Green Horizons Newsletter - AgEBB

Green Horizons

Volume 13, Number 2
Spring 2009

Forest from the Trees: The Bottom Line

Dave Murphy, Conservation Federation of Missouri

In October 2007, our farm became certified in the Missouri Tree Farm program. This is the fifth of six articles recounting why and how this came about.

We have bought the farm. We have sought the advice, guidance and services of the best available professional foresters. Their recommendations have been fully and exactly implemented. What do we have to show for our investment? Was it worth it?

Our first timber sale more than paid for our inventory, forest management plan, timber stand improvement, fencing costs, signage and access road work. In fact, after all that, we had approximately 25 percent of the proceeds of the initial sale left to help with the costs of our new machine shed to house equipment. It is very significant to me that the sale itself paid for all these things.

You should note that ours was not a particularly high quality forest before management and that the market was not high at the time of our sale. In addition to the revenue from the sale, we sought and received significant cost share assistance, which allowed us to intensify and speed up our management efforts. Also note that the productive, healthy and sustainable forest we have under management is much more valuable now than it was before our actions.

Because we made an inventory before we began implementation of our management plan and because we carefully tracked our every investment, we were able to minimize our tax liability for the timber sale by reporting on the cost basis. You can read University of Missouri Extension guides to learn more about timber cost basis calculations. I personally recommend attempting this only in partnership with your consulting forester and whoever prepares your tax returns. Know that the significant tax benefits of reporting with this method are possible only when you have an accurate inventory and follow a professionally prepared management plan.

Because we made an inventory before we began implementation of our management plan and because we carefully tracked our every investment, we were able to minimize our tax liability for the timber sale by reporting on the cost basis. You can read University of Missouri Extension guides to learn more about timber cost basis calculations. I personally recommend attempting this only in partnership with your consulting forester and whoever prepares your tax returns. Know that the significant tax benefits of reporting with this method are possible only when you have an accurate inventory and follow a professionally prepared management plan.

Just as we intended, the forest is much improved as the result of our TSI and sale. We intend that forest quality will be further enhanced with each future manipulation. Our plan is a management re-entry to each stand about every 10 years. An important lesson for me was that an average quality oak tree might be worth $20 to a timber buyer. It takes at most 5 minutes to either prune it if you want to keep it, or to girdle it if you want to remove it. A high quality log resulting from this timely, simple action may be worth $400 or more at maturity. Simple, easy, timely actions can pay big dividends.

In terms of wildlife, if possible we have even more deer and wild turkeys now than before we began. Food and cover abound. We have restored two ponds to make permanent water more readily available. Adjoining open lands now have much of their fertility restored and are covered with a diversity of crops and native plants.

The direct results of our management activities should be obvious. One really has but two choices to consider as a forest landowner: keep the land or sell it. Either way our land is worth more now that it is managed. If you as a forest landowner do nothing more for your woods, at least get advice from a professional who knows their business.

I will wrap up this series in the summer issue by highlighting the Missouri Tree Farm Program and why every forest landowner should be a member.


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