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THE FLORIDA FOREST STEWARD  A Quarterly Newsletter for Florida Landowners and Resource Professionals
Volume 8, No. 3                                                             Fall 2001
 
Estate Tax Update
Minimizing Losses from Fusiform Rust
Farm Bill Conservation Programs on the Line
Timber Tax Simplification Bill
Wildlife Plant Feature: Beautyberry
Ask Joe Steward
Timber Price Update
 
A University of Florida Cooperative Extension Service and Florida Division of Forestry joint project:  

Chris Demers (editor), School of Forest Resources & Conservation, UF, P.O. Box 110410, Gainesville, FL  32611-0410, (352) 846-2375 or cdemers@gnv.ifas.ufl.edu 
Alan Long (co-editor), School of Forest Resources & Conservation, UF, (352) 846-0891 or AJL@gnv.ifas.ufl.edu  
Todd Groh (co-editor), Florida Division of Forestry, 3125 Conner Blvd, Tallahassee, FL 32699-1650, (850) 414-9907 or groht@doacs.state.fl.us  
Chuck McKelvy (co-editor), Florida Fish and Wildlife Conservation Commission, 3125 Conner Blvd, Tallahassee, FL 32699-1650, (850) 414-9911 or mckelvc@fwc.state.fl.us

 
 Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida 
 

Estate Tax Update

 
Our Estate Planning for Forest Landowners workshop last June offered some very important information for participants. Lyle Wolding, of Grower and Rancher Estate Tax Advisors, presented helpful planning strategies for conserving the estate, prefaced by the latest news on the estate tax. President Bush's Relief Act of 2001, or H.R. 1836, now signed into law, yielded limited results with respect to the estate tax. H.R. 1836 gradually increases the unified credit exemption, while reducing the top estate tax rate between 2002 and 2009, with a 12-month repeal of the estate tax in 2010. That 12-month detail is important because this repeal "sunsets" on January 1, 2011, at which time the top estate tax rate and unified credit revert back to today's tax law*, unless congress re-repeals the tax by December 31, 2010. 

Clearly, this temporary estate tax repeal could be costly for families that assume the repeal is permanent. Unless you are certain that you will die in 2010, it is best to plan the transfer of your estate according to current tax law. Provisions under the federal tax law allow landowners to protect or "shelter" their assets from estate taxes by creating trusts and/or making tax-free gifts. Talk to a financial advisor, tax law attorney or certified public accountant to explore your options. This is perhaps the most important step you can take to secure the future of your property for your children and grandchildren. 

*On January 1, 2011, the top estate tax rate will revert back to 55% and the unified credit will drop back to $675,000 or $1 million, a matter of law interpretation. 
If you have Internet access go to www.house.gov/jct/x-50-01.pdf for a printable version of the Joint Committee on Taxation's Comprehensive Summary of H.R. 1836, or call Chris Demers at 352-846-2375, cdemers@gnv.ifas.ufl.edu to have a copy mailed to you. 

 
 
Minimizing Losses from Fusiform Rust
 
Fusiform rust, a disease caused by a fungus (Cronartium quercuum f. sp. Fusiforme), has become an epidemic in slash and loblolly pine plantations across the south since the early 1960s. Unlike most pathogens, fusiform rust attacks healthy, rapidly growing trees instead of weakened trees, creating a dilemma for managers seeking to boost the productivity of their plantations. The increase in intensively managed plantations of loblolly and slash pines, the fungus' preferred pine hosts, has created favorable conditions for extensive spread of the disease. However, knowledge gained about the fungus and its life cycle has been used to develop strategies to minimize losses from infection. 

Biology and Ecology 
Fusiform rust is unique in that it cannot spread from pine to pine but rather passes to an alternate host, red oaks, before infecting another pine. The fungus produces five types of spores during the course of its life cycle - two occur on pine stems and branches, the other three on the underside of red oak leaves. The most important red oak hosts are water, laurel, willow, and southern red oak. Cherrybark, bluejack, runner, and blackjack oaks are also important hosts on certain sites. Young oak leaves are infected in the spring by wind-borne spores produced on pines, and new pine leaders are infected later in the spring and summer by wind-borne spores from oak leaves. The fungus requires no wounds on either host to establish. Once a pine is infected, the perennial fungus causes a swelling, or gall, on the stem or branches, which often becomes infected by other fungi and insects and eventually is weakened and deteriorated. 

Site characteristics that favor high fusiform rust incidence are those that are associated with abundant oaks - well-drained soils with a sandy surface and organic horizon. Conversely, poorly drained soils that do not support abundant oaks are less likely favorable for rust development. 
Fusiform canker, USDA Forest Service 
Identification and Control 
The disease can be identified by swellings on pine stems or branches, where many yellow-orange fungus spores are produced in the spring. Unfortunately, once a young stand is infected with fusiform rust, there are few options available to save the whole stand. The key to minimizing losses is prevention, which starts with an assessment of the risk of rust incidence before plantation establishment. Risk can be estimated by observing: 

-the level of rust incidence in nearby young, planted stands; 

-the abundance of susceptible oaks in and around the site to be planted; 

-the soil type; and 

-the growth potential of the site. 

If these cannot be estimated from field observation try looking at a soil map. The drainage category of the soil will give you some idea of its productivity and its capacity to support oaks. Your county forester can help you interpret a soil map to determine your fusiform risk level and he or she may know about the level of disease incidence within the county. 

The most effective way to prevent rust in high and moderately high-risk areas is to plant rust-resistant seedlings, which will reduce rust incidence by two-thirds. Note that not all genetically improved seedlings are rust-resistant. Some seedlings are improved only for growth, which, if planted on a high-risk site, will compound the rust problem. Rust-resistant seedlings cost more than regular seedlings but will more than pay for themselves in the long run. It has been estimated that $20 is returned to the landowner for every dollar invested in research on disease resistance2

In addition to planting rust-resistant seedlings, these vegetation management techniques can reduce oak growth as well as provide early competition control: 

    -chemical site preparation on previously forested sites that contain oaks, 

    -summer controlled burns discourage oak competition; 

    -KG blading, followed by disking, to reduce oak regrowth

If a stand becomes infected with fusiform rust, remove stem-infected trees and utilize them to the extent possible. Galls formed within 12 inches of the main stem can grow into the stem, thus timely pruning of limb galls from young infected trees can prevent further damage. 

For more information about fusiform rust and other insect and disease problems, see the Florida Forestry Information Web site linked at the top of this newsletter, or the Division of Forestry's Insect and Diseases page at: 

www.fl-dof.com/Pubs/Insects_and_Diseases/index.htm 

1Schmidt, R.A. 1998. Fusiform rust disease of southern pines: biology, ecology and management. Tech. Bull. 903. FL Coop. Ext. Serv., IFAS, University of Florida, Gainesville, FL. 

2 Schmidt, R.A. 2001. Fusiform rust of southern pines: preventing and minimizing financial loss. Forest Landowner 60(3):18-21. 


 
Farm Bill Conservation Programs on the Line
  
 
The 1996 Farm Bill will expire next year and legislators are in the midst of hearings and debates to determine how to rewrite the next version in the context of a significant tax cut. Among the many subjects of debate, and of special concern to landowners in need of financial and technical natural resource management assistance, is if and how to reformulate existing USDA cost-share programs like the Conservation Reserve Program, Farmland Protection Program, Wetland Reserve Program, Forestry Incentives Program, Wildlife Habitat Incentives Program, and Environmental Quality Incentives Program. 

Also on the table are some new conservation programs. The Sustainable Forestry Incentive Program, a combined and enhanced version of the Forestry Incentives and Stewardship Incentives Programs, would provide financial and technical assistance to landowners providing public benefits such as recreation or wildlife habitat. In addition, the Program would increase federal aid for tree planing, thinning, site preparation, and management plans. Another new program, the Sustainable Forestry Outreach Initiative, would reauthorize and expand the Renewable Resources Extension Act, designed to educate forest landowners about sustainable forestry practices and the availability of professional natural resource management assistance. 

The interests of private forest landowners are being represented in this process by the National Council on Private Forests, a Washington DC-based group of representatives from several natural resource management organizations including: the American Tree Farm System, National Association of Professional Forestry Schools, Forest Landowners Association, Westvaco Corporation, and the Society of American Foresters. Make your voice heard by contacting your legislators. You can find the contact information for your legislators on-line at www.vote-smart.org/index.phtml.


 
Timber Tax Simplification Bill
  
Private landowners who regularly sell timber are currently required to "retain an economic interest" in their timber until it is sold in order to receive capital gains treatment on their income. This means the seller must sell timber under contract terms that ensure that the seller bears all the risk, and is only paid for timber as it is harvested. This method of payment, referred to as pay-as-cut, can place a disproportionate burden on the seller because it may encourage fraud in the scaling process and waste of timber resources by the buyer. 

The Timber Simplification Act, proposed by both the U.S. Senate and House, may eliminate this exclusive "retained economic interest" clause which would allow lump sum sales to also qualify for capital gains treatment. The Joint Committee on Taxation has determined that this correction would have negligible effect on federal revenue and the bills have the support of many groups, including the Internal Revenue Service. The Forest Landowners Tax Council strongly favors the Tax Simplification Bill because it will improve the economic viability of forest investments, which will benefit the entire forest products industry and private landowners. Overall it will allow harvest contracts to be based on sound forest management practices instead of the tax law. 

For more information about this bill and its status, see the Forest Landowners Tax Council Web site at www.fltc.org.


Wildlife Plant Feature: Beautyberry
 
This regular column will feature descriptions of plants that are important sources of wildlife food. This issue's wildlife plant is beautyberry. Also known as French mulberry and beautybush, beautyberry grows in a variety of environmental conditions across its range, from Texas to Florida, north to Maryland and west to Oklahoma. It is an early successional plant, common under open pine and oak canopies and along forest edges. Beautyberry persists, sometimes increasing in abundance, after mechanical site preparation and burning, and it is spread by bird-dispersed seeds. 
photo by Larry Korhnak 
Form: bushy, deciduous shrub, 4-6 feet tall with spreading branches, and grows in sparse colonies. 

Leaves: deciduous, oval to lance-like, 3-7 inches long, 1-4 inches wide, with coarsely serrate margins and tapered base and tip; when crushed, leaves have a very distinct unpleasant odor. 

Flowers: June-July, dense clusters of 5-lobed, pinkish-white flowers on short stalks. 

Fruit: August-January, round purple berry containing 4 seeds. Fruits are in characteristic, regularly spaced clusters encircling the stem. 

Wildlife value: fruit are consumed by over 40 species of birds, deer, raccoons, opossums, and several small rodents. Leaves are eaten by white-tailed deer when their preferred food is not abundant. 

Reference 
Miller, J.H. and K.V. Miller. 1999. Forest Plants of the Southeast and their Wildlife Uses. Southern Weed Science Society. Champaign, Ill. 454 pp. 

For more information on wildlife food plants see the reference above or the University of Florida's 4-H Companion Plant page at: www.sfrc.ufl.edu/4h/Trees_Plants/Plants/plants.html 
 


Ask Joe Steward
 
Pines and Wildlife 
An increasing number of landowners are interested in providing habitat for wildlife and Stewardship biologists Leslie Hawkins and Wayne Harris work hard to help landowners manage for game and nongame animals. This question is one that Leslie gets quite a bit. 

Q: Which southern pine species is best for wildlife? 

A: As you might have guessed, longleaf pine is superior to its relatives, slash and loblolly pines, in terms of wildlife value and benefits. Longleaf pine produces larger, more nutritious seeds, preferred by many birds and small mammals. In addition, its relatively open crown during development and at maturity allows a variety of herbaceous browse to grow in the understory, benefiting many wildlife species. Longleaf pine also has several adaptations that allow it to tolerate and survive low intensity surface fires. These adaptations include: an interim stage of development between the seedling and sapling stages known as the grass stage, which gives the tree additional protection from fire; a terminal bud that remains near ground level for several years; and long, dense, moisture-laden needles. Longleaf's adaptation to fire gives landowners a unique opportunity to burn early in the rotation, which promotes an understory of succulent grasses and forbs that are eaten by many animals. 
Longleaf has these advantages but slash and loblolly pines are not without certain benefits to wildlife as well. According to proceedings from a symposium on the managed slash pine ecosystem, wetter sites, where slash pine is usually planted, have much less herbaceous seed production than on the more upland sites where longleaf is often planted. However, these wetter slash pine sites are home to abundant insects, which are food for a variety of birds, especially winter migrants. With respect to loblolly, a quick glance at the crown of a loblolly pine usually reveals hundreds of persistent cones that produce a great abundance of seeds on which many birds feed in the spring. The bottom line for wildlife is active management. All planted pine systems can provide wildlife benefits if managed properly - periodic mowing and/or burning, and a wildlife-friendly spacing should be considered when planting (i.e., 500 to 600 trees per acre, not 800-1000). In addition, longer rotations with multiple thinnings will also increase wildlife use and productivity within these plantations. 

Regardless of your preferrence, matching the correct species to the site is an essential first step with any reforestation effort. 

To Cut or Not to Cut 
Southern pine beetle is a significant problem for many landowners again this year, especially in the north-central part of the state, and they are faced with this question: 

Q: Should I cut my trees that have been attacked by southern pine beetle? 

A: Dr. John Foltz of the University of Florida Department of Entomology suggests that anyone suspecting southern pine beetle immediately contact their county forester for an inspection and recommendations. During outbreaks, beetles emerging from one infested tree have the potential to attack and kill ten additional nearby trees. Like fire suppression during dry periods, quick detection and quick action by all landowners is necessary to minimize tree mortality and the economic losses. For additional information, see the Department of Entomology's Web site at eny3541.ifas.ufl.edu.


Timber Price Update
 
Stumpage price ranges reported across Florida in the 2nd quarter 2001 Timber Mart-South (TMS) report were: $17-$28/cord for pine pulpwood, $58-$84/cord for pine C-N-S, $79-$102/cord for pine sawtimber, and $94-$119/cord for pine plylogs. On average, prices were down, up, down, and the same for the four products, respectively, compared to 1st quarter 2000 prices. Hardwood pulpwood prices ranged from $9-$15/cord, which was up significantly from the previous quarter. A more complete summary of 2nd quarter 2001 stumpage prices is available at your County Extension or County Forester's office. 
Trend Report 

Overall, not much has changed since the last quarter except for a fairly dramatic increase in hardwood pulpwood stumpage prices. As was the case last year at this time, wildfire and southern pine beetle salvage cuts are keeping the mills full of pine, but there is some apparent demand for hardwood. Where the prices go next will depend on several factors: the weather, bugs, economy and Canadian lumber imports. 

Canadian Lumber Trade Update 
March 31 marked the final day of the Canadian Softwood Lumber Agreement (SLA), signed in 1996 by the U.S. and Canada to restrict the import of lumber cut in British Columbia, Alberta, Ontario and Quebec because of heavy industry subsidization by the Canadian Government in those Provinces. In response to U.S Commerce Department concerns that the large supply of lumber from Canadian imports will depress stumpage prices for U.S. producers, the Bush Administration decided to impose a preliminary countervailing duty of 19.3% on Canadian softwood lumber. Many believe the Commerce Department has largely underestimated the scale of Canadian subsidies and that the duties should be higher to fully offset the effects of the imports. Others argue that several tax provisions and programs benefit U.S. lumber producers, leveling the "playing field" and thereby making trade restrictions with Canada unwarranted.  In particular, U.S. producers that sell timber to Canadian mills are against imposing such a tariff because it will depress prices offered by Canadian mills. The preliminary duty took effect August 20, but it will not be finalized until the U.S. Trade Commission makes a final decision that Canadian imported lumber is hurting the U.S. forest products industry, and the Commerce Department must issue a final order for the tariff.