F2M Used in Mega Timberland Purchase

For RMS, an independent investment management firm managing forest investments throughout the southern U.S., a deal this size is uncommon and negotiations are often difficult.

 

“It speaks loudly when we reference F2M’s value for timber in a particular location,” said Dale Weizenecker, manager of forest operations for RMS. “F2M’s data is well established. IP, as well as others, accept it, and it is a useful basis from which an agreement can be reached." 

 

‘A Great Tool’

With about $3.3 billion in current assets under management, RMS is one of the largest forestland investment managers in the world. For many of its negotiations, RMS uses the F2M Free on Board (FOB) Delivered service, which allows it to evaluate its performance against its peers.

 

The service uses actual data from major forest product industry players to establish credible benchmark costs for delivered raw materials, including every variable associated with getting a tree removed from the forest and delivered to a mill. RMS uses the FOB Delivered service to see how it stacks up against its competition.

 

“The FOB service really lets you see what the market is saying about the different benchmarks for delivered materials,” said Weizenecker. “Being able to see the price breakdown for what it takes to get the wood delivered is a great tool.”

 

RMS Growth and Yield Models Uses F2M Data

Weizenecker said the F2M stumpage database has been especially helpful. “The transparency and detail associated the F2M data allows RMS to more precisely determine when to harvest trees."   Weizenecker added  “where we once applied a regional pricing model, F2M data now allows us to determine harvest timing on a market specific basis, an important element to improving investor returns.”

 

A key factor to timber pricing is tree size. “We use F2M’s pricing numbers in our model to calculate exactly what our timber is worth,” he said. “It tells me what size tree we should be growing based on local market factors.”

 

Weizenecker said RMS, which has been using F2M services for many years, will continue to look to F2M for advice in the future because its data is more reliable than any he has seen.

 

“F2M affords you confidence when you make important business decisions,” he said. “Its data speaks with authority.”