1. Private Sector Applications of US Forest Service FIA & TPO Data Brooks Mendell bmendell@forisk.com 770.725.8447

2. Topics About Forisk – What we tell/teach others about FIA/TPO data FIA and TPO data applications – Market studies and forecasts Marketing FIA and TPO data – What could help expand/support private sector users? 2

3. About Forisk Consulting Forisk provides analysis and educational services to professionals and investors in the forest industry and timberland investing sectors. Publisher of: – Forisk Research Quarterly (FRQ) Timber forecasts and industry projections Wood bioenergy analysis and forest industry capital investments Timberland ownership and forest operations Deliver workshops on: – Applied Forest Finance – Timber (Wood) Market Analysis – Investing in Timberland and Timber REITs Conduct basin-specific market studies and forecasts. 3

4. Each quarter, Forisk forecasts timber prices for all major U.S. softwood and hardwood markets. 4

5. We actively share, use and teach FIA/TPO data applications, strengths and limitations. “Timber Market Analysis” course – Includes overview of FIA history, data collection methodology, Evalidator, available fields, etc. Market studies and SRTS results – Our debriefs include active, detailed dialogues on assumptions, strengths, limitations, considerations of FIA-data dependent results. – Analyses usually center on “client specific” markets. These can/do cross state lines. Timber price/wood cost forecasts – Results informed by localized analysis of FIA and TPO data. 5

6. Studies may also include regional comparisons that highlight fiber availability and accessibility. Data: US Forest Service Figure/analysis: Forisk Research Quarterly Q1 2015 6

7. Forest Supply Considerations The “Big Three” – Availability: are owners selling and “in the market”? – Accessibility: can we get a log truck there? – Sustainability: does and will growth exceed removals? Species and specs – What are the relevant species? – What are the relevant timber products? – What are the relevant specifications? These vary by market and mill type: size, age and quality 7

8. Key data sources: we typically consider 3 or 4 sources and compare to identify issues. U.S. Forest Service FIA data – Removals: data can be old depending on remeasurement plots. – Growth data: same issues as removals; SUPER important to industry/investors. – Forisk participated in public/private research consolidating FIA and private data. U.S. Forest Service TPO data – Pros: spatial, historical – Cons: not current, only a sample of mills Wood Demand Research Program at University of Georgia – Collects wood use data from participating mills on a quarterly basis. Program started by Forisk in 2006; donated to UGA in 2011. – Pros: current (quarterly); historic – Cons: not spatial; sample of mills; South only Forisk Spatial analysis – Generate market and mill-specific estimates from Forisk database. – Other private firms have similar approaches. Internal data (cruises) 8

9. Removals: some states offer more current data. 9 Athens, GA Basin from SRS TPO: thru 2011Oregon from ODF: annual thru 2013

10. Wood demand data clarifies market interactions; data available through previous quarter. Data sources: Center for Forest Business, UGA; Timber Mart-South 10

11. Forisk application: estimating supply effects on prices with “Removal Years” Inv/Removals= Currently 27 "removal years" Sources: U.S. Forest Service FIA, TPO, Forisk Consulting Example: State of Georgia 11

12. Spatial application of growth and removals data Top Firms & Net Growth of Pine Grade Data as of April 2014 12

13. Priorities: what would help us the most? Clarify conversions; – (and notes of assumptions, i.e. with bark/without bark); Update TPO data as quickly as possible (SUPER helpful); Strengthen growth and removals estimates in FIA data; – Understanding the time lag of the growth and removals data is one of the most challenging aspects of communicating results/implications. 13