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Timber Facts

Although timberland is a relatively new investment for many investors, it is not a new investment asset.  Timberland is one of the oldest forms of investment, and the domestic forest products industry is an extremely important component of the U.S. economy.  Our quality of life is highly dependent upon the diversity of products produced from timber resources.  Everything from the lumber we use to build our homes, to the way we package our food, is based on forest resources.

 

It is important to note that timberland cannot be overbuilt.  As an example, commercial real estate was overbuilt in the 1980s, resulting in decreasing value and returns for investors.  Timberland is finite.  The ability to increase the timberland investment supply can only happen over longer investment cycles.

 

The following statistics illustrate the size, complexity and diversity of the forest products industry.

        The U.S. forest products industry is the largest in the world.  It accounts for 9% of total U.S. manufacturing shipments.   

        The industry ranks in the top 10 for manufacturing employers in 46 states, and employs 1.8 million people industry-wide (about 10% of manufacturing employment). 

        The industry produces products valued in excess of $230 billion each year, including $23 billion in exports. 

        Two-thirds of the United States forestland (about 504 million acres) are classified as “timberland” i.e. forestland capable of growing 20 cubic feet of commercial wood per acre per year.  The annual growth of America’s commercial forests exceeds harvests by 47% each year. 

        In excess of 258 million acres of forested federal land have been set aside by government agencies for use as wildlife refuges, parks, and wilderness. 

        More than 95% of the bark and wood residues generated from lumber and plywood manufacturing are used to generate energy (electricity and heat) and create other products, which virtually eliminates waste. 

 

Source: Timbervest




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