“Good stewards of your timber for over 30 years”.

Burns Forestry

IP TIMBERLAND SALE

 

             International Paper Company announced agreements with two separate investor groups to sell 5.1 million acres for approximately $6.1 billion ($1,196 per acre).  The sale follows IP’s plan to focus on uncoated papers and industrial and consumer packaging, while selling its wood products operations and timberlands.  About 1,300 forest resource professionals oversee their lands.  Some will continue to manage the lands under the new ownership.

             Resource Management Systems, Inc. (RMS) of Birmingham, Alabama is leading an investment group including Forest Investments Associates (FIA) of Atlanta, Georgia to purchase 4.2 million acres for $5 billion ($1,190 per acre).  About 3.77 million acres are in the South and 440,000 acres in Michigan.  The agreement includes a 20 year fiber supply agreement for I-P’s pulp and paper mills in the South; a 10-year fiber supply agreement for I-P’s coated paper facilities in the Lake States and a 10-year fiber supply agreement for I-P’s wood products facilities.

             Timber Star of Atlanta, a subsidiary of Istar Financial of New York, purchased 900,000 acres in Louisiana, Texas, and Arkansas for $1.1 billion ($1,222 per acre).  This includes a 50-year fiber supply agreement for I-P’s pulp and paper mills and a 30-year fiber supply agreement for I-P’s wood products facilities.

             The supply agreements will allow IP to capture about 20 percent of its annual softwood fiber requirements for their pulp and paper facilities from the timberland sold.  This is slightly lower than previous levels.  As much as half of the proceeds may be used to reduce debt, which stood at $12.2 billion on December 31, 2005.           

             Upon closing of these sales and sales to conservation groups, I.P will have sold 5.4 million acres or about 85 percent of its U.S. forestland holdings for about 6.5 billion.  This is probably the largest private forest land sale in U.S history.

 

USFS LAND SALE OUTCRY

 

             President Bush’s announcement to sell public lands over 5 years to raise funds for struggling rural economies is now facing stiff competition.  The President proposed selling 300,000 to 400,000 acres of Forest Service land identified as being difficult to manage, in order to raise $800 million.  Approximately 4,400 acres of the 675,658 acres of National Forests and Grasslands in Texas would fit into this category.

             Selling public land immediately received much outcry from the public, as well as Congressional members in both parties.  The issue appears to be dead for this year.

 

USFS PAYMENTS TO COUNTIES

 

Twelve East Texas Counties will share $4.8 million disbursed by the U.S. Forest Service based on the National Forest acreage in each county.  The payments are in lieu of taxes and are dedicated for rural roads and schools.

The distribution is : Angelina, $295,666; San Augustine, $369,985; Jasper, $106, 123; Shelby, $569,059; Sabine, $914,628; Montgomery, $256,687; Walker, $291,383; San Jacinto, $323,616; Trinity, $702,810; Houston, $979,201; Nacogdoches, $47,439; and Newton, $17,027.

 

2005 LUMBER PRODUCTION

            

             The Southern Forest Products Association (SFPA) reported a record 19 billion board feet of southern pine lumber production in 2005 - 5% over 2004.  Treated lumber production increased to 7 billion board feet.  Arkansas and Georgia remained the top two producing states.  Increases were driven by new residential construction and also by remodeling which hit record levels in 2005.

 

OSB

 

             North American structural wood panel production set a new record in 2005, at 43.1 billion square feet (3/18-inch basis).  OSB production was up 3.1 percent form 2004, while plywood output declined 2.0 percent.

             Five lawsuits, however, were filed naming eight major OSB producers as defendants: Ainsworth Lumber, Georgia-Pacific Corp., J.M Huber Corp., Louisiana Pacific Corp., Norbord Inc., Potlach Corp., Tolko Industries and Weyerhaeuser Company.  The suit alleges the manufactures conspired to curtail production to control OSB prices from Jun 2002 to March 2006.  The named plaintiffs are Sawbell Lumber Co., Norwood Sash & Door Manufacturing Co., Columbare Inc., West Lumber Co., and Frontier Lumber Co. Inc.

 

HURRICANE AFTERMATHS

 

             According to the Texas Forestry Association’s Ron Hufford, “In Texas, what we harvest in a year and a half in 43 counties, that hurricane put on the ground in 10 or 12 counties.

             In response to the Katrina/Rita hurricane season, Louisiana Pacific has converted its mill in Silsbee, TX. from siding production back to OSB structural panel production.

 

WIND-RESISTANCE

 

             Hurricane Katrina damaged about 1.2 million acres of forest land in Mississippi on August 29, 2005.  This is the equivalent of about two years worth of annual harvest.  Most severely damaged were hardwood bottomlands, pine saw timber, and recently thinned pine stands.

             Two pine plantations, both thinned about four years ago, were studied to assess the damage on the three different pine species planted in both plantations.  Only 16 percent of loblolly pines were undamaged, while 5Z percent of the slash pines were undamaged, and 64 percent of longleaf were undamaged.

             Most of the damage to loblolly and slash pines was snapped trees which usually degraded from chip-n-saw products to pulpwood.  Most of the damage to longleaf, however, was either from leaning or blown over trees.  These hold their value much longer.  These results suggest that slash and longleaf pine are more wind-resistant south of Hattiesburg, MS.

 

ARTHUR TEMPLE DIES

 

             Arthur Temple, Jr., former chairman of Temple-Inland, died April 12 in Lufkin, TX at the age of 86.  Temple was the grandson of T.L.L. Temple, founder of Southern Pine Lumber Co.  Temple began his career with Southern Pine Lumber as a bookkeeper and became manager of the Diboll operations in 1948.

             He subsequently became CEO of the company, then known as Temple Industries, which became a public company listed on the New York Stock Exchange in 1969.  The company merged with Time, Inc. in 1973 and Temple was named as a group vice president and board member, and was vice chairman from 1973-1978.

             Temple was instrumental in a major restructuring at Time, resulting in a new public company, Temple-Inland with national headquarters in Diboll.  Temple served as chairman emeritus from 1991-1994.

 

ED WAGONER DIES

 

             Ed Wagoner, Father of the Texas Forestry Museum, died on March 27.  He served as the Executive VP of the Texas Forestry Association (TFA) for 28 1/2 years before his retirement in 1983.  He led TFA during the tree planting period and he actively supported the American Tree Farm Program and the Texas Reforestation Foundation.

 

 

 

 

 

 

FORESTSRY NEWSLETTER SPRING 2006