Economic Outlook - [Excerpted from the October 2007 Economic Outlook]
The Federal Reserve’s September rate cut of 0.5 percent will do little to alleviate disruptions in either the credit or housing markets, according to Forest2Market’s analysts. Instead, it is likely to cause more serious inflation problems down the road.
Tighter lending standards in the wake of the credit crunch are exacerbating the housing downturn, and any relief that Southern forest products manufacturers may have expected from export orders has yet to arrive, despite the dollar’s continued depreciation against other major currencies.
With the general economy also slowing, the forest products industry has few options but to hunker down and wait out the storm – though emerging markets such as wood fuels and carbon credits could provide a boost. For more information,
Southern forests provide alternative energy
As U.S. policy officials look for ways to reduce the nation’s dependency on foreign oil and Europe strives to reduce greenhouse gas emissions, Southern forests are emerging as a renewable and clean energy alternative.
Pine trees throughout the South are increasingly being viewed as a major alternative energy source. Also, the forest products industry is well-suited to become a major supplier to the growing ethanol market as advancements in technology are made and the United States looks for a substitute for petroleum.
Meanwhile, oil and natural gas prices continue to rise. And more people are becoming aware of the environmental consequences of greenhouse gases, sparking a move by individual states and private companies to voluntarily reduce carbon emissions.
“A perfect storm is developing for the future of wood fuels,” said Scott Twillmann, senior analyst for Forest2Market. “The world’s quest for cleaner and renewable energy is going to have a substantial impact on Southern forest markets.”
For more information, click here.
Stewart to discuss carbon credits at world summit
Forest2Market founder and CEO Pete Stewart will speak at the 3rd Timberland Investing World Summit in New York on Oct. 29. Stewart will give an overview of the structure of the US voluntary carbon trading market. He will discuss its strengths, methods of securing credits and potential risk to investors.
The summit, which will be Oct. 29-31, brings together investors, international institutions, educators and government officials to discuss the most pressing issues in the forest products industry. Forest2Market is one of the sponsors. For more information, click here.
Marginalization of the small, non-industrial private forest landowner
Small timberland owners can benefit from state forestry and national landowner association membership. Growing populations and urban expansion are tirelessly aiding the conversion of timberland to other uses. Large landowners are gaining market influence as the average acreage of small landowners decreases, and the gap between large and small forest landowners is widening.
Non-industrial private forest landowners have about 24 acres on average, which is expected to drop to 17 acres by 2010. Small tracts of timber are generally more costly to harvest and consequently less attractive to buyers. Loggers are also less likely to offer premiums for small tracts that guarantee logging work for only a few days. Landowners however, can add value to their timber by improving stand quality. Higher quality stands are often produced by using more intensive forest management practices that yield a faster-growing, better-formed tree.
Additionally, small non-industrial private landowners have less representation in forest landowner policy matters, which is why it’s important to be involved with state forestry and national landowner associations. Acting for a large body of stakeholders, these associations lobby state and federal government for the best interest of small landowners.
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