June 2013
SLB aims to grow markets
Legislature wraps up after 100 days
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(Note: AFA Executive Committee Member Aubra Anthony, CEO of Anthony Forest Products and SLB board member, made a presentation about SLB to the AFA Board of Directors at its May 3 meeting.)
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he Softwood Lumber Board (SLB) is an industry-funded initiative established to promote the benefits of softwood lumber products in outdoor, residential and nonresidential construction. The softwood lumber sector has been working its way through a very difficult set of market conditions in recent years. Overlaying the economic issues is a steady decline of market share as homeowners, builders and architects select alternative products. Plastics, composites, steel, cement and other non-renewable resources have engaged in sustained, aggressive and effective marketing campaigns designed to grow market share for their products at the expense of solid-sawn lumber. This steady erosion of wood’s market share has gone unchecked for decades. Previous efforts to tackle these issues have been fragmented and shortlived, and the industry has not been able to sustain the leadership and support necessary for a turnaround. The check-off program is designed to change that. The goal of the checkoff program is to grow softwood lumber markets and profitability in the U.S. markets. Learn more online at: www.softwoodlumberboard.org
Max Braswell AFA Executive Vice President
t took 100 days to complete the work of the 89th General Assembly— the longest legislative session since the Great Depression—and the Arkansas Forestry Association was there every step of the way.
During those 100 days, legislators tackled some of the toughest issues in memory, particularly, legislation that will allow 250,000 eligible Arkansans to obtain private health insurance using federal Medicaid dollars. Gov. Mike Beebe signed into law HB 1219, which gives the Department of Human Services authority to spend hundreds of millions in federal funds on the program, and HB 1143 and SB 1020, which create the program once it receives federal approval. The battle over Medicaid defined the session, as passage of revenue stabilization (the State budget), bills to bring the Big River Steel project to the state, a $100 million-plus package of tax reductions, and other related bills, including SB 5 hinged upon legislators approving the historic approach to health care. Forest Fire Protection Tax Senate Bill 5, which is now Act 1391, increases the forest fire protection tax by $.05 per acre and will raise approximately $700,000 in added annual revenue to support the maintenance, operation, and improvement of the Arkansas Forestry Commission in its statewide program for the detection, prevention, and suppression of forest fires. The increase will mean $2 in additional taxes for every 40 acres for forest landowners. AFA supported the increase and worked closely with State Forester Joe Fox to educate legislators on the benefits
of SB 5, which uniquely, was one of the first bills filed in the session and one of the last approved by the legislature. Sen. Bill Sample (R-Hot Springs) sponsored the bill. Rep. Jeff Wardlaw (D-Warren) carried the bill in the House. The other unique aspect of SB 5 was its tie to HB 1039, also by Rep. Wardlaw. In a case of politics at its best, Republican legislators who signed the “Tax Payer Protection Pledge” received permission in a letter from Americans for Tax Reform President Grover Norquist to vote for SB 5, which is considered a tax increase, if they also voted in favor of HB 1039, which is now Act 1441. This new law will have a positive impact on forestry as well, as it provides a sales tax exemption for utilities used by qualifying agricultural and qualifying aquaculture and horticulture equipment. A nursery unit falls within the definition of a qualifying agricultural structure, and within the definition of qualifying horticulture equipment is a cooling unit, collection units, and irrigation equipment. Rep. Ken Bragg (R-Sheridan), AFA treasurer and Executive Committee member, worked with Rep. Wardlaw to include forestry in the bill. Logging Equipment Sales Tax Exemption Another huge win for the timber and forest products community was the passage of SB 299, now Act 1402. Congratulations to Larry Boccarossa and the Arkansas Timber Producers Association for their diligence and endurance throughout the session— and the past 10 years—in seeing this legislation through. Another bill that had to wait on the puzzle pieces of Medicaid and the tax package to come together, SB 299 took its final step to the Governor on day 98 of the session. The new law, which will be effective July 1, 2014, amends language to allow a full exemption from sales tax of all gross receipts or gross proceeds derived from the sale of machinery, new and used equipment, and related attachments that are sold to or used by a person engaged
See ‘LEGISLATURE’ on page 3
CALENDAR June 1
South Central Arkansas Log A Load For Kids Feaster Park, Arkadelphia
June 5 Program Committee Meeting 10 a.m. – Arlington, Hot Springs
June 6 Membership Committee 10 a.m. – AFA Office, Little Rock
June 6 Tree Farm Inspector Database Training 1 - 3 p.m. School of Forest Resources Monticello Contact: Jennifer Lambert (501) 374-2441 jlambert@arkforests.org
June 17-21 Teacher Conservation Tour Monticello
June 25 Tree Farm Inspector Training For new inspectors or those wanting a refresher; registration required UA Cooperative Extension Service Headquarters, Little Rock Contact: Jennifer Lambert (501) 374-2441 jlambert@arkforests.org
July 11 Executive Committee Meeting 10 a.m. – AFA Office, Little Rock
August 3 Drew County Log A Load For Kids First Assembly of God, Monticello
October 1-3 68th AFA Annual Meeting Embassy Suites, Little Rock
Annual meeting to focus on forest technology, health, economy
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he 68th AFA Annual Meeting is set for October 1-3, at the Embassy Suites in Little Rock. This year’s meeting will focus on issues related to forest Technology, Health and Economy—THE Annual Meeting. AFA’s Program Committee has been working diligently since the beginning of the year to plan informative sessions and enhanced networking opportunities. Following is the agenda of topics and speakers. Tuesday, October 1 8:30 a.m. – 5 p.m. Recreational Activities Noon – 6 p.m. Registration Noon – 1 p.m. Women in Forestry Networking Lunch Noon – 6 p.m. Exhibitor Set-up 1 – 4 p.m. Landowner Workshop Regeneration Opportunities Dr. Gordon Holley, LA Tech, School of Forestry Quail Management Clifton Jackson, AR Game & Fish Commission Forests for the Future Allen and Ginny Nipper, Nipper Mgt. Services 5 p.m. AFA Board Meeting 6 p.m. Opening Reception 7:30 p.m. Dinner on Your Own
Wednesday, October 2 7 – 8 a.m. Exhibitor Set-up 7:30 a.m. Registration and Continental Breakfast 8:30 a.m. Market Update Rick Holley, CEO Plum Creek Timber 9:15 a.m. New Technologies – Mobile Apps/Tools Bill Hubbard and Daniel Drummond So. Reg. Ext. Forestry Center 10 a.m. Break
10:30 a.m. Logging Panel Danny Dructor, American Loggers Council Doug Teal, Domtar Frank Wilson, Wilson Bros. Noon Luncheon 1 p.m. Reforestation Dr. Jimmie Yeiser UA Monticello 1:45 p.m. Benefits of Forest Certification Kathryn Fernholz Dovetail Partners 2:30 p.m. Break 3 p.m. Forest Health Panel Chris Davison, USFWS Dr. Jim Smith and Dale Starkey, USFS Dr. Tamara Walkingstick, UA Cooperative Ext. Service 6:30 p.m. Fish Fry C.A. Vines 4-H Center
Thursday, October 3 8 a.m. Awards Breakfast 11 a.m. Door Prizes, Silent Auction Adjourn
Early-Bird Meeting registration (by September 13) will be $145. This includes sessions, breaks and meals. Additional costs include the recreational activities and Women in Forestry lunch. Watch for registration information this summer. AFA has a special group room rate of $86/ single; $126/double at the Embassy Suites. Make reservations by calling Embassy Suites at (501) 312-9000 and refer to the “Arkansas Forestry Association Annual Meeting” to receive the special group rate (deadline September 6). A variety of sponsorship opportunities are available, as well as exhibit space. Please contact AFA Administrative Director Jennifer Lambert at (501) 374-2441 or jlambert@ arkforests.org for more information.
AFA partners with Forest2Market to offer discount on market guide Track timber value with access to local market prices from Forest2Market
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landowner with 250+ acres of timber was approached with two separate offers, each for about $22,000. Since the offers were in the same ballpark, he was tempted to sell. Instead, he subscribed to the Timber Market Owner Guide and discovered the true value of his timber. The result: he ultimately sold his timber for $47,000 and made an additional $25,000 on the sale. One subscriber received an offer of $4 per ton for her pulpwood. Because she had access to the trend graphs in the Timber Owner Market Guide, however, she knew pulpwood prices were trending upward. The result: she rejected the offer, waited a few more months, and realized several thousand dollars more than the earlier offer. Timberland owners use Forest2Market price services to: • Track and estimate the value of their timber
Time timber sales to optimize profit Know, when it’s time to harvest, that bids reflect real market prices Determine the value of timber on the date of acquisition for tax purposes
Based on the timber price database, the Timber Owner Market Guide is a bi-monthly report that aggregates two months of pricing data for 39 different micromarkets in three regions across the U.S. South. Each report contains: • Two-month weighted average stumpage prices, by wood basin (micromarket), for pine sawtimber, chip-n-saw and pulpwood and for hardwood sawtimber and pulpwood • Stumpage price trend charts • A market outlook covering industry news affecting supply and demand • A helpful information column covering forest management and harvesting best practices See sample and subscription information below.
TO SUBSCRIBE Visit www.forest2market.com/shop/add_item_tomg/263, select your state and county, hit “Add to Cart,” and enter the Discount code on the next screen. As an AFA member, you’ll receive a $25 per year discount on a one-year subscription or a $50 discount on a threeyear subscription.
‘LEGISLATURE’ cont. from page 1 primarily in the harvesting of timber. The previous law allowed an exemption on the first $50,000 of the purchase. AFA was proud to support this legislation and to work with ATPA throughout the session. Feral Hog Bill AFA also worked to help pass HB 1478, which is now Act 1104. Referred to as the “feral hog” bill, Act 1104 focuses on the transportation of feral hogs in Arkansas and should make their movement much more difficult. The bill was amended from its original form to grandfather in five hog hunting ranches in the state, to make them adhere to Livestock and Poultry Commission regulations, and to make them “terminal facilities,” among other stipulations. No other such operations may come into existence and no other transportation of live feral hogs will be allowed. AFA worked with a coalition of organizations in support of legislation that would make a positive impact on this growing problem. AFA also successfully worked to quell initiatives that it deemed unproductive for the timber and forest products community. Among those were efforts to create a task force on forestry and undefined forest issues, which would have required the Arkansas Forestry Commission to staff the task force, taking away resources that are needed to provide services to private forest landowners. Also, the association voiced its concerns over proposed legislation to change the way members of the Arkansas Forestry Commission are selected. The 89th General Assembly was a strong one for forestry, agriculture and business in general. There were several important business tax initiatives that gained favor that will benefit forest products manufacturers. And, importantly, AFA heightened its profile during the session through a daily presence at the State Capitol, and by hosting two successful legislative receptions with a great group of sponsors.
Deltic enjoys the benefits of diverse assets
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he story of Deltic Timber Corporation is one of strategic timberland ownership and management, efficient manufacturing operations, and the realization of the highest and best use of selected Deltic properties for residential and commercial real estate development. With its beginnings at the turn of the 20th Century, Deltic has long understood the value of diverse assets. From consolidated forestry operations starting in the early 1900s, to the location in the 1970s of two sawmills serving distinctive Arkansas land bases, to the formation of its real estate development operations in 1990, Deltic has focused on adding value to the land and to Arkansas. “Our strength is in the quality and diversity of our assets,” said Ray Dillon, president and CEO of Deltic. “Our core asset of 453,200 acres of well-stocked Southern Pine timberland makes up the backbone of the Company’s consistent earnings from planned, sustainable-yield harvests.” Deltic adds value to its timber assets
development in Little Rock, currently hosts over 30 neighborhoods containing in excess of 2,600 home sites. Commercial land sales, including Arkansas’s newest and largest open-air lifestyle retail center, The Promenade at Chenal, as well as the new St. Vincent West medical complex, bodes well for the future success of this quality development.
through the productive and efficient operation of wood products manufacturing facilities, including dimension lumber sawmills located in Ola and Waldo, and a medium density fiberboard plant, Del-Tin Fiber, in El Dorado. Within these multiple facilities, Deltic is able to balance production with market changes, taking advantage of opportunities created by an ever-changing supply-versus-demand environment. The company’s real estate holdings in Pulaski and Garland Counties are diverse, as well. Chenal Valley, a 4,800-acre planned
Deltic is helping grow Arkansas as it adds value to the economy and the investments of its shareholders. And with the beginning recovery of the national housing market and its positive impact on the performance of Deltic’s quality assets, Deltic itself is poised for growth. This is particularly true when you consider the company’s Woodlands segment, where in 2012 Deltic acquired 10,000 acres of Arkansas timberland, and provided over 606,000 tons of pine sawtimber to Deltic sawmills. Deltic is a natural resource company made up of quality assets that are as supportive of one another as they are diverse. As such, Deltic is well positioned to take advantage of an improving economy.