CONIFER PLANTATION - Pre-merchantable Timber
Planted mostly 1996, the woodlands consist mainly of Douglas Fir, Oregon's most valued lumber tree. The trees are healthy and growing rapidly. Commercial thinning (selective harvest) may occur around 2016. This is a 'growing' investment that increases in value every year until harvest. Ideally, the site would never be clear-cut. The owner should selectively log and replant after each harvest to achieve a perpetual forest. There is plenty of room to plant more trees on the property.
Forest surrounds and separates pastures
The owners planted more than 18,000 trees from 1994 through 1997. Of these, 16,400 were planted in 1996. Approximately 39 acres contain an estimated 450 trees per acre.
The average age of the trees is currently 16 years old. Selective harvests should occur whenever rapid growth slows due to competition for space and sunlight. Commercial thinning harvests can begin around 2016 and should continue in at least 20 year intervals. Larger, taller trees generate maximum revenue from logging.
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The plantation is managed for a sustainable forest for perpetual harvest.
Most of the trees were planted under a cost-share agreement. This pilot program enabled a carbon-producing power company to receive carbon-offset credits through sequestration in growing trees.
The property owner OWNS all of the trees and retains all logging revenues. The agreement is documented in a 65 year Management Plan in the form of a stewardship easement. The plan calls for management of the trees using sustainable forest practices. The landowner's goal was to achieve perpetual timber through periodic selective harvests and replanting.
Spacing is good. Most of the trees are not planted in rows.
Conservation Easements are a common and accepted method of protecting the conservation value of rural lands. In all cases, ownership of the land remains with the property owner but use of the land is restricted in some manner.
The Carbon Offset Stewardship Agreement for this property was (at the time) a pilot project. Today, it applies in the 'Cap and Trade' theory. In short, a carbon producer (i.e. coal burning utility company) can offset environmental impact of carbon emmissions by sequestering carbon in tree plantations.
In the agreement for this property:
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The landowner owns the trees and retains all earnings from harvest
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The utility company owns the rights to greenhouse gasses sequestered in the trees.
Terms are:
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The term of the agreement is 65 years
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The site will be fully stocked at approximately 350 trees per acre 'free to grow' after the first 5 years
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Trees will be managed under prudent sivicultural practices
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The owner will make reasonable efforts to protect the stand from premature harvest and damage by fire, wildlife, insects and disease.
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Neither party is required to replant (continue the agreement) should losses occur from circumstances beyond the landowner's control
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The landowner will use a sustainable approach to forestry and harvesting through,
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Pre-commercial thinnings between ages 12 and 15 years
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Commercial thinnings at approximately 20 year intervals
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Residual trees remain free to grow
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The owner will maintain a minimum estimated volume of cubic feet of wood volume on the site. This volume gradually increases as the trees mature.
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If the landowner clearcuts or deliberately destroys the stand prematurely, he will repay the 75% cost-share portion ($14,080) plus 5% compounded annually up to the date the trees were harvested, or up to 40 years from planting, whichever is earlier.
High-value farmland produces fast-growing trees.
The actual volume of wood exceeds the minimum requirement, because,
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Approximately 434 trees per acre were planted under the agreement in 1996
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350 tres per acre were expected to survive the first 5 years
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Survival rate was almost 100%
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The trees are growing faster than expected
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The stands are of consitently high quality, therefore, pre-commercial thinning was not required.
First commercial thinning (harvest) may occur in approximately 2016,
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subject to owner's determination of best lumber market and benefit to the plantation.
Harvest revenues can exceed the plan because actual stocking and growth rates are greater than expected.
If a property owner can afford to forego farm income while trees become established and grow to merchantable timber, the return on a timber investment can be higher than conventional farm crops.
A residential appraiser will not allocate value to ​woodlands and the asking price for this property does NOT include value for the trees.
In consideration of planting and holding costs, the forest industry generally accepts the value of a fully stocked, immature stand of trees to range from $2,000 - $2,500 per acre. Therefore, the minimum value of approx. 39 acres of trees is $78,000 - $97,500.
In a very short time, a new owner will begin to capture the mature-timber value of this plantation through logging revenue.
Net earnings from this site will be greater than most because logging and hauling costs will be minimal. The terrain is easy and the site is very close to a mill.