Progress 10/01/02 to 09/30/07
Outputs
OUTPUTS: Sales of tracts of land that were wooded in whole or in part in a rural county in west-central Indiana were evaluated based on transactions reporting forms required by state law for all real property transfers starting in 2002. During the 2002 to 2004 period 208 transfers occurred in the county. The average sales price was $2,205 per acre with a standard error of the mean of $256.5. On average 42 percent of the land in the 208 transactions was forestland while 46 percent was tillable. The other 2 percent was homesteads and other uses. Based on multiple regression analysis total sales price was explained primarily by the acres of tillable ground. Acreage of woodland was negatively correlated with total sales price and less significant than tillable acreage. The value of improvements was positively correlated with total sales price and was significant. These three variables explained about 50 percent of the variation in total sales price. Over 61 percent of the transactions
were arm's-length-sales between unrelated parties. Over 9 percent involved settlements of estates, almost 8 percent involved retitling by owners to trusts, 6 percent were gifts to children, and 1 percent involved placing land in an IRA. The purpose for the balance of the transactions is not known. Only two of the transactions were splits off of larger tracts, clearly reflective of the rural nature of the county. The largest sales of tillable land involved incorporated farm businesses. Several sales of 50 to 150 acre tracts were to hunting club businesses. Another was to the local land trust. In only about a third of the sales was the buyer going to live on the property.
PARTICIPANTS: William L. Hoover
TARGET AUDIENCES: Individuals and units of government interested in land use changes in those counties in rural Indiana not subject to pressures from urbanization should be aware that although the pattern of ownership changes is consistent with historical trends, the increase in the land owned by absentee owners with less interest in how the land is managed must be taken into account for the natural resource base to provide the most benefits to families living in these counties. Although a small number of transfers involved purchases by conservation organizations and hunting clubs, the majority of absentee owners are holding the land as a passive investment. In only about a third of the transactions did it appear that the buyer was going to reside on the property.
PROJECT MODIFICATIONS: Reliance was not placed on a mail survey of sellers of land because of the large number of adresses that were not current. The forms required by state law for all real estate sales and kept in county court houses were the primary source of data.
Impacts
The results clearly indicate that in areas of Indiana not subject to development pressures from urban areas transfers of title to land follow historical patterns with tracts left in tact, rather than being subdivided. The mix of production agriculture with row crops and timber production on non-tillable land continued over the study period. The major threat to historical land use patterns is purchases by absentee owners who view the land as an investment to be held and not managed actively as required to maximize the benefits from timber and environmental services. These findings have been transmitted within the Purdue University Cooperative Extension Service, planning and zoning officials, and to landowner groups to assist them in setting land use policies.
Publications
- No publications reported this period
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Progress 10/01/05 to 09/30/06
Outputs
The focus this year was the potential impact of increased cash grain prices on the potential conversion of forestland and CRP land to tillable acreage. Cash rent was used as a proxy for net return to the landowner from the production of corn and beans. The Indiana Forest Products Price Index was used to estimate the return from timber production on well stocked existing forestland. Results indicate that managed well-stocked forestland provides a return competitive with grain, but that unmanaged forestland does not. Also, the long-time period from the end of a 15-year CRP contract for land planted in trees until a timber harvest can be made means that such land is not financially competitive with corn and bean production.
Impacts
Owners of forestland and CRP land adjacent to crop land should evaluate fully their land use options prior to making capital investments in land clearing to increase tillable acreage.
Publications
- No publications reported this period
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Progress 10/01/04 to 09/30/05
Outputs
Transactions data on sale of proeprty that include woodland have been collected for three counties in the vicinity of Tippecanoe County, location of Purdue University. Analysis of this data to determine the type of transaction has started, i.e. transfer with family, transfer due to death, or open market sale. The next step is to design questionnaires to be sent to buyers and sellers for each type of transfer.
Impacts
This research will provide a better understanding of the market for land that includes woodland. This information will be used to conduct a public policy analysis of alternatives ways to minimize the loss of woodland in a market economy with minimum zoning regulations.
Publications
- No publications reported this period
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Progress 10/01/03 to 09/29/04
Outputs
The names of buyers and sellers of forestland in Tippecanoe County Indiana have been obtained from court house transaction records. The preliminary survey to test the questionnaire will be sent out by the end of 2004. These results will be used to revise the questionnaire and send to a large sample of buyers and sellers in Indiana.
Impacts
The factors driving forest land use changes will be identified for inclusion by colleagues in land use change models.
Publications
- No publications reported this period
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Progress 10/01/02 to 09/30/03
Outputs
Data collection were continued with assistence from graduate students working on the Upper Wabash and IFAFS projects. Property record card data was entered into a data base to allow analysis of land use patterns, ownership, as well as the property tax burden by land use. Difficulties have been encountered, however, in identifying parcels that have changed ownership. The transactions record cards in the court houses that were to be used are not filed in any systematic way. It may be necessary to use data from multiple listing services to identify buyers and sellers of timberland.
Impacts
The factors driving forest land use changes will be identified for inclusion by colleagues in land use change models.
Publications
- No publications reported this period
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Progress 10/01/01 to 09/30/02
Outputs
Owners of forest land in sample counties are being identified from the assessment property cards. A survey will be mailed to these landowners to determine how they are using their land, when they acquired the land, and how long they expect to own it. They will also be asked about the factors that would motivate them to sell their forest land for development or other uses.
Impacts
Results will be used to educate real estate brokers about timberland markets, the advantages of conservation easements and other conservation options in order to gain their help in retaining critical natural habitats.
Publications
- No publications reported this period
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Progress 10/01/00 to 09/30/01
Outputs
I spent the first six months of 2001 on sabbatical at CATIE in Costa Rica. Although I dealt with Central American land use issues my sabbatical did not contribute directly to this project. I am now focused on identifying the socio-economic factors directly impacting forestland use patterns in Indiana. The primary sources will be US Population Census data and NRCS Natural Resources Inventory Data. The available information on forest land use in Central Indiana was summarized in the Fall of 2000 for a conference on land use in Central Indiana.
Impacts
Increased information for land use planners to use in making decisions about alternative development patterns in landscapes that include forestland.
Publications
- Hoover, William L. 2001. The wildland resource base in your community: what is it, where is it, and what is it worth. Proceedings, Central Indiana: Visions of a Region, Nov. 10, 2000, Indiana University School of Public and Environmental Affairs, Indianapolis, IN.
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Progress 10/01/99 to 09/30/00
Outputs
Available data has been used to determine that although the total area of forest land in Indiana has increased, the new forest land resulting from abandonment of wood pasture and old fields does not contribute to the timber base to the same extent as the forest land converted to homesites and other uses that leave the ownership partially wooded. Forest land is the prefered building site for the high end segment single family homes not built by tract developers. Work with the Indiana Forest Legacy Program, the Indiana Land Resources Consortium, and the Indiana Land Resources Council have demonstrated the need for more detailed data on forest land use changes.
Impacts
Urban sprawl and loss of rural character are due primarily to the loss of farmland, but the loss of forest land is also a major factor. Making decision makers aware of this loss and its impact on quality of life has increased the publics concern about land use issues in general and natural environments in particular. This awareness can be expected to eventually lead to changes in how land use decisions are made in Indiana by house buyers, land owners,developers, and professional planners.
Publications
- No publications reported this period
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Progress 10/01/98 to 09/30/99
Outputs
Major focus has been design of surveys to assess role of conservation easements and comprehensive planning process in the change of forest land to other uses. Landowners who have signed Wetland Reserve contracts with NRCS will be surveyed. Also, a random sample of county planning officials and county commissioners will be surveyed to determine their attitude toward the role of wildlands (forest and other land not built on or farmed) in the social and economic welfarre of their counties and communities. The 1997 Forest Sruvey data for Indiana is now available and it will be studied and compared to previous surveys to obtain any available insights on forest land use change. Cooperative work is also continuing with the Indiana Forest Legacy Committee and Indiana Land Use Consortium to identify critical research needs.
Impacts
Two major land use conferences have been held in Indiana with leadership from Purdue. Increased awareness of land use issues is expected to make research projects easier by improved cooperation from county and community planners and leaders.
Publications
- No publications reported this period
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Progress 10/01/97 to 09/30/98
Outputs
Focus was on developing research techniques and identifying cooperators. The Forest Survey of Indiana conducted by the US Forest Service will be complete by July 1999. This will be the main source of data for the project. Additional sources will be studies of land use changes conducted by county SWCD's and other local organizations. A procedure has also been developed to survey local planning officials regarding their willingness to consider forest and wetlands in their comprehensive plans and in the design of housing and commercial developments. The survey will be conducted in late 199 or early 2000. The results of this survey will be used to design educational materials and programs to empower planning officials to incorporate consideration of natural resources in their plans.
Impacts
(N/A)
Publications
- Hoover, W.L. and A. Hazlett. 1997. Indiana Land Use on the Edge: Report of the Indiana Agriculture and Natural Resources Land Use Working Group. Office of the Commissioner of Agriculture, Indianapolis, IN. 46 p.
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Progress 10/01/96 to 09/30/97
Outputs
The ability to predict the value of hardwood timber is limited by the species mix of any given stand. Stands consisting primarily of lower valued species can be predicted with a 60 to 70 percent accuracy over a five year period because the underlying lumber values are constant over many quarters and tend to increase in increments. The predictive accuracy for higher quality stands is much lower because the underlying lumber values undergo three to four year cycles during which prices change by as much as 20 percent. Some consistency was found among species in the trend and cyclical components of lumber prices. The trend component dominated the time-series for lower valued species such as poplar and cottonwood. The cyclical component dominated the time series for higher valued species such as the oaks, hard maple, and ash. Simulation of stand harvesting decisions indicated that the expected net present value of uneven-aged hardwood stands over two to three 10-year
cutting cycles was maximized by favoring higher valued species. However, the major determinant of future value was the ability of a given tree to increase in quality, i.e. grade of the butt log. This is due to the large difference in value between the best quality and lowest quality sawlogs. It is recommended that managers make harvest decisions on an individual tree basis using traditional financial maturity criteria. Analysis of single species stands, such as black walnut plantations, supports the traditional approach of holding the base price constant at the market price for the base year of the discounted cash flow and increasing this price at the indicated real linear price increase determined from historical data. Price increase based on a compound rate of increase are not realistic. This results primarily from the observation that black walnut lumber prices do not cycle but periodically increase or decrease in increments. Managing for the best quality trees likely to increase
further in quality should be the basic criteria to identify trees to remove in thinnings or harvests.
Impacts
(N/A)
Publications
- BENJAMIN, T. J., 1996. Financial analysis of a black walnut and corn agroforestry system. M.S. thesis, Purdue University, Department of Forestry and Natural Resources, 109p., Unpublished
- Hoover, W.L., GANN, R.W., 1997. 1997 Indiana forest products price report and trend analysis. Purdue University Agriculture Bulletin, 32p.
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Progress 10/01/95 to 09/30/96
Outputs
The hardwood lumber price time series data base was updated to keep it current for statistical analysis of the period from January 1947 to July 1996. Each price series has been broken down into its time series component parts: cyclical, seasonal, trend, and white noise. Statistical estimates of the first differences among grades of lumber were developed. Work was initiated on the Monte Carlo simulation of timber sales of a range of species and quality mixes timed to take advantage of market cycles, and sold at random. The annual survey of Indiana forest products prices showed a reduction in price levels for most species from 1995 to 1996. The weighted average price index for an average stand decreased by 6 percent from 1995 to 1996. The weighted average price for a quality stand increased by 10 percent. The decline was not sufficient pull the trend line for the study period, 1957 to 1996, down significantly. The trend is still for prices, both nominal and real, to
increase at about 1 percent per annum. Application of the price prediction procedure for black walnut logs was tested in an agro-forestry study. It was easily incorporated into a spreadsheet-based discounted cash flow analysis. One graduate student worked on this project during the period.
Impacts
(N/A)
Publications
- HOOVER, W.L., R.W. GANN, and G. DURHAM. 1996. 1996 Indiana Forest Products PriceReport and Trend Analysis. Purdue Univ. Office of Agricultural Research Programs, Bulletin No. 736, 30 pp.
- BENJAMIN, T.J. 1996. An Analysis for Black Walnut and Corn Agroforestry System. Unpub. M.S. Thesis, Dept. Forestry and Natural Resources, Purdue Uni., 108 p.
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Progress 10/01/94 to 09/30/95
Outputs
The hardwood lumber price time series data base has been updated for statisticalanalysis of the period from January 1947 to July 1995. Each price series has been broken down into its time series component parts: cyclical, seasonal, trend, and white noise. Statistical estimates of the first differences among grades of lumber are now being developed. The next step is to use the data in a Monte Carlo simulation of timber sales of a range of species and quality mixes timed to take advantage of market cycles, and sold at random. The annual survey of Indiana forest products prices showed a reduction in price levels for most species from 1994 to 1995. The weighted average price index for an average stand decreased by 3 percent from 1994 to 1995. The weighted average price for a quality stand decreased by 13 percent. Although large, these declines were not large enough to pull the trend line for the study period, 1957 to 1985, down significantly. The trend is still for prices,
both nominal and real, at about 1 percent per annum. Graduate Students: None.
Impacts
(N/A)
Publications
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Progress 10/01/93 to 09/30/94
Outputs
The hardwood lumber price time series data base has been updated for statisticalanalysis of the period from January 1947 to July 1994. Preliminary analysis shows a continued pattern of regular price cycles for the premium hardwood species in the upper grades. The cyclical patterns are much less pronounced for the non-premium species, and the lowest grades of all species. This indicates that market risk is greatest for timber sales involving high grade timber of the premium species. The timing of sales of lower grade timber and non-premium species is much less critical. The next step is to use the data in a Monte Carlo simulation of timber sales of a range of species and quality mixes timed to take advantage of market cycles, and sold at random. The annual survey of Indiana forest products prices showed a reduction in price increases from 1993 to 1994. The weighted average price index for an average stand increased by 21 percent from 1992 to 1993, but only 2.3 percent
from 1993 to 1994. The comparable changes for a quality stand were 18 percent and 4.5 percent respectively. As expected these changes were consistent with movements in lumber prices. A random survey of Indiana owners of rural land with trees revealed a strong interest in using forest land for environmental improvement and personal recreation. The typical owner is also interested in selling timber when appropriate, but shows much less interest in expending funds for improvement of timber stands.
Impacts
(N/A)
Publications
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Progress 10/01/92 to 09/30/93
Outputs
The time series data base containing hardwood lumber prices is being updated forinitiation of statistical analysis for the period from January 1947 to December 1993. Analysis of forest products price data for Indiana markets showed continued inflationary pressure. It's not clear what portion of the 15 percent overall price increase was due to supply factors, compared to demand factors. Preliminary analysis of timber inventory for the central states indicates that removals of the high quality portion of the inventory of the premium species like the oaks, cherry, and walnut exceeds growth. This is especially true for Indiana. A fundamental question to be addressed by the project is the extent to which sawmills and veneer mills can continue to offer higher prices for logs. To some extent higher log costs are absorbed by improved yields. However, commensurate price increases for lumber clearly indicate that a large portion of the increase is being passed through to
lumber buyers. Eventually, consumers will resist high prices for furniture, resulting in reduced demand. The extent to which lumber price increases increase furniture prices is unclear because of the ability of furniture manufactures to use substitute materials while maintaining the appearance of the product. These questions will be addressed.
Impacts
(N/A)
Publications
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Progress 10/01/91 to 09/30/92
Outputs
Markets for timber products strengthened further during 1992. The price index for the average stand of timber increased by 9.3 percent from April 1991 to April 1992. The increase over this period for a typical high quality stand of timber was 15 percent. Record high hardwood lumber production has brought into question the ability of the resource base to support this level of output in the long-run. Although total timber volume is increasing, the volume of oaks in the 12 to 14 inch dbh class declined. These are the trees that will support the industry in the early part of the next century. Also of concern is the decline in the quality of the timber base. The volume of timber in the best quality class of all species except ash and yellow poplar declined. The availability of data on market transactions involving timberland continued to be a significant problem. Becasue of the lack of adequate data the project was terminated as scheduled. Limited efforts to collect data
will continue, but are not the primary focus of the new project.
Impacts
(N/A)
Publications
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Progress 10/01/90 to 09/30/91
Outputs
Analysis of price data for hardwood timber products indicated that the markets remained strong despite a decline in overall economic activity. The increasing segment of the market accounted for by exports explains this trend. Comparison of economic activity between the five states in the Central Hardwood Region (Indiana, Illinois, Ohio, Iowa and Missouri) indicates that all respond in approximately the same way to economic cycles. The states with the largest secondary manufacturing component were the least cyclical, however. Further detailed analysis of County Business Patterns data will be used to determine overall activity for the region and differences between the states in the region. Econometric data correction techniques must be used to correct and fill in missing data because of the large number of inconsistencies in the County Business Patterns data. It's also apparent that the published data underestimates the overall level of economic activity in the
forest-products related industries in the region.
Impacts
(N/A)
Publications
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Progress 10/01/89 to 09/30/90
Outputs
Analysis of price data for hardwood logs and lumber indicated that the markets for these products are very responsive to changing economic conditions. There is, however, a significant time lag between the observed change in the general economy and the resultant change in the log and lumber markets. Comparison of price trends for timber and for other natural resources, both renewable and nonrenewable, indicate that timber is the only resource whose real price demonstrates a long-run increase. Additional work is needed to isolate the cause of this phenomenon. The major factor being considered is that on average the price of timber is not high enough to fully cover all replacement costs for timber harvested.
Impacts
(N/A)
Publications
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Progress 10/01/88 to 09/30/89
Outputs
Collection of transactions data on timberland sales continud. Data collection has proven to be difficult because of time delays in learning about sales and the detailed information needed on the timberland before and after a sale.
Impacts
(N/A)
Publications
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Progress 10/01/87 to 09/30/88
Outputs
Procedures have been developed for the collection of timberland market data. Reliance will be placed on a network of state and private foresters who will report transactions and provide detailed information when requested to do so. It is expected to take several years to collect sufficient data to conduct a preliminary analysis.
Impacts
(N/A)
Publications
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Progress 10/01/86 to 09/30/87
Outputs
Analysis of quarterly Indiana delivered log price data indicated that central hardwood timber prices moved above their long-run trend line levels. Timber and timberland prices have not been subject to the same deflationary pressures as farm land and crops in the corn belt. Analysis of real price trends for hardwood lumber by producing region, species, and grade was used to classify species by relative scarcity. Scarce species, black walnut and black cherry, demonstrated real price increases for all grades of lumber. Depleting species are those demonstrating real price increases for the top lumber grades. Exploiting species, the largest category, are those demonstrating decreasing prices for all lumber grades.
Impacts
(N/A)
Publications
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Progress 10/01/85 to 09/30/86
Outputs
Analysis of quarterly Indiana delivered log price data indicated that central hardwood timber prices recovered from the lows observed during the early 1980's and were near the long-term trendline for inflation adjusted prices. In addition, timberland prices experienced only about one-third of the price decline observed for cropland from 1984 to 1986. Analysis of long-term price trends for hardwood lumber by species and grade revealed substantial differences indicative of differing degrees of relative scarcity. Species were classified as being "scarce," "depleting," "transition," or "exploiting" based on whether real price increases had occurred for all grades, upper grades only, a mix of upper and lower grades, or decreasing for all grades, respectively. Only black walnut was determined to be a "scarce." Most of the oak species in all three hardwood producing regions were determined to be "depleting." Analysis of the 1982 Census of Manufactures for Indiana revealed
that, in general, the forest products industry in the state declined from 1977 to 1982, both in terms of employment and value added. In terms of volume produced, however, the hardwood lumber industry expanded. This decline may have been due in part to the fact that the general economy was in decline during 1982. The aggregate forest products industry was the sixth largest in the state in terms of employment, value added, and payroll.
Impacts
(N/A)
Publications
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