Cost-Share for Management Activities in the states of Idaho and Washington is available through the Natural Resource and Conservation Service (NRCS). The Environmental Quality Incentives Program (EQIP) has cost-share dollars available for landowners to use for forestry practices on their lands. Northwest Management, Inc. personnel have been trained to guide the landowner through the application process, design, and completion of appropriate EQIP projects. Management activities that are considered for cost-share through EQIP include, but are not limited to, pre-commercial thinning, fuels treatments, slash disposal, pile burning when the piles were created as part of a project, tree and shrub establishment, brush management, channel bank vegetation and stabilization, nutrient management, noxious weed control, prescribed burning, and wetland enhancement and restoration. For more information, call Matt at (208) 883-4488 ext.121 at our Moscow, Idaho office, Jim at (208) 772-8554 at our Hayden, Idaho office, or Brian or Luke at (509) 276-4699 at our Deer Park, WA office.

By: Keith Balter, Senior Economist, Forest Capital Partners, LLC

Over the past year, timberland owners in the Inland West have seen sawtimber prices retreat as lumber producers sharply curtailed production at mills across the region. In recent weeks solid wood products prices finally responded to the reduced production, and have picked themselves off of the floor and regained some forward momentum. After sinking to near historic lows at the beginning of the year, softwood lumber and plywood have posted a string of price increases, pushing the RL composite lumber price index in the first half of May to an average of $274/MBF, up 12% from the low-point of 240 in March. Another hopeful indicator was the recently reported 8% jump in housing starts in April.

Have we turned a corner and are we standing at the beginning of a sustainable recovery in wood products markets, or are we experiencing a false spring? Unfortunately, the demand/supply fundamentals point to the latter. On the demand side of the equation, the outlook for new residential construction, the key determinant of lumber and structural panel demand remains disheartening, despite the overall up-tick in April. All of the April gain occurred in the highly volatile multi-family category, where the construction tends more toward concrete and steel rather than wood. Starts for single family units actually edged a bit lower to 692,000 units on a seasonally adjusted annual rate, which is down 58% from the heady markets in April 2005.

 A significant rebound in housing in the remainder of 2008 is not likely to occur for a number of reasons. Access to mortgages for first-time and marginally qualified buyers has been severely restricted in the wake of the sub-prime mortgage crisis. Lenders have increased their requirements for home buyers regarding income and credit ratings, and have increased vigilance in verifying financial information and assessing property values. With home prices falling, potential buyers are also pulling back from the market, concerned that they could buy the same house for less in the near future. At the same time as the pool of buyers has become more limited, a rising tide of foreclosures has been keeping the inventory of unsold homes at high levels. In April, the inventory of unsold homes was close to 10 months, based on the current sales rate, while the number of home foreclosures keeps moving higher. First American CoreLogic, a research firm, estimated that forclosed properties represented nearly 0.5 million of all the homes on the market this past January.

Time will be needed to work off the excess housing inventory already in the system and bring markets back to balance. This process could be speeded along with the assistance of the federal government. The foreclosure issue has assumed headline status in the presidential race, and Congress is frantically working to deliver a housing assistance program prior to the Fall election season. The House recently passed a major housing bill that would provide assistance to homeowners whose home values are less than their mortgage obligation. The program would provide $300 billion in federal loan guarantees in exchange for lenders agreeing to reduce the outstanding balance on troubled mortgages. The House also passed a separate bill that would provide $15 billion to states to set up programs to buy, refurbish and then sell or rent foreclosed homes. Although, President Bush has vowed to veto both pieces of legislation as they are currently written, the delivery of some package of federal assistance to housing markets remains very likely in this presidential election year.

 In addition, to the continuing weakness in new residential construction, wood product markets in 2008 will also feel the affects of a slowdown in the general economy. Growth in the U.S. economy slipped to an inflation adjusted annual rate of just 0.6% in the last quarter of 2007 and in the preliminary estimate for the first quarter of this year. This is down from 2.9% in 2006 and an average of 3.1% in the first three quarters of 2007. The other principal markets for softwood lumber and structural wood panels are repairs and alterations, industrial uses and non-residential construction. All of these market segments had remained relatively healthy over the past couple of years when new home construction slipped lower, but they have become much more vulnerable in the current economic slowdown.

Given the still formidable problems that need to be resolved in the housing markets and the drag on wood products demand that will result from the current sluggish economic environment, the recent bounce in lumber and wood panel prices is likely be short-lived. With the deep-pool of underutilized lumber and panel capacity in North America, any spike in prices will trigger a burst of production that will quickly flood the market and bring prices back to the ground. Timberland owners will have to wait until at least next year, before the foundation of a sustained recovery in wood products and sawtimber prices will begin to be established.

By: Michael Hoffman, Idaho Soil Conservation Commission

Climate change has become one of the biggest environmental concerns of our time. One of the most far reaching questions we have to deal with is how can we reduce our CO₂ emissions when the global energy demand continues to increase. Individually, we probably can’t solve that problem, but collectively, we can help make a difference.

Carbon Sequestration marketing is bringing new conservation and economic opportunities to Idaho farmers, ranchers and foresters. Conservation efforts that remove atmospheric greenhouse gases, including carbon dioxide (CO₂), methane (CH₄) and nitrous oxide (N₂O), and sequester them in the soil will produce credits that can be sold in a new trading exchange. The Idaho Soil Conservation Commission (ISCC) is leading this effort on behalf of Idaho State landowners and operators.

You may already be using some of the conservation practices that can provide salable credits, or you may be thinking of making some cropping or land use changes. In either case, the annual sale of carbon credits may provide additional income for your operation, and also help the environment.

The ISCC, with the help of its Governor-appointed Carbon Sequestration Advisory Committee, has focused on five key components to further carbon trading in Idaho. Those five key components are: Public Information and Outreach, Carbon Trading Pilot Projects in Idaho, Research, Geologic Sequestration, and a Carbon Encumbrance Inventory. For the audience of this newsletter, I will just touch on the first two components.

Public Information and Outreach. The ISCC has enhanced its website http://www.scc.idaho.gov to include a “Carbon Sequestration” tab that will provide background information on legislation, workshop presentations, and meeting minutes, all related to the development of carbon sequestration and carbon trading.

The Idaho OnePlan website http://www.oneplan.org/ which is a wealth of information in and of itself, has also been enhanced to include a “Carbon Sequestration” tab that will link you to a landowner-friendly website that can help you get started on formulating a “carbon trade”. As interest levels grow on carbon trading, we will focus our efforts on more educational and informational based presentations and public workshops, like the one we are planning for on November 5th in Orofino, Idaho.

Carbon Trading Pilot Projects in Idaho The Nez Perce Tribe is currently implementing Idaho’s first forestry trade, aggregated through the National Carbon Offset Coalition (NCOC), and marketed on the Chicago Climate Exchange (CCX). The Clearwater Resource Conservation and Development Council (RC&D) is working on an urban forestry carbon trading project with the cities of Moscow and Sandpoint. The High Country RC&D, the Three Rivers RC&D, along with several local Soil Conservation Districts in Eastern Idaho, are currently involved with the ISCC in working with a number of ranchers to develop and implement a rangeland and grassland pilot project. All of the above mentioned pilot trades have all been aggregated through NCOC and marketed through the CCX.

The Pacific Northwest Direct Seed Association (PNDSA) and Idaho farmers are currently participating in cropland trades involving no-till/direct seed and precision agriculture. These trades are brokered privately and directly with the buyers. These trades are known as “over the counter” (OTC) or boutique trades.

By: Vaiden Bloch, Northwest Management, Inc.

Prior to the arrival of computers and digital data, foresters relied on paper maps and aerial photography to assist in managing their lands. For a long time, USGS topographic maps and USGS Ortho Photo maps, as well a 9”x 9” stereo pair aerial photography were the medium of choice for mapping. Base maps were developed from these products for the area of interest and map layers were drawn on clear Mylar overlays identifying important features such as timber stands, streams, roads, and soils. Aerial photography was used to update maps, but aerial photography for small landowners was often dated, hard to acquire and expensive. With out aerial photography to update maps, foresters would use conventional surveying techniques to calculate acreage and determine the location of features such as roads, property lines and harvest unit boundaries. Then along came computers, GIS, digital data and the internet.

GIS (Geographical Information System) is a tool that uses computer technology, digital data and analytical processes to manage and display geographically referenced information, and make maps. GIS enables map layer overlay, modeling and querying to answers questions and provide information not possible with paper maps. Digital map data is widely available on the internet. Since GIS is an integral part of all government agencies and universities; map layers are continually being created, updated and improved. In areas where specific mapping information is not available, GPS (Global Positioning System) technology is used to map features in a fraction of the time needed for conventional survey measurement. Other useful map layers or data products available include digital elevation models (DEM) and color aerial photography, better know as NAIP Imagery. The old reliable USGS topographic maps did not go away, they have been scanned, geographically referenced and merged into county wide mosaics for use on GIS and other less expensive mapping programs. A DEM is a digital representation of ground surface topography or terrain developed using ground sensing technology. This product provides information used in creating contour lines, digital relief maps and for spatial analysis on a GIS. NAIP (National Agriculture Imagery Program) imagery is digital aerial photography acquired by the US Department of Agriculture during the agricultural growing season in the continental U.S. High resolution color NAIP imagery is available for most areas of the U.S. and is reacquired on a periodic cycle providing a view of current conditions on the ground for updating map layers, monitoring of land use and creating astounding map images.

The capabilities of GIS provide opportunity to display map data with astonishing visual effects. By using a combination map layers, scanned USGS maps or NAIP imagery in combination with a DEM, a custom map of a particular area can be created showing a pseudo three dimensional perspective of the land. This is accomplished by laying a semi-transparent map over a shaded terrain model. The shaded terrain model creates a shadowing effect that simulates 3-D in two dimensions giving a true perspective of the ground profile. This type of map is very impressive and functional for field work, hunting or for display as a general use wall map or picture.

GIS at its highest level is a sophisticated tool designed to handle massive data sets for answering questions and solving complex problems, but at the other extreme, with the data available today, it can be used to make just a really cool map.