Timber Tips is the name of our newsletter which is written in the Summer and Winter of each year. Our subscribers enjoy brief articles about Timberland, Tax Tips, and Wildlife. We hope you enjoy the articles below from the archive and invite you to join our on-line newsletter. Just enter your email address on the right menu bar to become a subscriber. Your email address will remain private as we do not sell or share your personal information. You may also unsubscribe at any time.
Why use a Consulting Forester?
Timber owners grow their timber for 25-30 years and then make a snap decision about selling it. To get top money for timber, it must be marketed at a good time and bids must be obtained. Selling is easy, but getting top dollar takes time and planning. Planning means: be knowledgeable of current prices, volume of timber and economic maturity, value of timber, advertising the sale to several buyers, and having a plan for regenerating the tract for future income. Questions that should be asked are? Does the tract need to be thinned or clear-cut? Does the timber need to be sold by the ton or lump sum? How wide should the streamside management zones (SMZs) be and how will they be designated?
Do the timber owners need someone representing them or will the buyer do all of the above, looking out for their best interests. Selling timber is a critical decision and can be “stored on the stump” if markets are poor. Demand and price are two critical factors. Valuable investments have been ruined, because the landowner thought they knew how to do it.
The best option is to let a professional consulting forester assist in making these decisions and getting what the timber is worth. This means getting more than one offer and a handshake.
A quality consultant will:
• Verify that the timber is economically mature
• Mail informative invitations requesting sealed bids. These invitations include volume, species, location, type and place of sale, etc…
• Prepare a written agreement to specify details on payment, insurance, location, performance deposit, time to harvest the timber, etc..
• Be fair but follow the contract according to landowner’s wishes
• Deal with reputable buyers
• Inspect sale area regularly
A forestry consultant is selling his services and can demonstrate that forestry is an economically sound business. An effective consulting forester usually more than compensates for his fee. The forester should be a Registered Forester, or a SAF member, or Association of Consulting Foresters member. This is an indirect indication of their qualifications.
Timberland as an Investment
Standard and Poor’s 500 over the last 45 years has produced an annual return of approximately 10.5%. Timberland, intensively managed over the same time, has generated an average annual return of 12%. Timber is also a hedge against inflation because it increases in price a little above the rate of inflation. It is an excellent investment for part of your portfolio, since it is more steady than Wall Street has been for the past 3 years.
Value from timberland is arrived from:
1. Growth – This means to plant the best genetic seedlings available, use herbicide and weed control chemicals, fertilize, thin whenever a stand analysis recommends to, and clearcut when financially mature.
2. Sale of timber – When selling the timber, competitive bidding yields the highest return.
3. Leases – Minerals, hunting, and other types of leases add to the value.
4. Land Appreciation – Is not controlled by the owner but by the market. Landowners control numbers 1, 2, and 3 only, and in order to maximize income a Forestry Consultant is invaluable.
The future looks good for timber products as population increases. Timber is a long term investment and must be held for several years to maximize returns. There are risks involved like in any investment.
Intensive management produces the highest rate of return. This means following a program that determines financial maturity for each stand of timber, planting the best seedlings available, removing the competing vegetation, fertilizing, and thinning at the appropriate time.
Future Looks Bright for Those Who Plan
Alabama is a leader in timber production. The timber industry is one of the top revenue and job producing industries in our state. One reason is the large amount of forest land contained within Alabama. Many people think that much of this land is owned by government agencies and large timber companies, however these two groups only account for 28 percent of the state’s forest land. The remaining 72 percent is owned by non-industrial, private landowners.
Unfortunately, private landowners do not always practice good forest management. In the past, many of these landowners would sell their timber and leave the land to manage itself. Often, these landowners – with little experience in timber marketing – did not even get a good price for the timber they sold.
Of course, there will always be movement in the timber market – both up and down – due to the general economy. Within the larger timber market, different types of timber (age, species, etc.) may see price variation because of changes in the end-use markets.
With these factors in mind, it becomes more important than ever for landowners to know exactly what they have before selling any timber. It’s also important to make plans for the future so that property can remain productive and serve as a source of income for years to come. This is where advice from a professional forester can be of tremendous help to the private landowner.
Managers, foresters, and employees of McKinley & Lanier Forest Resources have been assisting landowners with management, marketing and planning services for more than 26 years. We ensure that our clients receive the highest revenue possible for their timber by providing technical advice on how to care for the property.
Private landowners in Alabama are in a very enviable position. Their timber is valuable, and they have expert consulting services available to assist them in making the best use of their property for generations to come.
The future for landowners in Alabama looks bright. It is especially bright for those who practice wise forest management today to ensure a more productive harvest tomorrow.
Privet can be as bad as kudzu. It has become an invasive plant. Most privet today is Chinese privet and was brought to the U. S. in the 1850’s. One hundred years later it started spreading throughout the southeast. The privet seed is located in the dark purple fruit that hangs in clusters from the branches. Birds are the main culprit that spread the privet.
Privet can be controlled to some degree by burning, tractors with root rakes, saws, pulling the plants out of the ground, digging, and using herbicides. If you cut down the privet, use Garlon 3A on the stumps. Arsenal AC, Chopper, or Velpar L (1 quart per 3-gallon mix) can be used if you are not concerned about the adjoining trees. Don’t forget these three herbicides are soil active so be careful.
Basal stem sprays using Garlon 4 in a 20% solution and tree injection methods are good for the large stems over 1 inch in diameter. After the small stems are cut or mowed foliar sprays are good. The Farm Service Agency-EQIP program offers some financial assistance in controlling privet.
For more information contact our office.
Chemical Site Preparation is Beneficial
Site preparation is a procedure used to prepare an area for pine or hardwood regeneration. Chemical site preparation is generally more beneficial financially than the alternatives of mechanical or no site preparation at all. No site preparation allows competing vegetation to grow freely which will be a direct competitor for water and nutrients in the planted stand. The influence of this competition affects the survival and growth rates of crop trees.
Mechanical site preparation is usually a costly alternative that provides early control of competition, and looks good, but does not have long lasting effects. In order to get these long lasting effects mechanical site preparation must be followed by a chemical application in most situations. This adds even more cost to the investment. There are some significant disadvantages to the use of machinery in site preparation. Mechanical site preparation can increase soil compaction, increase erosion and sedimentation, and/or remove topsoil, all of which diminish site quality.
Chemical site preparation helps facilitate the regeneration process by killing unwanted vegetation found on the site. This vegetation may be residual hardwood trees, natural pine regeneration, and/or herbaceous plants. The reduction in competing vegetation frees newly planted seedlings to grow and gives them the ability to take advantage of all available nutrients. The effects of chemicals are generally long lasting on targeted species. This allows planted trees the opportunity to establish themselves and get a head start on the competitors located on the site. This in turn relates directly to an increase in the productivity of the site which leads to greater returns on investment. The cost of chemical site preparation can be high, however the gains in return on investment outweigh the initial costs.
The Best Way to Sell Timber
It takes years to grow timber, but some landowners sell it to the first person that comes along. It sounds like a lot of money, but is it the best you can do?
All timber companies and timber investment groups sell lump sum seal bid if they don’t use the timber at their own mills. There must be a reason for this. In order to maximize their timber income, they solicit 30-50 buyers to bid on their timber. Factors to determine if bidding is the best way to sell are: size of tract, quality of timber, clear specifications in the prospectus on what is being sold and a concise contract. The seller should gather ideas on how his timber should be cut. Most landowners do not like to pay a consultant fee. Universities show where landowners receive more profit even after paying a consultant fee, than they do by selling their own timber.
People do not realize when an offer to (bid) sell is sent to several companies, that some companies need the timber more than others. In other words, a timber consultant gives all companies an opportunity to bid or otherwise the seller only receives one price from one company.
Sure it costs to use a quality forestry consultant, but it is a “win-win” situation. The landowner receives more for his timber, has professional assistance in setting up the sale, and is worry free once the sale is completed.
Eliminate the Burden of Managing Hunting Leases
We manage hunting clubs by providing a written contract, collecting payments, verifying liability insurance, and handling problems for landowners who own 500 acres or more.
Natural Oak Regeneration
High quality oak is very hard to regenerate after a harvest. Before cutting, advanced oak regeneration must be present to start the new stand. Research shows that oak seedlings and saplings must be at least 3 to 4 feet in height if natural oaks are expected to be in the next stand. Smaller oak seedlings will become over topped by faster growing undesirable species and will die. The larger the advanced reproduction the better the chance of survival. Sprouting of young oaks, when cut, will also supplement the oak composition on the bottom land site. If the large saplings are knocked down during logging, they are capable of growing new healthy sprouts and doing fine.
Research has shown that if the site index in the bottom land is less than 70 oaks will tend to naturally regenerate themselves. However, most sites are above 70 and do not do a good natural regeneration job. Inspecting the harvest sight before cutting and determining species composition is the answer for success. Undesirable premerchantable trees in the understory could be injected with a herbicide, so they will not make up the next stand.
If there are not quality oak seedlings in the understory, artificial planting of seedlings could work, or advanced regeneration could be developed. Another method is to wait until there is fresh oak regeneration, then chemically remove the undesirable understory to allow some sunlight to reach the forest floor. Allow the oak saplings to reach 4 – 5 feet in height; this method can take 4 to 5 years to accomplish.
Which species of oaks should be planted in the bottoms? In well-drained soil: Cherrybark oak, Shumard oak, and Swamp Chestnut oak do well. On poorly drained flats: Willow oak, Water oak, and Pin oaks do best. If flooding is frequent then plant Overcup oak and Nuttall oak. If there is a moist site, but well-drained, then Northern Red oak is desirable to plant. One species of oak does not fit all types of sites.
Planting large bare root hardwood seedlings is recommended over containerized hardwood seedlings. Hardwood seedlings should be at least 2.5 feet tall. It is recommended to plant approximately 100 seedlings per acre.
Plant seedlings to the original level as they were in the nursery. All air pockets should be closed and seedlings should be straight.
Competition control is necessary for moisture and nutrients. This control can be before or after planting and can be chemical or mechanical for the next two to three years. Remember to plant the correct species according to the site, plant correctly, and control the competing competition for two to three years.
Sudden Oak Death
This fungus was found in California in the year 2000. Since that time a large nursery in California shipped infected camellias to over 1,500 nurseries in approximately 40 states. SOD fungus spreads by soil, air, roots, and water. It can cause trunk cankers which girdle and eventually kill the tree. Obvious symptoms are found on twigs and leaves of the trees, but normally do not kill the tree.
The most susceptible oak species are southern and northern red oaks. Infected plants have been discovered in Alabama. This fungus grows much faster in the southeast with our humid conditions.
In Alabama, the Department of Agriculture and Industries is the lead agency in delineating, controlling, and removing the fungus.
What’s My Timber Worth
That’s a question often asked foresters. In appraising the value of timber, several factors have to be taken into consideration; volume of timber per acre; the size and grade (quality) of the timber; access to the property; and local market conditions. To find out how much your timber is worth, contact McKinley & Lanier Forest Resources, Inc., whose foresters are experienced timber appraisers.
Access to the property is one factor considered in timber appraisals.
Timber quality is based on the number of knots or limbs on the tree. Lumber that is free of knots is worth more than lumber with knots. Therefore, the cleaner and bigger the tree, the more valuable it is because better grade lumber can be cut from it. Naturally, as a tree grows older it will increase in value as the volume of lumber increases.
Certified Boundary Surveys can be important to you
In today’s escalating market of land, timber, and mineral values, becoming a victim of timber trespass, mineral theft, and loss of land acreage through adverse possession can be extremely costly.
Consider the worth of your acreage. Certified boundary surveys help protect your property from intrusions. They help protect your investment. By reclaiming just two or three acres, a certified survey could pay for itself.
If your property lines are painted on trees or marked by an old fence, it would be advantageous to maintain them. Old lines deteriorate but good boundary line paint applied to the line trees will extend the life of your property lines for eight to ten years.
Soils and Fertilization
The quality of your soil influences the growth of your trees. This variance is affected by fertility, water drainage, texture (sand, clay, silt), depth of topsoil, and subsoil consistency. In the forest we measure “site index” on a given site at age 25 or 50 years in the south. With this measure we select dominate loblolly trees and by using their age, height, and graphs, we can determine what height that tree will be at age twenty-five or fifty. This tells us the site index for that specific spot. By sampling over the tract we arrive at an average site index for the tract.
In general most tracts average between 65-95 site index. In a managed stand of timber if the site index is 70, the timber value at age 40 would be approximately $2,000 per acre; if site index is 80 and the same age it would be approximately $4,000 per acre; and if site index is 90 and the same age it would be approximately $5,000 per acre. The quality of the soil does make a difference.
This is the reason large companies are fertilizing. They want to increase the site index. For example: Company XYZ is fertilizing their pine plantations four times during the life cycle of timber growth. They are fertilizing approximately every 8 years with 25 pounds per acre of DAP (Diammonium Phosphate) and 140 – 200 pounds per acre of Urea. This fertilizer is being aerial applied with a cost between $65 to $90 per acre. Soil and foliage tests help determine the amount of fertilizer to apply.
With proper amounts of fertilizer and good timing, a stand of timber should increase growth by 1/2 cord per acre per year. This will shorten rotation to 28 years rather than 32-35 years. In a control study a 6 year old pine plantation without fertilizer averaged 11 feet tall and with DAP, Urea and herbicides the test plot trees were 18 feet tall.
Southern Pine Beetle
Beetles run in cycles every five to twelve years. The Southern Pine Beetle kills more trees than fires, other insects, or diseases in the Southeast.
Usually, the insect attacks a tree damaged by high winds or lightning and gains entry through the wound. It lives under the bark and as spring arrives lays eggs. The tree is killed when the larvae enters the cambium layer and starts eating. Adults continue to emerge and move to other adjoining trees. These trees can stay green for several days to weeks before they turn brown.
Landowners should try to find someone as soon as possible to stop the spread. The two types of cutting practices to stop beetle outbreaks is cut-and-leave and cut-and-remove. Both methods are effective in reducing the number of pine trees killed. Markets are often so full that a person cannot sell his wood, so cut-and-leave is the only choice to use. If areas are susceptible to beetles the timber needs to be thinned ahead of beetle infestation.
Thinning Pine Plantations
A landowner initially plants too many trees with the idea that the trees will need to be thinned to maintain a healthy diameter growth. The first thinning occurs when the stand of trees is around 15-18 years old. The approximate income per acre with the first thinning is between $150-$200. This is the first of three cuttings on that particular stand of timber. The benefits of the first and second thinning is to remove trees that are overcrowded, diseased, forked, crooked, and trees with poor crowns. Thinning leaves space for the remaining trees to grow faster and larger.
Thinning also encourages natural grasses, understory growth for wildlife, and legume seeds for birds. Hardwood growth, such as sweet gums, also begins growing which competes with the planted pines for water and nutrients. Herbicides or prescribe burning on a regular basis can keep the hardwood competition to a minimum. This helps maintain the openness of the understory which encourages wildlife habitat.
We recommend clear-cutting every fifth row and thinning two rows on each side. If the contractor clear-cuts every 3rd or 4th row, he is removing too many trees and not selecting the best ones to leave for the future. If the rows are not visible, the cutter/operator still needs to clear-cut paralleling rows every 50 feet apart and thinning the remaining stand on each side of the clear-cut corridor.
Constant checking is important to be sure the thinning is proceeding as in the above paragraph. Don’t forget to leave the best quality trees for future sawtimber. Leaving 70 square feet of basal area produces a good stand of crop trees.
Most thinning contracts are for twelve months which gives the logger time to perform a good job, have a market for the wood, and harvest the area when it is dry, so as not to cause ruts and soil compaction.
The second thinning should be eight to ten years later when the crowns start closing and diameter growth slows. Both thinnings need to be done correctly in order to maximize value of the final harvest.
Why Have Some of My Pine Trees Died
Generally the first thought is the Southern Pine Beetle. However, that was not the case last summer. It appears that this summer will be similar to last year. The drought weakens the tree, slows the resin flow, and severely stresses the tree. Drought creates an ideal situation for the IPS ENGRAVER BEETLE.
The symptom of the Ips Engraver Beetle is similar to the Southern Pine Beetle. Pitch tubes will seep from the holes in the bark, but normally the holes are smaller than the Southern Pine Beetle. The Ips beetle attacks the upper portion of the tree, and the pitch tubes are reddish-brown in color. The feeding galleries under the bark are shaped in the form of a Y and H, whereas the Southern Pine Beetle feeding gallery is in the form of an S.
The Ips beetle usually infests only a few pines at each location. The infested area does not get as large as the Southern Pine Beetle areas. This past year the Ips beetle infested some pine stands heavily and killed more trees than usual. The insect attacks drought weakened and injured trees normally, and this is why it was so wide spread.
Controlling the outbreak is similar to the Southern Pine beetle control. This means cutting and removing all trees in a buffer around the infested trees or using an approved insecticide. Rain helps the situation and would greatly reduce the mortality because the pines could overwhelm the Ips beetle with resin.
The maintenance of healthy stands would reduce the damage. This means maintaining your pine stands at 70-90 square feet of basal area. Over-crowding means less water and nutrients available for each tree.
Why Plant Longleaf Pine
Some of the advantages of Longleaf pine over Loblolly pine are as follows:
Containerized Longleaf pine seedlings survive spring droughts better than bare root Loblolly pine. After establishment, Longleaf is more resistant to damage from fire, insects, disease, and wind. A landowner can plant Longleaf seedlings wherever he can plant Loblolly, and Longleaf does better on heavy soils and sandy soils. It produces more poles and better grade lumber than Loblolly and is often worth 25-30% more than the same volume or weight of Loblolly. These are a few of the reasons why some landowners prefer Longleaf to Loblolly.
An article about turning trees and wood scraps into biofuel for automobiles was recently in the newspaper. Approximately one ton of wood will produce 80 gallons of cellulosic ethanol. Plants which are currently being built will use a chemical process that heats wood waste and transforms it into a heavy synthesis gas. This gas is then turned into ethanol and methanol.
This type of fuel is more environmentally friendly than corn ethanol. It uses waste products, is more efficient to produce, uses less water, and requires less energy to produce. As this process improves and more plants are built, the landowner will have another source of revenue for his timber.
Wood Biomass Demand
This will be another market for landowners. Three new mills in Georgia, Florida, and Alabama are planning to produce over 1,000,000 tons of wood pellets for the production of electricity in Europe. The Kyoto Protocol requires these plants to use fuels produced from renewable resources.
Dixie Pellets is located in Selma, Alabama, another mill in Jackson County, Florida, and the third is the Cantonment mill in Georgia. The pellets from these mills will be trucked or barged to Mobile, Alabama for shipment to Europe. All three plants plan to produce and ship in 2008. The wood pellets from Selma will require 3 to 4 million tons of small diameter wood and logging residue in the South Alabama area.
Currently there are several pellet mills in the northeast U. S., but none have the production capabilities of these new mills. Alabama will have increased demand for small-diameter wood, so prices should improve.
Controlled Burning Improves Wildlife Habitat
Burning creates low-growing herbaceous plants, makes the natural foods more accessible, increases cover for wildlife, reduces undesirable hardwood stems in pine plantations, and increases timber growth by removing the competition. The burn needs to be accomplished in the dormant season and before the turkeys nest. Burning late will destroy the turkey nests.
Burning reduces the fuel, adds nutrients to the soil, and opens the stand. Wildlife biologist generally recommend to burn every three years for improving the wildlife habitat. Burning in a checker board pattern creates a variety of food and cover for all sorts of wildlife.
If the landowner burns his own property, he must be a “Certified Burn Manager”. He must get weather conditions for his county from the Alabama Forestry Commission website, obtain a burn permit the day of the burn, have plenty of help and equipment available, and be very mindful of wind direction, highways, homes, and communities. Liability is very important. Most consultants who offer prescribe burning services have insurance.
The Invasive Cogongrass
Cogongrass is aggressive and very difficult to control. It can now be found through-out Alabama reducing forest productivity, ruining wildlife habitat, and creating a fire hazard. The seed is small, light in weight, and transported by wind, animals, truck tires, four wheelers, farming tractors, etc… Cogongrass can be recognized, because it creates a solid bed of grass, can be one to four feet tall, edges of the leaves are saw-toothed, and the center vein is off center.
It is found in fields, pastures, along roads, urban areas, wetlands, and forest lands. The plant burns very hot in the dormant season, but is not killed by fire. The plant reduces forest and pasture growth, has no value for wildlife, creates problems in fields and all open land, and will not allow native vegetation to exist on the same site.
Cogongrass can be somewhat controlled in fields by repeated disking to a 6 inch depth during the growing season. In the woods both glyphosate and imazapyr herbicides are effective. Apply these herbicides in the spring and in September or October for control and eradication. It will take four to five years to accomplish complete eradication. More information is available at www.cogangrass.com.
In order to achieve successful reforestation, one must plan in advance. The first step is to choose the appropriate species for that particular site. Consider the previous stand and conditions in which it was left; this will aid in making a prescription for reforestation of the tract.
Most areas need some degree of site preparation before planting takes place. The following is a general guideline to consider for most pine reforestation. Tracts will need to be treated with herbicide in late spring and summer. This will kill any residual seedlings or sprouting along with weeds and brush from the previous stand. Once the treatment has taken effect by late summer, or early fall, a site preparation burn may need to be administered. This will reduce any residual natural seedlings or sprouting not eliminated by the herbicide treatment as well as providing better planting access. Mechanical site preparation may also be needed to improve the planting site. Shearing, bedding, ripping, etc., are some of the methods used and need to be planned around spraying and burning applications. Planting of pine seedlings usually takes place from December 1 through March 1 for bare root seedlings. In the following spring, pine seedlings need to have a herbicide application to release the seedlings from any herbaceous competition.
As you can see there are many steps in the reforestation process that take months to prepare and to administer. Begin your planning after timber harvest to achieve successful reforestation.
Droughts affect both pine and hardwood trees. When the leaves do not get enough water they may be smaller than normal, turn brown, and even defoliate. Pines normally will not wilt from drought. Often the second year some pine needles will drop earlier than normal but the trees will be fine. Some drought weakened pine trees have fallen victim to the Ips beetles and southern pine beetles. Even though some hardwoods were completely defoliated during the summer, some will recover and do fine the following year. Wait until next summer before removing these trees
Avoid paying excess taxes on timber sales
Many landowners pay excess taxes each year because they simply mishandle timber sale income. Upon acquiring a piece of property the first thing a landowner should do is determine the “cost-basis” of the timber. This requires an inventory and appraisal of the bare land and timber.
All costs associated with the purchase (i.e., survey, title search, forester fee, etc.) should be used to help establish the original cost basis. Once this is determined, a depletion rate can be calculated. The depletion unit is determined by dividing the adjusted basis by the total quantity of timber. It is usually expressed as $/MBF or $/Cord. The depletion rate is very important because it enables the owner to recover his cost (basis) in the timber. Once the depletion rate has been determined one can calculate the amount of gain or loss from a timber sale.
Determining “cost basis” on a timber sale is very important and can save a landowner from overpaying hundreds or thousands of dollars in excess taxes.
At McKinley & Lanier, we assist you and your accountant in making sure one does not overpay.
Timber Income Tax
When timber is sold the income is taxed at the capital gains rate and not as ordinary income. Remember that part of the income is deductible as the “basis” of the original purchase price of the land and timber. Allocate your total purchase price, or inherited price, of the forest land into three accounts such as land, timber and improvements. After you sell some timber you can take a deduction: adjusted basis divided by current total timber volume times timber volume sold.
Family Limited Partnership
This estate planning method has been under a cloud since 2003. A new decision in a separate case has calmed some fears. This type of partnership allows wealthy people to transfer money and other property virtually tax free to their heirs. The parent can become the general partner, and the children would be the limited partners. Well-structured Family Limited Partnerships is a very important tool in the arsenal of estate-planning techniques. Don’t put this off, and contact your accountant and/or attorney today.
Casualty Loss from Hurricane Damage
The deductible timber loss is limited to the adjusted basis minus any salvage value. Loss is calculated by fair market timber value before the hurricane minus fair market value after the hurricane. Some new procedures are now allowed in determining loss, but it depends on original purchase, situation prior to harvest, fair market value and how salvage revenue is used. A tax accountant can assist you in determining the loss.
Reforestation expenses now Deductible
A landowner can now deduct the first $10,000 of reforestation costs per year against other taxable income. Any reforestation cost that exceeds the initial $10,000, in any given year, can be amortized over 84 months.
These qualified expenses include: site preparation, (mechanical or chemical), prescribed burning, seedlings, labor, and post planting herbicide treatments. This $10,000 deduction occurred through the efforts of Senator Jeff Sessions.
Landowners should keep complete records of all forestry activities to verify entries made on tax returns, including invoices, contracts, receipts, canceled checks and maps that validate woodland holdings and forestry operations. Woodland records should be preserved for a minimum of 3 years after the return is filed—the ordinary limit for an IRS audit. This limit, however, can reach 6 years. Documents relating to acquisition of land, timber and other capital items should be held for the period of ownership plus a 3 year or longer period following a disposition.
Deferred Gains from Storm Damage
Gains from storm salvaged timber can be deferred for two to five years if one intends to invest that money into similar property. Similar property can be improvements to the land, additional timberland, equipment to use on the land, and other related property purchases. In some situations just paying the capital gains rate of 20% (Federal and State) the landowner might come out better. Your accountant can help with a good decision.
Up to $10,000 (filing jointly) of reforestation expenditures can be deducted on each “Qualified Timber Property”. Example: A landowner who reforests three separate “Qualified Properties” in the same year can deduct up to $30,000. The amount over $30,000 can be amortized over a seven year period.
A “Qualified Property” is a tract over one acre and can be management units, depletion units, tracts, stands, or even cutting units. This is a new ruling and very beneficial.
Capital Gains Treatment on Timber Sale Income
Take capital gains treatment on timber sale income. Do not pay ordinary income tax rates which can be up to 35%, and then you pay an additional 15.3% self employment tax.
By taking the capital gains rate you pay only 15% Federal, and about 5% state tax, resulting in a huge savings.
Capital gains tax rate also allows the tax payer to deduct cost of sale, the basis in the timber, and pre-harvest site preparation. Any type of timber sale allows the capital gains tax rate. Before 2005, you could not do the above on “Lump-sum sales”.
Cost-share Payments can be Deducted
All, or a portion of cost-shae payments, can be deducted. If a section 126 election is in effect, Federal cost-share programs such as EQIP, CRP, WRP, FLEP, and WHIP can be wholly or artially excluded from income. The process of calculating the qualifying amount depends if timber is sold that same year or not. If timber is sold then 10% times the timber value ÷ 3 is the qualifying amount. The present value of that number is divided by 6.08%. This number indicates the amount that can be excluded. If timber is not harvested, then $2.50 times the acres treated divided by 6.08% gives the qualifying amount. This number is then minus the amount of cost-share monies a person received. Check with a CPA on this deduction to be sure you qualify.
Instead of selling land and paying taxes on the proceeds, an owner can purchase replacement land and not pay capital gains taxes. This like-kind exchange is called a “1031 exchange”. Since the gain is not taxed, one can acquire replacement property with the total sale value of the first piece of property. To qualify for the exchange, the replacement property must be identified within 45 days after closing. The transaction has to be completed within 180 days.
Create Diverse Forestlands
Many landowners want to maintain forestlands that are abundant with different species of wildlife, and a good forest management plan is essential in achieving this goal.
For instance, you should have a diverse population of mast-producing trees on your land. Mast is the term used to describe the seeds and fruits of plants that are eaten by animals. Mature hardwood trees, such as hickories and oaks, are needed for maximum mast production. For most oak species, the tree must be 16 to 18 inches in diameter at chest height for peak acorn production. The mast crop, however, is not a steady source of food for wildlife because of growing season variations.
Clear-cutting, thinning or prescribed burning can increase browse, vegetation that animals use for food, such as the buds, twigs, leaves, fruit and flowers of woody plants. But, be sure to leave den trees—trees with cavities that provide shelter and nesting sites for wildlife species.
Also, areas of mature timber, clear-cuts, young timber, and food plots should adjoin to create an “edge effect,” that is, a zone where two habitats come together, such as open land and woodland. This zone or edge is especially rich in plant and animal life.
These are but a few tried-and-true forest management practices. For more information or help in preparing a forest management plan of your own, contact one of the forest management experts at McKinley & Lanier Forest Resources, Inc.
Mineral Supplements and Deer
Do vitamin and mineral supplements of “salt licks” improve the health of white-tailed deer?
Many landowners enjoy creating these “licks” and observing evidence of their use. Deer appear to crave sodium. They will seek out and use natural and artificial licks containing sodium.
But so far, controlled studies on the subject have not been able to detect any significant improvement in white-tail body or antler growth resulting from vitamin and mineral supplements.
The white-tailed deer research program at Auburn University, which conducts research concerning deer management, reports finding good response to licks created by placing 50-100 lbs. of di-calcium phosphate in a soil depression and covering with an equal amount of pure salt (sodium chloride). Rainfall will leach the compounds into the soil, and deer sip the rainwater that accumulates in and around the depression.
Warm Season Deer Foods
An increasing number of landowners are realizing the benefits of planting warm-season food plots to provide for the nutritional needs of deer on their land. Generally, late winter and late summer are periods of stress for southern deer and this “off season” period is a time of special needs. This is the time of antler growth, gestation, fawning and lactation – crucial time in the annual rhythm of the white-tail.
Planting food plots in the fall or spring should only be considered as part of a well thought out habitat management plan. Some of the most nutritious and most commonly used warm-season crops are described next.
Soybeans – There is no better warm season forage for deer than soybeans. Soybean foliage is high in protein and the seed is extremely high in protein, fat and other nutrients. There are many varieties of soybeans to choose from, but it is best to select a late maturing variety or a variety bred for forage production. Planting dates vary from late April to mid June depending on soybean variety and planting location.
Cowpeas – Cowpeas are annual legumes, like soybeans, and produce high protein forage during the off-season. As with soybeans, there are many varieties of cowpeas. Recommended planting date vary from about May 1 to July 1.
American jointvetch – Also known as Aeschynomene, this warm-season tropical legume can produce large quantities of high quality forage during the summer months. Jointvetch seed cost is high and successful establishment of plots often requires intensive culture and herbicide use. Jointvetch is tolerant of wet soils but is not suited to sandy soils. Planting dates vary from March 1 to June 1.
Deer antlers are indeed incredible. They exhibit the fastest form of bone growth known. The blood-rich covering on antlers, called velvet, is the only regenerating skin found among mammals.
Bucks develop and shed new antlers annually. Antler growth begins in mid-March to April. Normally when the buck is six months old only knobs or buttons occur under the dense hair on its forehead. Antlers may reach full size in 20 weeks or less. During the growth period antlers are covered with a thin velvety layer of skin filled with blood vessels, which nourishes them. Injuries occur easily to the soft, sensitive growing bone, and accidents during this stage cause deformed antlers. When full growth is completed in August or September, the velvet dries and either sloughs or is rubbed off. Bucks retain their antlers until late winter or early spring. In March or April, under the influence of increased daylight, the whole process starts over again.
Once antlers are shed, they begin to deteriorate from the effects of moisture and sun. In areas of high humidity and rainfall, deterioration is much more rapid than in dry, arid regions. Rats, mice, squirrels, domestic livestock, and even deer themselves will chew on antlers for minerals.
Chronic Wasting Disease
CWD is a transmissible spongiform encephalopathy of deer, elk, and moose. Alabama has had a surveillance program for the past 6 years in taking samples from 700 deer per year. The state toxicology lab in Auburn examines brain stem and lymph node tissue. Alabama does not have any sign of Chronic Wasting Disease. It has been illegal to import any member of the deer family to Alabama since 1973.
If hunting in the Midwest in states where CWD is found, a person should debone the meat and not eat any of the nervous system. There has not been any large deer or elk die-off in the Midwest due to CWD. So far, CWD has not been found in the Southeast. No human illness or deaths have been linked to CWD.
Wild Hogs are Cause for Concern Among Landowners
Wild hogs in the United States originate from domestic hogs that either escaped or were released into the wild. Those that were relocated from Europe were not from domestic strains. Their diet is composed of forbes, grasses, acorns, nuts, succulent roots, fruits, agricultural crops, worms, insects, and carrion.
Rooting can lead to the destruction of habitat along watercourses and in many other areas. Wild hogs are also the carriers of diseases. Brucellosis can be transmitted to humans. It causes flu-like symptoms and can lead to death if not treated. Pseudorabies, another disease, is not a concern to human health, but can be fatal to many species of livestock.
The many negative attributes of wild hogs make them a concern to landowners. The harvest of wild hogs simply creates a younger age distribution. The best we can hope for is to harvest as many as we can in order to keep the population from expanding out of control.
Hunting Deer Scrapes
Hunters who recognize scrapes and have a little patience usually succeed at deer hunting. Scrapes are created by rutting bucks pawing the ground until it is torn up – usually an area of less than a square yard. The bucks leave scent in the scrape to attract female deer (does). Rubbed trees (from antler polishing and sparring) will be found in the immediate vicinity. These mark breeding season territories, which are defended when approached by other bucks.
The hunter needs to locate fresh scrapes. Some of the best places to look are along ridge tops and in old logging roads. Kick leaves in the scrapes – they will be removed by the buck within a couple of days if he is using it. New scrapes are checked more often by the buck, and during “full” rut, they are checked at least once every 48 hours.
When the scrapes run along a ridge, the hunter needs to be located so that several can be watched from his tree stand. One should not be directly above a scrape, only in sight of it.
Patient waiting is then all that’s needed for a successful hunt. Good luck!
Turkey facts that can make you a better hunter…
As any good hunter knows, it helps to know the movements of the game you are hunting. The turkey is no exception. Learning the turkey’s life history may give you the edge you need this spring.
Turkeys begin nesting in late April and usually lay 10 to 12 eggs. These eggs incubate in less than 28 days. During the first few weeks of a turkey’s life, its diet consists mainly of insects. Later the diet will change and young turkeys will feed mostly on mast (acorns, etc.).
After the nesting season, turkeys group together and stay in large flocks until early spring when the gobblers set-up a pecking order that determines which birds will be “boss” and do most of the mating in given areas. When you hear only one turkey gobble in the area, it is probably the “boss” gobbler. This doesn’t mean there is only one gobbler in the area, just that all the others are usually scared to gobble when the “boss” is around. If you kill the “boss” gobbler, another will usually claim the territory within three to four days.
Some signs to look for are scratching, tracks in the road, dusting areas and droppings. By locating your turkeys before the season starts, you have the jump on less dedicated hunters and the payoff will be more trips back to the truck with a turkey.
Is Green Forage a Sign of Good Nutrition?
When it comes to planting forage for wildlife food plots, though, most landowners and sportsmen think they are planting forage that is rich in crude protein and mineral content.
Does a green field always mean the habitat is nutritious? Fortunately, there is a simple test that hunters and landowners can have performed to determine just how nutritious their food plots really are.
Most land grant universities with agricultural-based colleges, like Auburn and Mississippi State, have feed and forage analysis laboratories on their campuses. For a small fee, landowners can send a sample of browse or clippings from their food plot to these labs to have it tested for crude protein content, total digestible nutrients and mineral analysis.
A forage that is high in crude protein and mineral content is generally considered better for deer. The higher the measure of digestibility, the subsequent increase in efficiency and less waste. Thus, more of the nutrients can be used by deer, rather than dissipated.
An alternative method for measuring habitat quality is fecal analysis. Deer feces can be collected and tested for crude protein content, mineral content and digestible organic matter. This is a relatively new technique and labs that can run this analysis presently are limited. However, fecal testing holds much promise as another simple method to evaluate nutritional quality. Landowners can pick up forage testing kits at county extension offices.
Trapping Prices Have Increased
The pricing trend for pelts has increased even though trapping licenses have decreased. Prices have returned to the late 1990 figures. Russia and China have created a demand for furs as well as other European buyers. Buyers of fur will often buy fur that is green, dried, or in the round. Some buyers have scheduled pickups, some hides are mailed, and some buyers have permanent locations.
2007 Prices from one buyer in Idaho
Grey Fox $25-$35
Trapping is important to the conservation of our natural resources. As most landowners know – beavers can ruin our best quality land, coyotes eat pets in urban areas, and raccoons eat livestock feed.
Pelts can be sold at small local companies, large companies, and auction houses. Small companies generally pay less than the larger companies, but they don’t require the pelts to be dried. Each situation is different. For more information call The National Trappers Association in Indiana at 812-277-9670 for further information.
Hunting leases are an additional source of income for the landowner. Lease income pays for the annual property tax and more. Intensive forest management for both pine and hardwood sites provide good wildlife habitat.
Suggestions for hunting leases:
• Contract length of time – 3-5 years with termination clause included
• Liability Insurance – Suggest $1,000,000 liability coverage that the lease group purchases
• Fees depend on – accessibility, streams, lakes, age of timber, quality of land, diversity of growth, food plots, types of wildlife, interior roads, size of tract, and timber management activities
• Range of fees – According to the above criteria, fees can vary from $5.00 per acre to $20.00 per acre.
We manage hunting leases for clients by providing a written contract, collecting payments, verifying liability insurance, and handling problems for landowners who own 500 acres or more. Call us today at 800-247-0041 for more information.