Tag Archives: alternative
Woodland Values Rise In Line With Timber Demand
Gemma Mackenzie Thursday 08 August 2013 Strong capital appreciation and a buoyant outlook for the long-term timber market continue to drive demand for woodland. Commercial spruce plantation values have typically risen 30% over the past two years and amenity woodland price rises are not far behind, according to chartered surveyor John Clegg & Co. “People are viewing commercial forestry, typically large plantations of spruce in Scotland and the north of England, in a similar way to agricultural land. Long-term capital appreciation is the key driver, with forestry outstripping most other investment classes,” said John Clegg from the company’s Buckinghamshire office. “Investors are also looking at medium- to long-term global commodity prices, which are forecast to rise sharply as the recession ends and global population continues to rise.” Forestry management was more straightforward than agriculture, adding to its attraction, he said. “It also costs less to invest per acre and ticks the same taxation boxes as farmland, provided it can be shown to be commercially managed.” Commercial spruce plantation values averaged £6,000/ha, allowing for open ground and other species, said Edinburgh-based colleague Patrick Porteous. Pure lowland stands near to harvest could fetch £15,000/ha, he added. “For the past five years we have seen phenomenal growth in capital values, around 14% a year, mainly due to the value of timber, which has risen substantially since the early 2000s,” he said. “We have seen a shift in global timber trends with China absorbing a lot of output from Russia, Eastern Europe and Scandinavia. Although the UK still imports 65-70% of its timber requirements, rising transport costs and demand from new housing, plus a relatively stable exchange rate, should mean good returns for home-grown spruce.” A looming shortage of domestic supply was fuelling optimism, said Mr Porteous. “We have not seen nearly enough planting since 1988 – as the average rotation is 35 years, UK timber supply is going to tail off.” He believed that created a real opportunity for growers in accessible areas in southern Scotland on marginal land. “A lot of this area is ideal spruce country and growers stand to get very good returns. These plantations also provide good livestock shelter and have been shown to provide an extra month of grass growth.” More remote areas could also cash in. Loch Duagrich Hill, 430ha of highly attractive hill ground on the Isle of Skye, provided a good opportunity for an investor prepared to offer more than £485,000, he said. It had significant Forestry Commission grant income, allowing the new owner to plant and create mixed woodland with hill grazings, stalking and loch fishing. Amenity woodland values generally range from £8,500-20,000/ha, with smaller parcels near population centres and/or with sporting rights at the upper end, added Mr Clegg. “Like farmland, many people like the idea of owning woodland, and smaller blocks of mixed or broadleaved woodland offers lifestyle and amenity benefits,” he said. The 7.44ha Callins Wood, near Minehead, Somerset, at the more commercial end of the scale, was heavily stocked with valuable mature conifers and ready to yield immediate thinning income, he said. It is priced at £100,000 or £13,400/ha. Ash dieback remained the one big unknown in this sector. While prices for woods containing a small percentage of the species were unlikely to be affected, the picture was less certain where ash was more prevalent. “It will depend how much disease is found this autumn – we may see quite an increase in reports as people have become more aware of symptoms. The age of trees is also important – older trees will take several years to be affected and you can still use the timber,” said Mr Clegg. Outlook for timber The latest Timber Bulletin from forestry consultant and management company UPM Tilhill highlights the improving market, underlined by a 4% rise in UK processors’ market share to just under 45% of volume. Investment in forestry continues to provide outstanding returns compared to practically any other investment, said timber operations manager Peter Whitfield. In 2012 the return on investment was 18.3%, according to the IPD Annual Forestry Index, and the annualised return over the past 10 years was 16.3%. The latest National Forest Inventory Report had taken a more rigorous look at the private forest sector and estimated that overall softwood availability would average 16m cu m a year for 25 years. That, said Mr Whitfield, was an encouraging forecast. “There is no evidence of a shortage, although supply and demand is closely balanced.” Although clearance of commercial woodland, for example for heathland restoration and wind farms, was a concern, there was good evidence the level of timber market activity should continue as it has for the past few years. This will be driven by favourable exchange rates, continued investment and growth of domestic processors, available timber and the demand for biomass, said Mr Whitfield. Continue reading
Grain Futures Mixed Ahead Of USDA Supply Report
Aug 12, 2013 Investing.com Investing.com – U.S. grain futures were mixed to lower on Monday, as traders looked ahead to a closely-watched monthly U.S. supply and demand report due later in the session, which is expected to show record production prospects for U.S. corn and soybeans this season. Market players also continued to monitor weather conditions across grain-growing regions in the U.S. Midwest and in the Great Plains. On the Chicago Mercantile Exchange, corn futures for September delivery traded at USD4.6363 a bushel, down 0.4%. September corn futures hit a session low of USD4.6188 a bushel earlier in the day, the weakest level since October 4, 2010. The September corn contract settled down 1.65% at USD4.6560 a bushel on Friday as improving U.S. weather and crop prospects in the U.S. Midwest and Great Plains-region drove prices lower. Weather forecasting models continued to point to near-perfect temperatures across most parts of the U.S. Midwest during the next few days, easing concerns over potential U.S. crop damage. The USDA said nearly 64% of the U.S. corn crop was rated in ‘good’ to ‘excellent’ condition as of last week, significantly higher than the 23% recorded in the same week a year earlier. Nearly 11% of the corn crop was in ‘poor’ to ‘very poor’ condition, compared to 50% recorded in the same week a year earlier. Meanwhile, wheat for September delivery traded at USD6.3200 a bushel, down 0.2%. Prices of the grain hit a daily low of USD6.3063 a bushel earlier in the session, the weakest level since June 18, 2012. The September contract settled down 1.2% at USD6.3340 a bushel on Friday. The USDA said that nearly 87% of the winter-wheat crop was harvested as of last week, up from 81% a week earlier and above the five-year average of 86% for this time of year. Elsewhere on the CBOT, soybeans futures for September delivery traded at USD12.2775 a bushel, up 0.8%. The September contract settled down 0.75% at USD12.1840 a bushel on Friday. Prices of the oilseed remained supported amid indications of strong demand for U.S. supplies from China. China is the world’s largest soybean consumer, accounting for nearly 60% of global trade of the grain. Prices of the oilseed fell to USD11.8687 a bushel on August 5, the weakest level since January 31, 2012 amid improving U.S. weather and crop prospects in the U.S. Midwest and Great Plains-region. According to the U.S. Department of Agriculture, approximately 79% of the U.S. soy crop bloomed as of last week, up from 65% in the preceding week. The report also showed that nearly 64% of the soy crop was in ‘good’ to ‘excellent’ condition as of last week, significantly higher than the 29% recorded in the same week a year earlier. Corn is the biggest U.S. crop, followed by soybeans, government figures show. Wheat was fourth, behind hay. Continue reading
Feeding The Planet: Beyond The £250,000 Hamburger
The creation of the world’s most expensive fast food is proving to be a distraction from the real problem facing global menus Share 17 Email Editorial The Guardian , Sunday 11 August 2013 By creating the world’s most expensive hamburger last week , Professor Mark Post and his team also engineered a savoury distraction from the real problem on the planetary menu: how to feed a population fast closing in on 10 billion. It is an issue that gets ever more serious. Consider: Britain, France and Germany produce 12% of the world’s wheat harvest, yet yields per hectare, which have almost trebled in one human lifetime, are no longer rising . These three countries are blessed with rich soil, good rainfall, long summer days, sophisticated agricultural science and all the fertiliser they need, so if yields are no longer increasing, then crops may be reaching their biological limit. In Japan and South Korea, rice yields may also be reaching a plateau. In the Middle East, where agriculture and civilisation began in symbiosis 10,000 years ago, grain yields have started to fall because water supplies have begun to dwindle: Iraq, Syria, Yemen and Saudi Arabia have all seen wells dry, and aquifers depleted. India, China and the United States rely on irrigation to sustain high crop yields but may be depleting groundwater faster than it can be replenished. Altogether, 18 countries may not have enough water to go on growing more and more grain: around 3.6 billion people live in these countries. That is about half the population of the planet . By 2050, the number of mouths to feed will have increased by 2 billion. As food supplies dwindle, and demand increases, food prices will rise: that is how markets work. But 2 billion people already survive on an income of less than $2 a day: almost a billion people go to bed hungry each night right now; 2 billion are, according to UN calculations, in some way malnourished. As food prices rise, so will political discontent. The Arab spring began with unprecedented rises in food prices; riots followed in Tunisia, Egypt and Libya . It is this chronology that enables some to argue that citizens can bear governmental incompetence, corruption and even oppression, as long as they can be sure of their supper. Add to this several other ominous trends. One is climate change: analysts who looked at 21 studies of civil war, ethnic conflict and street violence in modern societies found a consistent link with drought and high temperature in all 21 cases . Since many climate change projections forecast a 2C rise in average global temperatures some time near mid-century, and since crop yields tend to fall with extremes of temperature, this is not good news, for food security or for civilisation. There are other problems. One is waste. About 2m tons of food are lost every year: the crop never gets to the market in the poorest countries, or it is scraped off the plate and into the bins in the richest nations . Another is the switch from food crops to biofuel: in 2011 as gasoline prices rose, 127m tons – a third of the US grain harvest – were diverted to the production of ethanol. For the US farmers, it looked like a bargain: a $2 bushel of corn could be turned into 2.8 gallons of ethanol at $3 a gallon . But the grain to fill the tank of an American sports car just once would be enough to feed someone for a whole year: this is the market economy at its most grotesque. As incomes rise for the middle classes in the developing nations, so does global demand for meat and milk . The switch from staple crops to cheeseburgers signals both a soaring obesity epidemic and higher prices for grain: two disasters for the price of one, three if you chuck in the burning of the tropical forests, the settlement of the savannahs and the extinction of wild species to make new space for livestock. There is a clear need for concerted political action at an international level: to change the direction of agriculture, produce more food more sustainably and distribute it more fairly. That way, everybody is better off. Governments know this, because they see food security as one of the grand challenges of the century. Yet what, actually, are they doing about it? And are they doing enough? Sadly, we already know the answer. Continue reading
