December 4, 2015
CapitalPress.com
13
Impact of Weyerhaeuser merger will depend on proximity
By MATEUSZ PERKOWSKI
Capital Press
A looming merger between
two major U.S. timber com-
panies will affect Northwest
forestland owners depend-
ing on their proximity to the
combined behemoth’s assets,
experts say.
Weyerhaeuser’s 6.9 mil-
lion acres would be joined
with Plum Creek’s 6.3 million
acres under a recently pro-
posed deal worth more than
$8 billion that the two compa-
nies say will provide an “un-
paralleled scale in timberland
ownership.”
“They now have a much
bigger footprint,” said Brooks
Mendell, president of Forisk
Consulting, which studies
timber industry fi nances.
In some areas, Weyerhae-
user’s new acres would rep-
resent a signifi cant increase
in its regional holdings, but in
others, its expansion will be
proportionately small, experts
say.
Timber companies
to join forces
The pending $8 billion merger
between Weyerhaeuser and Plum
Creek will create a company with
more than 13 million acres of
timberland in 20 states.
Timber acres
0-250,000
251,001-500,000
500,001-750,000
750,001-1 million
Greater than 1 million
Alan Kenaga/
Capital Press
Sources: Weyerhaeuser;
Forisk Research Quarterly
For example, the 338,000
acres acquired in Oregon
would boost its total amount
of property in that state by
more than 26 percent, while
the 31,000 acquired in Wash-
ington would increase its
holdings in that state by less
than 3 percent.
The potential impact on
landowners — in terms of
the prices they would obtain
for logs — is determined by
the number of Weyerhaeuser
acres and mills in their vicini-
ty, Mendell said.
Those who fi nd themselves
surrounded by Weyerhaeus-
er forests and near its mills
could be negatively affected
because the company will
likely prioritize processing its
logs rather than buying them
on the open market, he said.
“It really depends where
the acres are relative to a giv-
en landowner,” Mendell said.
Optimally,
landowners
profi t most when they’re near
several mills that compete for
logs, he said. If several mills
are owned by the same com-
pany, though, that reduces
competition.
“Where you have fewer
buyers from distinct compa-
nies, you have lower prices,”
Mendell said.
The combination with
Plum Creek would also give
Weyerhaeuser the opportunity
to buy more sawmills, he said.
As a real estate investment
trust, or REIT, the company is
able to forgo federal corporate
taxes as long as most profi ts
are passed along to share-
holders and non-timber assets
represent less than 25 percent
of the value of their total hold-
ings.
Plum Creek’s manufactur-
ing assets represent much less
than 25 percent of its hold-
ings, so by merging with that
fi rm, Weyerhaeuser’s propor-
tion of non-timber assets will
fall, Mendell said.
“When you bring them
together, Weyerhaeuser has
more room,” he said.
A sawmill buying spree is
speculative at this point, as
the company would fi rst ful-
ly integrate with Plum Creek
and reduce overlapping costs,
he said.
Forestlands owned by fam-
ilies are also insulated from
some of the turmoil in the log
market because they often
have other income sources
and can avoid selling when
prices are low, said Greg
Frohn, Pacifi c Northwest re-
gional manager for the For-
est2Market timber industry
consulting fi rm.
As a result, the trees are
generally harvested on a lon-
ger rotation and are consid-
ered higher quality, he said.
“Those small landowners
play an important role in the
supply chain,” Frohn said.
“You have a much larger di-
ameter tree on average.”
Competing sawmills may
also seek to build closer rela-
tionships with small landown-
ers to ensure a steady supply
of logs, Mendell said. “There
could be a business opportu-
nity there.”
It’s possible that Weyer-
haeuser consolidating timber-
land will make Weyerhaeuser
the dominant employer of
loggers in some regions, re-
ducing competition for their
services, he said.
Some logging fi rms fa-
vored by Weyerhaeuser may
displace others, but this “re-
alignment” isn’t expected to
put many loggers out of work,
said Frohn.
Sheep producers dispute study in grazing lawsuit
By MATEUSZ PERKOWSKI
Capital Press
Craig Reed/For the Capital Press
Tim Bare, right, manager of the K-Bar Ranches, and ranch em-
ployee Nathan Jackson check the sprinkler system and the stocker
cattle in a fi eld at the K-Bar Ranch near Myrtle Creek, Ore. That
ranch was purchased by the Cow Creek Band of Umpqua Tribe of
Indians from the Bare family in 2001.
K-Bar Ranches thrive
under Cow Creek Band
By CRAIG REED
For the Capital Press
MYRTLE CREEK, Ore.
— Being stewards of the land
had been a tradition of the Cow
Creek Band of the Umpqua
Tribe of Indians.
So getting back into the agri-
cultural business in 2001 was no
surprise for the tribe that is based
in Douglas County. The Cow
Creeks purchased the K-Bar
Ranch near Myrtle Creek, Ore.,
in 2001 and then acquired the
Rogue River Ranch near Med-
ford, Ore., in 2013.
The ranches provide pasture
for stocker cattle and grow al-
falfa, wheat and corn, most of
which goes to feed for the live-
stock.
“Being stewards of the land
is in their (Cow Creeks’) DNA,”
said John McCafferty, the busi-
ness operations offi cer for the
Umpqua Indian Development
Corp. “A lot of our member-
ship is involved in ranching and
timber in one way or another.
A lot of the members grew up
on small farms so agriculture is
something near and dear to the
tribe. And the tribe is good at it.”
The K-Bar Ranch is about
2,000 acres. It was established
in 1960 by Ken and Glenna Bare
and then became a partnership
with their sons Vern and Tim in
1976. One of the conditions of
the purchase by the tribe was
that one of those partners re-
main to manage the operation.
Since Ken Bare was looking to
retire, Vern Bare was more inter-
ested in a hay operation and Tim
Bare’s interest was in livestock,
Tim became the ranch manager.
“There wasn’t much more
room for us to expand in the
area,” Tim Bare said of his fam-
ily’s ranch. “The tribe had pur-
chased ground around us and it
had an interest in expanding its
land holdings. So there was a
conversation, one thing led to
another and a sale was made.
“I think it was a great move
for everyone in the family as
well as the tribe,” he said, add-
ing that his father did retire and
that his brother moved to the
Culver, Oregon, area where he
started a hay business.
K-Bar Ranches Corp. pur-
chased the 1,700-acre Rogue
River Ranch at the base of Table
Rock to expand its cattle herd and
increase its forage production.
The ranch also had a licensed
feed yard, allowing the ranch to
fi nish out its beef animals before
they are turned into steaks, roasts
and hamburgers.
PORTLAND — Several
sheep producer groups claim
the U.S. Forest Service relied
on skewed data to shut down
sheep grazing in 70 percent
of Idaho’s Payette National
Forest.
The Idaho Wool Growers
Association, joined by other
state and national groups, re-
cently argued before a federal
appeals court that the agency
ignored expert opinion and
used inaccurate models in
reaching its decision, which
was intended to protect wild
bighorn sheep from disease.
William Myers, an attor-
ney for the organizations,
asked the 9th U.S. Circuit
Court of Appeals to invalidate
the Forest Service’s decision
for violating the National En-
vironmental Policy Act during
oral arguments held Nov. 2 in
Portland.
The agency was required
under NEPA to seek the ex-
pertise of Donald Knowles, a
scientist at USDA’s Agricul-
tural Research Service who
specializes in disease trans-
mission between domestic
and bighorn sheep and found
signifi cant gaps in the For-
est Service’s analysis, Myers
said.
Because the agency didn’t
solicit his advice, the result
was a decision that’s prejudi-
cial to sheep producers who
relied on the national forest
for grazing, he said. “It’s not
harmless because the Forest
Service did not benefi t from
these comments.”
The Idaho Wool Growers
Association fi led a lawsuit
against the 2010 decision to
severely curtail sheep grazing
in the national forest but the
complaint was dismissed last
year by a federal judge who
said uncertainties about dis-
ease transmission were prop-
Carol Ryan Dumas/Capital Press
Sheep are moved down Main Street in Ketchum, Idaho, on Oct. 11 during the Trailing of the Sheep
Festival. Several sheep producer groups claim the U.S. Forest Service relied on skewed data to shut
down sheep grazing in 70 percent of Idaho’s Payette National Forest.
erly considered by the agency.
“Plaintiffs appear to be
correct that defendants did not
retain experts with specialized
expertise in disease transmis-
sion, but the failure to retain
such experts does not mean
that defendants lacked the
relevant expertise,” said U.S.
Circuit Judge Wallace Tashi-
ma, noting that the Forest Ser-
vice relied on extensive scien-
tifi c literature in concluding a
risk existed.
In their appeal, the sheep
groups argue the Forest Ser-
vice violated NEPA by ignor-
ing the best science available
in making its decision and not
heeding warnings that its dis-
ease models were faulty.
Two-day course to educate media,
food industry leaders about pulses
By SEAN ELLIS
Capital Press
KENDRICK, Idaho —
The USA Dry Pea & Lentil
Council will use a $140,000
specialty crop grant to educate
food industry leaders and food
writers and bloggers about the
nutrition and health benefi ts of
dry peas, lentils and chickpeas.
The funding, which was
provided by the Idaho State
Department of Agriculture,
will also showcase the versa-
tility of pulse crops as an in-
gredient in food products and
on food-service menus.
The conference “will allow
us to train the media about the
health, nutrition and sustain-
ability benefi ts these crops
bring to the table,” said US-
ADPLC CEO Tim McGreevy.
The council represents
about 5,000 U.S. growers,
warehouses and sellers of dry
peas, lentils and chickpeas.
Idaho and Washington farmers
grow the majority of the na-
tion’s pulse crops.
The grant funding will be
used to conduct a two-day
course for about 36 people in
late January at the Culinary
Institute of America in Califor-
nia’s Napa Valley.
The course will include a
specifi c audience in the food
industry, including media,
editors of trade publications,
dietitians and directors of na-
tional health movements such
as Michelle Obama’s “Let’s
Move!” campaign.
“They will get a chance to
work with pulse crops in the
kitchen, create dishes and, of
course, sample the fare,” Mc-
Greevy said.
McGreevy said most peo-
ple are only familiar with puls-
es as ingredients in soups but
the variety of food products
that include pulse ingredients
is expanding rapidly in the
Unites States.
“Our primary target is to
get major media into the ...
kitchen and show them the
versatility of all these pulse
crops,” McGreevy said. “Peo-
ple don’t know much about
using pulse fl ours and bake
products. We want to expand
their horizons beyond just
pulse soups.”
North Idaho pulse farmer
Robert Blair said he’s par-
ticularly glad the conference
is targeting food writers and
media.
“Ag normally gets ham-
mered in the media (so)
talking about the benefi t of
pulse crops with major media
is a great idea,” he said. “I’m
excited the pea and lentil as-
sociation is a leader in look-
ing at alternative methods of
marketing our crop. It’s what
we need to do more of in ag-
riculture.”
McGreevy said the course
is specifi cally designed to tie
in with the industry’s overall
effort to take advantage of the
United Nations’ proclamation
of 2016 as the international
year of pulses.
“This is a once-in-a-life-
time opportunity for us,” he
said. “We are investing a lot
of money trying to make this
the biggest opportunity for
our industry that has ever
come along.”
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