Next Generation Woods, Inc. 
       
ECOLOGICALLY RESPONSIBLE WOOD PRODUCTS
                           WHILE ENHANCING OUR FORESTS FOR OUR CHILDREN

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Blue Ridge Forest Landowner Co-op

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We're currently working to form the
    Blue Ridge Forest Landowner Cooperative.

Briefly, a forest landowner cooperative is a way to produce more income for a forest landowner.  This is done by: pooling resources with other local forest landowners, by adding value to the forest products, and with centralized marketing to get the highest returns possible.  This higher return allows the forest landowner to practice sustainable forestry (taking the worst, leaving the best, and implementing strong ecological/environmental safeguards.)

 

  • In Virginia, a Cooperative is a Corporation in which each shareholder has one share and one vote.  Shareholders are typically producers since they have the most to gain from participating.

 

  • Cooperatives are formed, primarily,  to increase the financial return to the producer by marketing products and/or reducing the cost of supplies.   However, they can have many more functions and benefits including working toward common environmental, ecological, and social goals.

 

  • Dividends are typically based on a producer’s contribution—in this case, based on forest products sold thru the Co-op, however members are under no obligation to sell to the Co-op. The size of the landowner’s forest is irrelevant- ten acres or 1000—all are needed to restore our forests at the local and landscape levels.

 

  • Co-op’s increase the value of the producer/member’s raw materials. (Notable examples include Ocean Spray and Southern States.)  Value addition is the key to maximizing returns, which often makes forest restoration work pay for itself.

 

Real-life Examples:

 (All are based on a “Take the Worst-Leave the Best” harvesting criteria)

 Be sure to read the "Notable Example" below...

 

v   Based on Timbergreen Forestry’s experience, by taking lumber and converting it to flooring, paneling, molding, or trim the value of the finished product ranges from 20 to 70 TIMES the stumpage price of the tree.  This is the power of value addition. 

 

v   By pooling the timber of 130 members, Sustainable Woods Cooperative of Lone Rock, WI has the resources of over 10,000 acres to draw from.  Members have invested only $100 for their stock and $2 per natural acre of forest (average of 80 acres per member, or $160.)  They also use a “market stock” tool at 10 cents per board foot to reserve a place in the production schedule—so if you were going to harvest 30,000bf within the next 3 years you’d need to purchase $3000 worth of market stock.  Market Stock is redeemable after the timber is supplied to the Co-op. 

 

v   Dividends are based on the percent contribution to yearly production.  In the case of the 30,000bf contribution above, if this were out of an annual production of 300,000bf, then 10% of the Cooperative’s profit would be paid out to you.

 

v   Projections done by the Kickapoo Sustainable Woods Cooperative indicate (with all the costs accounted for) a Coop member would net $9,500 more than a non-Coop member would--assuming each landowner did the same management and harvesting practices over a 10 year period..

 

 

A Notable Example

…of the compounding interest effect of leaving the best trees, and the power of adding value to your forest products…

 

A 12inch diameter oak that would have been worth $3.15 twenty years ago has grown to be a 16” tree and is now worth $31.83.  That’s roughly a 900% increase in value. (...but you also see why selling timber isn't a big money maker unless you have a lot to sell, or you're selling only very high quality trees!)

 

If you sawed that tree (scaling 200 board feet) into lumber  (with a band sawmill, you’ll get about 300bf) and sell it green, you’d get, on average, $120 for the lumber.  If you kiln dry it you’ll get $500, and if you make it into flooring you’ll get $899! 

 

If you were a member of a Coop, you wouldn’t have to invest in, nor maintain, the equipment to produce these products—yet you’d still reap the benefits of adding value to the products of your forest.

 

Let’s say this tree was still healthy at the harvest scheduled above, so you let it keep growing for another twenty years, and it becomes a 20-inch diameter tree.  Even if lumber prices didn’t go above today’s levels [a highly unlikely scenario,] the tree would be worth $55.20 on the stump, $199.80 as lumber, $750 kiln dried, and $1500 as flooring! 

 

This example illustrates the wisdom of leaving the trees that are growing well to keep growing.  …as well as the benefit of adding value to your forest products.

 

 

Other considerations to keep in mind:

 Most folks follow a “management philosophy” of benign neglect:  just let the forest grow!  There’s nothing wrong with this philosophy, but it isn’t “management!”  You CAN manage your forest, keep it looking like a forest, make money, and maintain—even improve—the health of your forest.

 

A Cooperative will put you in a position to realize your forest management goals, conserve and improve your forest health, make money, and nudge your forest back toward old-growth.  It cuts out the intermediaries who, in the traditional system, make most of the profit and disregard their ecological, environmental, and social consequences.

 

A Cooperative is a community of like minded forest landowners participating in, and enjoying the benefits of, a synergistic relationship:  Conservation, Education, Professional Forest Management, Marketing, Financial Planning, Value Addition, Group Purchasing of Supplies, Co-owning Equipment, and More.

 

If you have forest land in the Central Blue Ridge area and are interested in Certified Sustainable Forest Management,

please call  or email us at:

Co-op@nextgenwoods.com
 

If you're in another area and interested,

 contact the Community Forest Resource Center on our links page to find out if there's a Co-op near you.  They also have information on starting a Co-op, complete with resources like sample By-Laws, experts, books, and links to others who can help.