REGIONAL RETURNS

There are two generally recognized timber-growing regions in the U.S. Each of these regions exhibits different return profiles based on the species of timber grown; the ratio of private to public ownership; the demand trends for the species in these regions; the ratio of export to domestic sales; and other regional, national and international economic factors.

In the Northwest, western hemlock and Douglas-fir account for as much as 90% of the commercial volume, while species such as cedar, ponderosa pine and other fir species account for about 10%. The rotation age is typically 45-60 years.

In the Southeast, the most dominant commercial species is Southern yellow pine, accounting for about 80% of the commercial volume. The other 20% includes a variety of other pine and hardwood species. The rotation age is usually between 20-40 years.

The returns for the two regions are shown below. The returns are from the NCREIF Timberland Index sub-regions for the period 1987 to 2005. The Northwest has outperformed the Southeast based on annual average return since inception.

Source: Northwest NCREIF 1987-2007, Southeast NCREIF 1987-2007

Click here to view NCREIF Annual Timberland Returns