Christmas Trees- A worldwide demand all year round
Christmas trees are usually planted at more than 2,000 trees are per acre. On average 1,000 to 1,500 of these trees will survive. Maturity for harvest usually is determined after the trees reach six to seven feet in height. Christmas trees often are “baled”, tied or similarly wrapped to protect the branches and retain the shape and overall quality of the tree during shipping. 2-3 seedlings on average are planted for every harvested Christmas tree.
Reports show that North America cuts 40 million Christmas trees annually, with 3 to 6 million trees cut from Canadian Christmas tree farms. This suggests that Canadian share of the North American Christmas tree production can range from 7% to 15%. In 2004 Canada had a production of 3.9 million trees valued at $62 million of which $36.2 million was generated by 2.5 million exported trees. Quebec accounted for over 30% of this production. The New Brunswick Christmas tree industry is reported to have 350 active growers putting to market approximately 0.5 million trees annually which generates revenues around $10 million.
Prices for pine (currently $6-$9 per tree wholesale) are generally lower than prices for Fir ($20-$25 per tree wholesale).
In 2005 the retail market value of the 32.8 million trees purchased in America at the average purchase price of $41.90 was $1,374 million. Almost all trees require pruning management (shearing) to attain proper branch and fascicle (twig/needle) density and a proper cone-shaped Christmas tree shape. Plantation production is the best system for delivering the regularly scheduled pruning, water management and general care necessary to produce the highest-quality product.
It can take up to 15 years to grow a tree (dependant of species and growing conditions) of average retail sale height (6 - 7 feet) or as little as 4 years, but the average growing time is generally 7 years.
Monday, 18 August 2008
Thursday, 14 August 2008
Forestry Investments more flexible than traditional funds
Forestry investments more flexible than traditional funds
A stock market expert has published a report that analyses the benefits of specialist exchange traded funds (EFTs), such as those that enable people to make forestry investments.William Wordie, writing for the Press and Journal, claims that forestry investments and other EFTs are growing in popularity because people can spread their investments easily and at a much lower cost than traditional funds.Wordie cites an academic study from 1986 which showed that the vast majority of returns could be explained by asset allocation. ETFs such as timber investments allow investors to easily target an asset class, with more flexibility and accuracy than either an index or actively managed funds. Timber and forestry investments offer investors transparency, efficiency, and above all flexibility:Efficiency comes from with low annual management fees with no hidden costs. There are no fees for buying or selling forestry investments other than those charged by the stockbroker. Transparency comes from the continuous access and competitive bid prices. It is the same as trading single stocks in this respect. Finally, flexibility comes from trading size. A forestry investment is possible from just one share upwards and it's easy to trade shares through a stockbroker. Forestry and timber investments can be included in Isas (Individual Savings Accounts) and Sipps (Self Invested Pension Plans) for tax benefits.
A stock market expert has published a report that analyses the benefits of specialist exchange traded funds (EFTs), such as those that enable people to make forestry investments.William Wordie, writing for the Press and Journal, claims that forestry investments and other EFTs are growing in popularity because people can spread their investments easily and at a much lower cost than traditional funds.Wordie cites an academic study from 1986 which showed that the vast majority of returns could be explained by asset allocation. ETFs such as timber investments allow investors to easily target an asset class, with more flexibility and accuracy than either an index or actively managed funds. Timber and forestry investments offer investors transparency, efficiency, and above all flexibility:Efficiency comes from with low annual management fees with no hidden costs. There are no fees for buying or selling forestry investments other than those charged by the stockbroker. Transparency comes from the continuous access and competitive bid prices. It is the same as trading single stocks in this respect. Finally, flexibility comes from trading size. A forestry investment is possible from just one share upwards and it's easy to trade shares through a stockbroker. Forestry and timber investments can be included in Isas (Individual Savings Accounts) and Sipps (Self Invested Pension Plans) for tax benefits.
Grants for forestry under threat in Ireland
Forestry grants under threat in Ireland
The Department of Agriculture for the Irish Republic has announced that it will not be approving any new applications for forestry grants this year.The move has sparked fears that eco-friendly initiatives like the Forest Road Grant Scheme, which allows farmers to build access roads to their plantations, will face the chop. It's possible that woodland reconstruction and improvement programmes could also be under threat. A spokesperson from the Department of Agriculture denied that forestry support schemes would be scrapped, despite a recent announcement of 9.1m Euros of cut-backs. A forestry industry source spoke to The Irish Independent to say that the move to restrict forestry funding would damage confidence in the industry, particularly when many growers' plantations approaching first thinning.The source said: "This will have serious implications for the ordinary forest owner who will now be concerned about where funding will come from next year. Particularly worrying is that forestry is a long-term investment with rotations up to 35-40 years, and even longer for broadleaf species."Already, the Government has fallen far short of its 1996 strategy, which set out a target of 20,000ha of plantings each year. Last year, the level of planting stood at 7,000ha, and this year it's expected that it could be even lower, at 6,500ha."
The Department of Agriculture for the Irish Republic has announced that it will not be approving any new applications for forestry grants this year.The move has sparked fears that eco-friendly initiatives like the Forest Road Grant Scheme, which allows farmers to build access roads to their plantations, will face the chop. It's possible that woodland reconstruction and improvement programmes could also be under threat. A spokesperson from the Department of Agriculture denied that forestry support schemes would be scrapped, despite a recent announcement of 9.1m Euros of cut-backs. A forestry industry source spoke to The Irish Independent to say that the move to restrict forestry funding would damage confidence in the industry, particularly when many growers' plantations approaching first thinning.The source said: "This will have serious implications for the ordinary forest owner who will now be concerned about where funding will come from next year. Particularly worrying is that forestry is a long-term investment with rotations up to 35-40 years, and even longer for broadleaf species."Already, the Government has fallen far short of its 1996 strategy, which set out a target of 20,000ha of plantings each year. Last year, the level of planting stood at 7,000ha, and this year it's expected that it could be even lower, at 6,500ha."
Wednesday, 13 August 2008
How to maximise forestry investments
How to maximize forestry investments:
Investing in timber may be considered an "alternative" form of investment, but in reality the practice is no different from investing in stocks, bonds or property. Whatever the nature of the investment, one is looking for the asset to provide a healthy ROI over a certain time period. A forestry investor, therefore, should always consider the quality of potential cash flows. For example, if a walnut is worth twice as much as a pine, but is harvested less frequently, the decision to go for pine might seem obvious. However, if a single walnut generates 10 times the cash flow of a single pine, then a walnut harvest could generate five times the return of pine over a 30 year period. So, if pine is worth $100 per tree and there are six harvests in 30 years, the investor would gain $600. If a walnut tree is worth $1000 and is harvested three times in 30 years, the investor stands to gain $3000, making walnut a far more attractive investment proposition. Timber investments also depend on the availability of different types of tree over time. For example, pine trees in Australia are set for exponential growth, so a single tree will likely be worth less money in 15 years than it is today. Black walnut trees, on the other hand are becoming increasingly rare, so their value is increasing.
Species vary from country to country and this of course also affects growth rates, return on investment, and risk.
For an investment in Sitka spruce say in Ireland (although there is very little historical data to base the returns on) the general consensus from qualified and reliable sources such as the report entitled "Growing for the future- a strategic plan for the forestry sector in Ireland" and the Irish unit forestry trust (IFUT) indicate that 5%-7% (including land costs) is achievable anything higher will probably be pie in the sky. Returns from forestry are expressed as real rates of return over and above the rate of inflation. Most speakers at the "Irish Forestry Industry Chain" (IFIC) indicated returns of 5-7% and also it was indicated that returns can be higher if there is no associated land costs.
However in some emerging markets generally located in South America, the longer growing season coupled with fast growing species such as Eucalyptus can produce returns as high as 20%
These returns have been well documented by local government and independent research over a number of years.
Above all if you want to maximize you returns from forestry, Make sure that you deal with a qualified professional using quantified data and not just some undirected unqualified individual.
Investing in timber may be considered an "alternative" form of investment, but in reality the practice is no different from investing in stocks, bonds or property. Whatever the nature of the investment, one is looking for the asset to provide a healthy ROI over a certain time period. A forestry investor, therefore, should always consider the quality of potential cash flows. For example, if a walnut is worth twice as much as a pine, but is harvested less frequently, the decision to go for pine might seem obvious. However, if a single walnut generates 10 times the cash flow of a single pine, then a walnut harvest could generate five times the return of pine over a 30 year period. So, if pine is worth $100 per tree and there are six harvests in 30 years, the investor would gain $600. If a walnut tree is worth $1000 and is harvested three times in 30 years, the investor stands to gain $3000, making walnut a far more attractive investment proposition. Timber investments also depend on the availability of different types of tree over time. For example, pine trees in Australia are set for exponential growth, so a single tree will likely be worth less money in 15 years than it is today. Black walnut trees, on the other hand are becoming increasingly rare, so their value is increasing.
Species vary from country to country and this of course also affects growth rates, return on investment, and risk.
For an investment in Sitka spruce say in Ireland (although there is very little historical data to base the returns on) the general consensus from qualified and reliable sources such as the report entitled "Growing for the future- a strategic plan for the forestry sector in Ireland" and the Irish unit forestry trust (IFUT) indicate that 5%-7% (including land costs) is achievable anything higher will probably be pie in the sky. Returns from forestry are expressed as real rates of return over and above the rate of inflation. Most speakers at the "Irish Forestry Industry Chain" (IFIC) indicated returns of 5-7% and also it was indicated that returns can be higher if there is no associated land costs.
However in some emerging markets generally located in South America, the longer growing season coupled with fast growing species such as Eucalyptus can produce returns as high as 20%
These returns have been well documented by local government and independent research over a number of years.
Above all if you want to maximize you returns from forestry, Make sure that you deal with a qualified professional using quantified data and not just some undirected unqualified individual.
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