Welcome to 2012. It always seems that the new year brings challenges and changes. That can be good and bad. It always depends on weather you are looking up or down on what you see. This past year I have seen a dynamic shift in the use of timberland. The shift has been to convert timberland back to farmland where it was suitable. With commodity prices at record levels and the long term outlook for timber not what it needs to be for a strong return on your investment, land diversity is a must. We started clearing and converting some timberland in 2010 to cropland and have continued on in 2011. I believe this trend will continue on for the next few years as our farmers ramp up to feed and supply the rest of the world. The opportunity we have is to take some of our better timberland and convert to higher and better use as farm land. This will give us a quicker return on our investment in yearly rentals and increase the value of our land.
We have also developed a new machine to help in the clearing with the farm land. The machine is called the StumpCat. This machine is designed to remove the stump by grinding it into chips in the ground. This process saves time and money over conventional clearing. We are very excited about this machine and the options it offers the landowners over conventional clearing. If you have any questions are interest please call us and we will setup a demo for you.
We all need to be aware at how the markets are changing in the world for our timber industry. Pulp and paper mills are being built all over the world, but none here in the United States. That does not bode well for our future. I see us exactly where the textile industry was 20 years ago. I am sure 20 years ago no one would have ever believed that the textile industry would have left our country. It seemed it happened over night. I now see the same transition with the pulp and paper industry beginning to happen. There has not been a new mill built in this country in over 30 years. I also see new mills, new infrastructure, new companies all investing in other countries everyday. Every trade magazine I receive in the mail is about the development in South America. They have an eleven month growing season, cheaper labor, abundant natural resources and are gaining ground on the building of infrastructure daily. We need to be making plans on how and what we are going to do to compete on a world market because that is our competition.
Until next time, siting in the shade, Terry