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Woodlots as an Investment

From the Dec 19, 2016 Issue of Agri-News

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Investing into forestry has some distinct differences from investing into agriculture or another business.

“The most important of these differences is the time horizon for investment,” says Toso Bozic, bioenergy/agroforestry specialist, Alberta Agriculture and Forestry. “From the initial investment, planting a new forest requires between 20 to 60 years to generate any net returns. During this time only a small fraction of the cost can be recovered. However, many landowners in Alberta have already grown trees with little or no input whatsoever.” 

A mature grown forest can provide many valuable products that can be harvested. These include sawlogs for dimension lumber, high-value timber products (furniture-quality wood and veneer logs), wood fuel, wood for energy generation, wood for pulp and paper production, landscaping chips, wood shavings for animal bedding material, Christmas trees, and specialty forest products like decorative ferns, mushrooms, herbs and medicinal products. 

“Many farmers and ranchers look to woodlots as one way to diversify their farming operation, while those who live in urban centers see woodlots as an opportunity to enjoy the outdoors and see the forestland as an investment. However, although the perception is changing, most landowners in Alberta still see their woodlot/forestland as nothing more than a timber source or a place for personal enjoyment, and not as an investment.”

Read more: Woodlots as an Investment

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