont House in 2012 and contained a significant change to the UVA land use change tax. The argument for this change was to discourage “parking” of properties in the program prior to developing the property.
The Senate chose to conduct “listening sessions” throughout the state prior to acting on the bill. After the conclusion of the listening sessions, the Senate has produced its own version of H. 329 which is significantly different than the house version. The Senate version dropped the land use change tax alteration; however, it proposes a savings cap or limit on a per acre basis along with a few other changes. NEFCo foresters John McClain and Tony Lamberton have both spoken before Senate members about H. 329. At the writing of this article, the Senate has not voted on its version of the bill, and if passed as written, the bill would need to be sorted out in a conference committee between the House and Senate.
House Bill 587 has been introduced which seeks to repeal the law that gives any town the right to declare a right of way across one person’s land to allow another person to remove wood from his/her property. The town has discretion on whether to exercise the right. It appears that the bill may die in committee on the basis of testimony.
Senate Bill 100, the forest fragmentation bill, was introduced and has the potential to create additional regulatory burdens on forestland through ACT 250, regional planning, and municipal planning. It would appear that after taking testimony, the bill will probably not get out of committee.
In 2013, the Vermont Legislature passed Act 24, requiring the Commissioner of Forest, Parks, and Recreation to develop voluntary harvesting guidelines that may be used by private landowners to help ensure long-term forest health and sustainability. The process has started with the formation of an Advisory Committee. The Department and Advisory Committee will offer multiple opportunities for public comment. “Of all the things done by the legislature over the past few years, I believe Act 24 is the one for which I have the most concern”, stated NEFCo President Tony Lamberton. “I would not be surprised to see a bill in the near future that would make these “voluntary” guidelines mandatory on lands in the UVA program and then eventually for all lands in Vermont.”
New Hampshire’s current use program has basically remained unchanged over the past few years. New York’s current use program (480-a) has unfortunately also remained unchanged. The New York program is one of the most onerous programs in the nation; therefore, there is limited appeal to enroll in the program.
In Maine, new shoreline regulation measures overseen in many towns by the Maine Forest Service tend to place additional costs on the operational planning of timber harvests. Additionally, the Maine Forest Service is taking a closer look at selected woodland properties in the Maine Tree Growth Tax program to ensure that these properties are being managed in accordance with the 10-year forest management and harvest plans written specifically for them.
Just about every year, bills are presented in state legislatures that have the potential to affect a landowner’s ability to manage their land. While some may be appropriate, many are not and we encourage all of our clients to be vigilant concerning these various bills. NEFCo is continually at the forefront providing information, counsel, and opinions to legislators; however, landowner action is also necessary.
We encourage all of our clients to join the respective landowner organizations in the appropriate state in order to keep abreast of various threats and to have a voice in the decision making process. Please contact your NEFCo forester for information concerning the various landowner organizations.
LEASING TAPS
Many people believe that the objective of a consulting forester is to grow timber for his/her client. In fact, the primary objective of a private consulting forester should be to manage a clients’ woodlot in a manner that meets the landowners’ objectives.
Ten years ago, it is highly unlikely that I would have ever encouraged a landowner to tap his/her sugar maple trees for sap production. Back then, the loss in timber value due to the tapping was significantly more than what could be earned tapping the tree. Needless to say, things have changed quite a bit.
Maple syrup production has been dramatically increasing and there is a high demand for tap lease opportunities. Whether or not leasing taps is a good idea is dependent on a number of variables; however, the option is certainly worth exploring.
Like most forestry decisions, the first question that needs to be answered is the long-term objective of the landowner. How long is the landowner going to own the land and what are the projected financial needs of the landowner? Does the landowner need an immediate influx of cash, or a continual regular cash flow? If a landowner is looking for immediate revenues, cutting the timber will almost always be more lucrative for the landowner. However, if the landowner has a longer time horizon, in many instances, leasing taps will be more profitable. Additional variables for consideration are the current diameter of the trees, the quality of the trees, the size or extent of the tapping zone, current growth rates and current stumpage prices. Veneer should not be tapped; however, the answer is not so definitive when it comes to lower grade sawlogs.
In southern Vermont, it is not uncommon for landowners to receive a lease payment based on $1.00 per tap. A good sugarbush will contain between 80 and 100 taps per acre; therefore, the potential is for a landowner to receive between $80 to $100 annually per acre. This dollar amount should draw a landowners’ attention.
To allow tapping or not to allow tapping is not an all or nothing proposition. While tapping will cause defect in the lower log, there is still value in the tapped tree. The upper logs will have value, and some have made the argument that a tapped log has a niche market for furniture. That is a pretty small market, and in most cases, when doing an analysis, I will significantly discount the value of the tapped log.
A tap lease is a significant commitment. Most leases run at least ten years and some even longer. A lease does not prevent the proper management of the woodlot; however, thinning will need to be coordinated with the maintenance done on the tap equipment. Additionally, most leasers need at least 2,000 taps to make the investment viable and the landowner needs to understand that in most cases the tapping operation will consist of tubing and vacuums and not the picturesque buckets traditionally associated with a sugaring operation.
In a newsletter article printed a number of years ago, I discussed the concept of “crop tree release” management. One of my arguments for the consideration of this management technique was that it essentially diversified the landowners’ timber portfolio. The same reasoning holds true in relation to tap leases.
Leasing taps is not for everyone; however, it is worth understanding the concept. Leasing may diversify your land management portfolio and may be an additional way to get the highest rate of return from your land investment. If you have any questions concerning the cost/benefits of a tap lease arrangement, please contact your nearest NEFCo forester.
TIMBER MARKET WATCH
2013 was a pretty good year as far as timber prices were concerned. As the year progressed, hardwood sawlog prices increased in almost all markets. This was especially true for Northern red oak, sugar maple, and ash.
Our Maine foresters indicate that hardwood sawlog prices did increase in Maine towards the end of the year, but just as important they did not see any restrictions or quotas which allowed the movement of a significant amount of wood. White pine prices saw a minimal increase; however, word is that some of the Maine pine mills want to increase production in 2014 which should increase prices and/or limit the delivery restrictions. In 2013, pulp prices in Maine stayed pretty steady with very limited restrictions or quotas. Our foresters are a little concerned about the pulp markets remaining open without restrictions in 2014 due to some mill sales. This is something that they will be keeping their eyes on.
The New Hampshire foresters also saw an increase in hardwood sawlog prices with some grades of Northern red oak increasing 30% to 40%. White pine has remained steady; however, it does not appear to be the species of choice right now. Pulpwood markets were pretty stable or increasing for hardwoods, while the hemlock pulp market went down. Like other areas in New England, Vermont has seen an increase in hardwood sawlog prices. In southern Vermont, sugar maple sawlog prices increased three times within a two month period resulting in an average increase of around 30%. Hardwood veneer prices are still strong; however, no significant increase was seen in 2013. If anything some of the specifications may have been relaxed.
One of the largest increases seen in Vermont was in pallet log prices for Northern red oak and sugar maple seeing significant increases. White pine prices have stayed stable. In the fall, rumor was that many of the white pine mills were filling up and going to go on quota which probably steered operators to concentrate on hardwoods which in turn allowed pine prices to remain steady.
Based on historical records, our Manchester, Vermont center has calculated that the center is seeing the same prices that were seen around 2008. This may sound discouraging; however, the prices being seen today are some of the better prices we have seen in a few years.
NEFCo president Tony Lamberton states, “Things are looking better than they have for a while. I understand that landowners are looking for prices like those we saw during the housing boom, but I just don’t believe that is a reasonable expectation. That was a blip on the radar, and fun while it lasted, I don’t expect to see those types of prices again for a long time. It is a pretty good market right now. While we need to pay attention to the normal cycle of price changes due to species and time of year, for the most part, the market is pretty strong.”
PERSONNEL CHANGES
Over the years, one of the things about NEFCo that tends to remain pretty constant is the personnel. While there is an occasional person leaving or a retirement, for the most part, our personnel stay with the company. Over the past five years, we have had a couple of changes.
Fred Huntress fully retired in February of 2013. Fred had been with NEFF or NEFCo for 55 years.
Don Feeney of the Oxford Hills Center semi-retired in 2012. Gregory Seamans was hired to become the manager of the Oxford Hill Center in Bryant Pond, Maine. Greg worked with Don and has taken on more responsibilities as Don eases into retirement. Greg holds a BS in Forestry from U. Maine-Orono, where he was a Dean’s List student and received the Presidential Achievement Award. Greg’s forestry experience includes working as a forest inventory technician for Irving Woodlands in Maine, and working for our company during his summer vacations from college.
William Caveney joined our Monadnock region office and works closely with Dennis McKenney and Daniel Reed in the south central region of New Hampshire. He is a forest technician and is assisting with timber cruising, marking, and boundary jobs as well as surveying work. Before coming to NEFCo, Billy worked at High Tech Harvesting LLC in Loudon, NH. He graduated in 2008 from the University of New Hampshire Thompson School of Applied Sciences and then, in 2010, he earned a B.S. degree in Forestry from UNH.
NEFCo has always strived to hire quality personnel. Both Greg and Bill have exceeded our expectations and we are very excited that they are members of the NEFCo staff. We also recognize what an integral part of our long-term success our retiring foresters are. Both Fred and Don afforded us the opportunity to execute a smooth transition and they continue to be available to NEFCo to assist in various projects if called upon.
A QUESTION FOR OUR READERS
We are currently in the midst of a debate as to how to distribute the newsletter. Some prefer to distribute the newsletter via e-mail and on our webpage while others would do the same, but additionally distribute hard copies in the mail. Obviously, it is significantly less expensive to send the newsletter via e-mail than to send a hard copy.
Right now we will be doing both; however, if receiving the newsletter via e-mail is acceptable to you, please subscribe to the newsletter on our webpage at www.cforesters.com. Subscribe by filling out the block located in the lower left-hand corner of the Welcome page. Thank you.