FRA backs Long-term investment in Timber as an Asset class
A recent article in Barron’s stating the case for long term investment in lumber and timberland
has been backed by FRA.
Bainbridge Island, WA, December 08, 2012 - A recent article in Barron’s stating the case for long
term investment in lumber and timberland has been backed by Forestry Research Associates
The research and analysis consultancy agrees with the notion that long-term timber investors will
see strong returns. Analysts are pointing out the longer-term investment credentials of timberland
due to a rise in the number of people making short-term investments in the sector in light of the
price increases that have occurred off the back of Hurricane Sandy.
Shawn Hackett of the Hackett Money Flow Report, for example, told Barrons’ Widely advertised
natural disasters tend to be tops in lumber, fairly consistently. People who are knowledgeable
about this industry are using this spike as a selling opportunity.” Indeed, since mid-October timber
futures have been on the up, with CME Group Lumber Futures closing up 7 per cent at $340.10
per thousands board feet last week.
The reason FRA and other analysts are backing lumber as a long-term investment bet are three-
fold. Firstly, the recovery of the US housing market is spurring on the market for timber. Housing
starts are expected to reach 1.15 million by 2014, which is a huge improvement on the 730,000
currently being started each year.
The demand from Asia for exported timber is another reason that there is money to be made in
the timber market, claims FRA. For example, exported softwood from British Columbia in Canada
to China this year will total some 4.5 billion board feet. This is up from less than half a million
board feet just five years ago.
Lastly, the supply of timber is thought to be short of demand levels in the years to come. “This is
likely to push up timber prices even further, presenting good opportunities for those who have
invested now to sell their timber at a tidy profit,” added FRA’s analysis partner, Peter Collins.
Forestry Research Associates
620 Vineyard Lane
Bainbridge Island, WA 98110
(206) 316 8394