Wednesday, July 30, 2014

Alt Assets: "US timberland prices gain, despite lumber slowdown" (PCL; WY; RYN; CTT; PCH)

From Agrimoney:
Timberland in the US accelerated its price growth, despite some lumber market concerns centred on China and the domestic market, which prompted one of the top forestry groups to warn on profits.

US timberland prices were 7.2% higher in the April-to-June quarter than a year before, nudging 0.2 points higher than the rate of annual appreciation recorded for the January-to-March period, the National Council for Real Estate Investment Fiduciaries (Ncreif) said.

Factoring in income of 2.6%, the total return from forestry land over the year was 9.9%, the highest figure in nearly six years, although still behind the 17.2% achieved from farmland.

The performance "reflects a combination of strong export demand from China for logs and lumber and a healthy domestic demand in the US for timber products", said Mary Ellen Aronow, chair of the Ncreif timberland committee.

'Some hurdles'
However, Ms Aronow, a senior forest economist at Hancock Timber Resource Group, acknowledged some challenges to these factors, saying noting "some hurdles still facing the recovering US housing market, and a cloudy outlook for Chinese demand".

Earlier this week, Plum Creek Timber, which controls 6.7m acres of US forestry, cut its forecast for full-year earnings to $1.05-1.25 a share, from $1.30-1.50 a share, citing a market recovery in 2014 which "has been more muted than we and other industry participants initially expected"....MORE

The other publicly traded names are Weyerhaeuser, Rayonier, CatchMark and Potlatch.