December 14, 2023
Dear Friends:
As another year draws to closure, I trust our greeting finds you in a joyful, festive, and positive state of mind. This is a special time of year, as we anticipate and enjoy the blessings of Christmas and the other many blessings we are fortunate to have and enjoy. All we need to do is block out those things that consume us on a daily basis and focus on our good fortunes.
I trust the following will be of interest to you:
1. Davis Young joined our company this year and is fully involved in our fieldwork. Davis is a native of Columbia County and a graduate of Brewton Parker College, where he was a baseball player. We look forward to your having contact with and getting to know Davis.
2. Thirty years ago, timberland had a very narrow scope, i.e. land, trees, property tax. Fast forward to 2023, and we continue with the three items above, plus Conservation Easements, endangered species, CUV and FLPA tax programs, carbon sequestration/credits, Best Management Practices, burning permits, timber tax, hunting leases, etc. The bottom line is timberland investments continue to be positive with all of the above, and I see a bright future.
3. Renewable/green energy continues to fill news sources. This concept is positive yet subjective. Two 6 and 7 figure timberland acquisitions in 2022 and 2023 are managed 100% for carbon sequestration. A percentage of the acreage is located in poor timber markets and challenging logging conditions. This is good utility of this type timberland but has minimum impact as far as increasing sequestration.
4. In the Southeast, carbon credit contract payments have not matured. With impressive growth in our pine plantations due to genetics and establishment procedures, committing these stands to long term carbon contracts with restricted tree removal may not be economically feasible.
5. Suitable weather conditions for prescribed burns are limited. It is becoming more difficult to obtain Georgia Forestry Commission burn permits when smoke on public roads and rural homesites are considered.
6. Graphite is a required ingredient in electric vehicle batteries. An Australian company has developed a process where wood chips and waste can be turned into synthetic graphite. I look forward to more information on this new process.
7. The Joro spider from Asia has made a home in Georgia. The black and yellow spiders are large and prolific web builders. The good news is they are harmless.
8. The value of single family homes continues to increase, with a current median price of $392,000. This increase is due to a lack of supply. At present, two-thirds of home mortgages are 4% or less, with 73% having a 30-year term. With existing costs and 7%+ interest rates, affordability has clobbered the residential market.
9. Today, new homes are more affordable for first-time buyers than existing homes, as new home construction costs have declined. This trend is substantiated by Berkshire Hathaway purchasing $800 million in U.S. homebuilding stocks in 2022.
10. Lumber markets have been active with prices peaking in April with a low point in June. Lumber prices have shown steady increases from October to date.
11. Timber sales have been strong and successful during the year. Inventories of purchased stumpage have diminished for suppliers and sawmills. Demand has worked in our favor, and this should continue into 2024.
12. Southern Pine Beetle infestations have been present in areas generally north of I-20. As spring approaches, we will be vigilant and let you know if we observe any activity.
13. In a recent Wall Street Journal editorial, “First they come for our cars, then the cows”, relates how livestock contribute 32% of the world’s methane. The U.N. is proposing taxing foods based on their carbon footprint, attempting to make red meat more expensive. There is no question I am far from giving up my ribeye steak on Saturday night cooked on my charcoal Weber grill.
14. Georgia is fortunate to have the Savannah and Brunswick deepwater ports. Collectively, these two ports represent a $122.4 billion impact on our economy. This includes export and imports of agricultural and products produced from our forests.
15. The population of Georgia grew 10.6% between 2010 and 2020. This positive growth, which will continue, is putting pressure on our natural resource of land. In the last legislative session, Georgia is offering farmers a cash incentive, pre-paid upfront, to have a permanent conservation easement placed on their land. This is motivation to preserve farmland for food and fiber production.
16. Cross-laminated timber continues to show growth and demand. In Atlanta, the Ponce City Market is built from Southern Yellow Pine grown in Georgia, which is a first using mass timber locally grown. The four-story building is hopefully the start of additional mass timber projects.
17. We applaud and compliment each of you for the excellent stewardship and forest management you practice on your land. Rest assured your timberland is sustainable, both for you and generational owners.
In addition to my lack of understanding of Bitcoin and cryptocurrency, I can add artificial intelligence to the list. I truly believe in this electronic era that my list will grow longer rather than shorter.
The New Year brings a general election from small municipalities to our federal government. Whatever the results, I trust they will be positive and beneficial for the United States of America as our country continues its world leadership position.
On another note, there is a cardinal rule that, “You never brag on your bird dog”. With that said, I am not disappointed in the progress of my young dog, Annie. We truly thank you for our friendship and relationship that we have developed over the years. Our best for a blessed and Merry Christmas and happy, healthy, and prosperous 2024.