A decade. Well, close to a decade. Nine years. That’s how long I have been with Forest2Market. I started in April 2002, just 7 months after September 11 in the midst of the depressed dotcom-bust economy that followed. And here was a dotcom company that was hiring. Or so I thought. After meeting with Pete Stewart and the company (there were only 2 other employees), I realized quickly that F2M was not a typical over-hyped dotcom company. It was a company that had a quality service and product that it wanted to bring to the market. And I had the opportunity to get my foot in the door at its startup. So with a meager starting salary, no 401k plan, and the words, “most new businesses fail within 2 years,” ringing in my ears, I accepted the position of database forester.
Now, more than 9 years later, I’m Forest2Market’s Operations Manager. And I am writing one of the company’s first blog posts. Nine years ago, if someone asked me if I was a blogger, I would have said, “No, I’m not a logger. I’m a forester." I guess that’s just one thing that has changed during my “decade” here at F2M.
Another change I've observed over the course of my tenure here is the stumpage market. In 2002, the market was depressed (or what we thought was depressed compared to our current economic situation). In the summer of 2003, as the housing boom began to take off, the market began to skyrocket. By the fall of 2004 and winter of 2005, sawtimber (for an average 14-inch DBH) would sell in some markets for well over $52 per ton. In 2004, the salvage sales caused by Hurricane Ivan ripping through Alabama in 2004, and the 2005 Hurricanes Katrina and Rita devastating Mississippi and Texas/Louisiana respectively, hardly dampened the market. The latest downturn, which started when the housing bubble popped in early 2007, has created a stumpage market that is characterized by prices well below those we saw when we first started our service in 2002.
Another significant change has been in the timberland market, specifically the industry sell-off of company timberland. Louisiana-Pacific, Georgia-Pacific and Bowater were the very first to do this, prior to 2000. But I can recall one particular sale specifically, when Boise sold the remainder of its 2.2 million acres to Forest Capital Partners in 2004. I recall it “specifically,” because I can specifically remember how displeased my wife was when I was late to a Christmas dinner because I was helping one of the bidders with our price data. It did not help when I tried to explain to her how it was one of the largest timberland sales occurring in our industry and how it was perhaps one of the first times that our data and analytics would be used as an asset to the companies participating in the sale. At least that is what I thought, until International Paper sold what is the largest land sale since the Louisiana Purchase, divesting of its timberland base in 2006-2007, selling 5.1 million acres to RMS and 0.9 million acres to TimberSTAR. And since that time, as Weyerhaeuser and Potlatch have converted to REIT status and Temple-Inland has sold its timberland to The Campbell Group, I doubt that we will ever see land sales of that magnitude again in the US. The future will bring much smaller divestitures and/or consolidation of timberland through the consolidation of the REITs and TIMOs.
The sale of industry timberland has changed the landscape of the supply chain as well. Nine years ago, none of the REITs or TIMOs that sold timber on a delivered basis as far as I can recall. Plum Creek was the first to make this move around 2004-2005. While there were large wood suppliers, like Canal Wood, that sold wood on a delivered basis, this was the first time that a non-industry landowner that controlled the resource base began to deliver roundwood rather than selling it on the stump. Now, it is a model followed by several other TIMOs, and I suspect it will be adopted by the others in the future.
But outside of the housing boom/bust, the great timberland sell-off, and the movement to a delivered basis, it appears the latest development in our history is that of the emerging bioenergy industry. Within the last 2 years, this has grown from a small water-cooler discussion to an active and developing market. I can recall hearing of FRAM’s development of a pellet facility for European demand and thinking, “Oh well, that’s interesting.” Now, bioenergy developments are announced almost weekly, if not daily, and they range from pellets to co-generation, electricity, ethanol and biofuels. Perhaps the best example of how the market has grown is the development of Georgia Biomass’ pellet facility. Who would have guessed 9 years ago that a 1.5 million ton pulpwood consumer would want to enter and compete in the market in southeast Georgia, the largest pulpwood production area in the world? And no one would have guessed that their end product would be wood pellets for European consumption. Me included.
And so here we are: mid-2011. Like the last 9 years, the market is volatile and changing. Bioenergy is the new kid on the block. It will be interesting to see the next decade and the developments that occur in the industry and here at F2M. As for me, I will continue to provide our customers with the most accurate price information and business solutions in this ever evolving market. And I hope to provide you with some interesting blog posts along the way.
Daniel Stuber
Forest2Market: July 14, 2023
