Past, Present, Future Part 5

It sure looks like Weyerhaeuser will depart Montana in the foreseeable future

By Dave Skinner

Last time in this series on Montana’s forestry sector, I left you with the matter of Weyerhaeuser’s exit strategy.

Since the turn of the 21st century, Plum Creek’s long-term Montana trend was one of consistent downsizing: Fewer mills, fewer employees, and less land – in Montana. With the Weyerhaeuser takeover, that pattern remains. Just in 2016, many staff at the Columbia Falls “Cedar Palace” have been laid off or taken transfers as a direct result of merger efficiencies, while the Columbia Falls lumber and plywood operations ended in August, with some production shifted to Evergreen.

So, kids, it sure looks like Weyerhaeuser will depart Montana in the foreseeable future. Who might buy, and, most important, at what price?

First, the pool of potential future owners is pretty limited: Private buyers, either corporations or wealthy individuals; or government agencies (federal, state, and county).

As for private buyers, keep foremost in mind that any private entity with the cash or credit rating to buy hundreds of thousands of acres, or mere thousands, will be based outside Montana.

What might a wealthy individual purchaser do? Use your imagination – what would you do? Lock it up, of course.

What about business buyers, which, given industry and tax realities, would almost certainly be either Real Estate Investment Trusts or Timberland Investment Management Organizations (REITs and TIMOs)? They’ll come only at a bargain price, or at least a price rationally based on net present value (NPV) – the shareholders would make certain of that. And, if they do, it’s almost a sure thing they will either block off public recreational access, or charge heavily for it.

One Weyerhaeuser example: In the Longview, Washington area, a motorized permit for 381,000 acres with 818 permits available was $300. Non-motorized permits were $50 with 273 still on sale. Even better, walkers can’t bum a ride from someone with a vehicular permit. Ever. If you’re caught, you’re busted and banned. Is that Montana’s future?

What about government purchase?

Adding to the federal national forest estate has already proven foolish. Remember the $250 million that bought some of the Montana Legacy Project for the Forest Service in the Swan? Because these lands, 120 years a private working forest, were now federal, four usual-suspect Green groups sued. Then Judge Donald Molloy ruled last February that no more trees could be cut without the entire federal environmental alphabet soup of analysis paralysis. Wow, wasn’t that money well spent?

What about the state of Montana and interested counties as possible government owners?

Well, as far as the state is concerned, I dare anyone to deny that Montana’s trust lands forestry operations are the best balanced on the ground, thanks to a long-term sustained-yield mandate written by Montanans.

What about counties? This is possible, too, with tribal forest management programs on Northwest reservations being a great example. Tribal members enjoy excellent recreational and cultural access to reservation forests, while management actions happen in a framework of being culturally sensitive, yet coldly rational. As a Colville tribal forester bluntly put it to me: “We can’t print money, we have to earn money.” Could counties do that? Sure.

Might either or both work? Yep, and better than the alternatives.

One positive change: Management on state and/or county-owned lands would be set by Montana officials elected by, and accountable to, Montanans. That cannot and never will be said for corporate boards or Congress.

Another: Because states and counties can’t print money, management actions would have to be fiscally rational, if not purely profit-driven – a happy medium between two extremes.

Third, any increase in Montana owned and operated forests, managed for sustained yield, would help stabilize the outlook for Montana’s forestry sector. Without experienced foresters, loggers and millers, it won’t matter what Montanans really want from our forests that cover a full third of our state.

So if and when Weyerhaeuser pulls the pin, Montana must be ready to buy as much of Weyerhaeuser industrial forest as possible, at a price that reflects what that land is worth as, yep, working forest. Montana must get this singular opportunity right, or Montana will regret the consequences forever.

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