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Reblogged: Plum Creek Timber Co. developing 2,000 acre ‘mega site’ in south Georgia – from Atlanta Business Chronicle

What’s going on in the timber industry?

It’s always good to stay into tune with what the big guys are doing in the timber industry. Even if you’re a timberland owner looking to sell timber for the first time, knowing what the largest timber companies are doing during the time of your sale could provide valuable information to guide your decisions.

Check out this recent article from David Allison at the Atlanta Business Chronicle about Plum Creek Timber, one of the nation’s largest REITs (Real Estate Investment Trusts).

Rick Holley, CEO of Plum Creek Timber (plumcreek.com)
Rick Holley, CEO of Plum Creek Timber (plumcreek.com)

In summary, Plum Creek has recently said, “Yes, we’ll take care of that,” to about 800,000 acres of land around Dublin, Georgia. Their plans are much more sophisticated than simple timber management and involve providing hunting rights, developing commercial and private properties, and conserving natural resources.

What does this mean for me?

It could mean nothing and it could mean everything. If you live in the vicinity of Dublin, there’s a good chance that during the next fifteen years the timber supply could raise significantly. Greater supply means less demand. Less demand means lower prices per ton. Of course, that’s an oversimplified way of looking at a very complicated market, but you get the idea. If you’ve been thinking about harvesting or thinning in the near future, now might be the time to sharpen the axe–ergh, we mean, call an independent forester.

But I don’t have land in that area. Or even in Georgia. How does this affect my timberland?

Well, it may or may not affect you directly, but it certainly indicates a lot about the timber market in general. Plum Creek has a long tradition of making prudent decisions: mergers with major industry players such as Georgia Pacific, acquisitions with myriads of lesser timber companies, and acres upon acres of timber transactions. When the market fell late in 2008, Plum Creek was quick to respond by downsizing and repurposing much of their assets. Compared to many major companies with an IV connected to the housing market, ol’ Plum Creek graded an A in recession maneuvering.

That said, it’s important to watch Plum Creek’s moves during an ever-so-uncertain economic environment. Though the Fed recently announced it’s decision to end quantitative easing, many skeptics are saying, “Are you sure?” based on suspicious-looking unemployment numbers. Despite the suspicion and fear that remains, Plum Creek appears to be showing confidence. This is certainly one of the larger moves they’ve made since 2008, and a strong indication that, at the very least, their experts are willing to gamble.

Stay tuned for more timber industry news from Timber Update. Until then, keep growing.

Matthew Noxsel

Editor//Timber Update

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