1 Status and Trends of Georgia’s Forests Bob Izlar Director UGA Center for Forest Business Carbon Markets & Forestry Forest Guild & Southern Forests Network May 15, 2007 Alcovy Conservation Center, Covington, GA

2 Southern Timber Trends Key Issues Globalization Abundant timber supplies –Hardwood ? –Quality logs? Consolidation and dis-integration Forest land ownership shifts

3 Know Your Business Famous Prognostications “Louis Pasteur’s theory of germs is ridiculous fiction” “Everything that can be invented has been invented.” “This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.” “Who the hell wants to hear actors talk?” “That rainbow song’s no good. Take it out.”

4 Know Your Business Famous Prognostications “Television won’t matter in your lifetime or mine.” “We don’t like their sound, and guitar music is on the way out.” “I think there is a world market for maybe five computers.” “There is no reason anyone would want a computer in their home.” “640 K ought to be enough for anybody.”

5 Forested Regions of the World

6 World Markets

7 Million m3 Source:Temperate and Boreal Forest Resources Assessment Forest Resources: Growing Stock

8 U.S. Private Timberland Production Average Annual Volume by County Source: USDA Forest Service: RPA

9 Source: Smith et al. 2002, FAO, FRA 2000 United States in World Context, 2000

10 Source: Smith et al. 2002, FAO, FRA 2000 U.S. South in World Context, 2000

11 Source: “China Forest Products Market Information”, December 2003 Sino-US furniture trade: US side Chinese share of US market increasing rapidly Chinese furniture exports to US –2000: $1.7 billion –2002: $2.9 billion Anti-dumping investigation requested by 28 American furniture manufacturers in November 2003 US furniture industry earnings down 70% US furniture workforce down 34,000

12 Source: “China Forest Products Market Information”, December 2003 Sino-US furniture trade: Chinese side 60% of China’s furniture exports are “American” furniture –Produced by US-owned companies –US wood –US technology and styles Advantage for US manufacturers is low manufacturing costs –Labor –Energy –Taxes

13 Commercial Timberland Transactions Over 22 million acres of industrial timberland has changed ownership in the past five years (in large transactions) The traditional vertically integrated forest products companies have been the sellers and institutional investors have been the purchasers –Trends are evident by region (NE, South, Lake States, PNW) Trends appear to be continuing with additional asset sales by integrated forest products companies. If any are left ??

14 Source: Company annual and quarterly reports (*no longer own timberland, through Dec. 2006) Top Ten Industrial Timberland Owners 2000 and 2007 in Million Acres Company2000 Company2006 1International Paper12.1 1Plum Creek Timber Co.8.2 2Weyerhaeuser5.7 2Weyerhaeuser5.7 3*Georgia-Pacific (The Timber Company - Plum Creek Pending) 4.7 3Rayonier2.2 4Plum Creek3.2 4Temple-Inland2.0 5*Boise Cascade2.3 5Sierra Pacific1.5 6Rayonier2.2 6Potlatch1.5 7Mead2.1 7MeadWestvaco1.1 8Willamette1.7 8International Paper0.8 9Temple-Inland1.7 9Simpson Lumber/Green Diamond Potlatch1.5 10Roseburg Forest Products0.7 Total37.2 Total24.3

15 Ten Top Timberland Investment Management Organizations U. S Timberland 2007 Source: Timberland Market Report and TMS RankCompanyAcres (Million) 1Resource Management Service 2.6 2Hancock Timber Resources Group2.4 3Wagner Forest Management 2.3 4GMO Renewable Resources 2.2 5Forestland Group 2.1 6Forest Capital Partners, LLC Forest Investment Associates 1.9 8TimberStar*1.2 9Regions Morgan Keegan Timberland Group Fountain Forestry Inc. 0.8 Total 18.7 Revised for 1Q 2007 publication* Not traditional TIMO

16 Current Threats to Forestry: Two Georgia’s Urban/Suburban Rural

17 Georgia Forestry Association PO Box 1217 Forsyth, GA The reality of the pressures on Georgia’s forest products manufacturing sector

18 Waycross Fire, GA 2007

19 Waycross Fire, GA 2007

20 Forestry touches all of us… Courtesy of Weyerhaeuser – Port Wentworth

21 Source: Forest Inventory and Analysis data, USFS Southern Research Station Family forest owners own 58% of forestland Forestland Ownership in Georgia 2003

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23 Sources UGA Center for Forest Business Timber Mart-South UN FAO China Forest Products Market Information Forest Products Annual Marketing Analysis Jon Caulfield U.S. Government Hancock Timber Resources Group RISI Temperate and Boreal Forest Resources Assessment 2000 Pulp & Paper International Wood Resources International Forest Resources Assn. (formerly APA) Southern Forest Products Association Weyerhaeuser – Port Wentworth Georgia Forestry Association Tom Harris, Jr. Sara Baldwin Mike Clutter