TheLandJournal.com

We’re seeing it all over. Timber companies are selling their land, often so it can be developed. Every year, as demand for rural land rises in many hot spots, these timberland companies cash in and try to turn their profits back into purchasing land elsewhere, which means that any cheap farmland or hunting land that is available for sale may soon be put into the cycle of producing lumber.

Plum Creek Timber Co. reports that 30-35% of their cash flow is from real estate sales. It is important to note that the stage of timber growth directly affects the value of the land to these timber companies: if an area has 25+ years of timber growth, then it’s as ripe as it gets and is ready to be harvested; but if its growth is much under 25 years, then while it can still be used for smaller-dimension lumber or for the pulpwood used in making paper, harvesting it is not nearly as profitable.

Can a timberland company operate without looking like the bad guy? Not likely. Just as people throw away trash and pretend that it just “goes away” and it isn’t buried next door to someone else, so many people are in just as much denial about the damage that they are doing when they buy wood, paper, and other products that are harvested from timberland. The best that these companies can do is to set aside conservation and recreational land under their own control. Keep in mind, though, that to be considered “conservation land,” timberland can still be worked by the timber company; it just has to be preserved from development.

There is a growing debate, too, about the harm that harvesting older forest areas does to wildlife that needs a specialized environment and can’t just be relocated elsewhere; so advocates for wildlife are compounding the pressures that timberland use already places on rural landowners and on the value of rural real estate.

So there you have it. Strong population growth; growing demand for wood products from timber companies; the general demand for rural land; wildlife needs; and our general need for good-quality air and water all are pressures that won’t go away anytime soon. What is obvious is that rural land prices will continue to increase, since with every new acre developed or worked, more and more people will realize the future value of our limited stock of land. It looks to me as if buying good rural land is like buying a stock that will never go down. How can you lose?