Bauers Family Tree Farm News

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Bauers Family Tree Farm News
Bauers Family Tree Farm News
        Miramar Costa Rica                    1/31/2019                      Issue No. 20

Farm Update January 2019

The tree farm is now at 12         have had and great deal of        are looking good and
years of growth and many           gratitude for all those who       benefiting from the annual
great things have been             have helped us get to where       leaf fall from the teak trees.
accomplished. An abandoned         we are. We are hopeful for        The leaves are quickly turned
cattle has been transformed        continued success as we move      into natural compost by the
back into a suitable habitat for   forward.                          abundant humidity, insects
animals, insects and plants.                                         and worms on the farm. The
The farm has helped to                                               groundcover is growing like
revitalize a rural community       The farm is in great shape        we want it to as well. The
by bringing jobs and               coming off the rainy season of    ground cover is growing
opportunities to the area.         2018. All the trees on the farm   enough to maintain the soil
There has been tremendous          are healthily growing tall and    from eroding, but not
growth of the teak trees that      straight. Nearly all the trees    growing so much that it will
were planted from seedlings        are fully canopied out and are    compete with the trees for
in the first part of 2007 to       flowering and producing           nutrients in the soils. There
large maturing trees by the        seeds on an annual basis (a       are several trees that are at a
end of 2018. We feel very          good sign of maturity). Soils     15-inch diameter at the base
fortunate for the successes we                                       and some of the trees are 70
Bauers Family Tree Farm News
feet tall. We continue to do     logs to be processed in India.   Getting back to some of the
annual pruning of the trees.     Unfortunately, no one was        indirect benefits of the farm.
This includes removing           able to provide any economics    We are very pleased with the
suckers that from the base of    of the sale that occurred.       reforestation of our 300 acres
teak trees as well as removing   However, a positive sign is      of land. Back in the 50s and
the lower                                                                      60s there was a
branches so the                                                                tremendous
trunks are long                                                                amount of
and straight.                                                                  deforestation
                                                                               taking place. The
An interesting
                                                                               country was
development for
                                                                               focused on
the farm this year
                                                                               improving their
had to do with
                                                                               economy through
our neighbor to
                                                                               beef production
the east. Since we
                                                                               and an alarming
purchased our
                                                                               amount of forest
farm in late 2006
                                                                               was being taken
the neighbor has
                                                                               down to make
had teak planted.
                                                                               way for cattle
Their property is
                                                                               ranches. It is
significantly
                                                                               estimated that
smaller than ours
                                                                               during this time
totaling about 8
                                                                               beef exports from
hectares of
                                                                               Costa Rica
planted teak. The
                                                                               increased some
property changed
                                                                               500%. Some
ownership about
                                                                               estimate to make
5 years back. The
                                                                               way for these
new owner chose
                                                                               cattle some 40%
to do a final
                                                                               to 50% of the
harvest of all the
                                                                               country’s forests
wood on the
                                                                               were taken down
property.
                                                                               to make way new
Though details are sparse we     that they went on to replant
                                                                  pastures. Costa Rica
understand that more than 50     the entire farm in teak again.
                                                                  significantly changed their
container loads of wood were     This give us a good indication
                                                                  policies in the late 70s and 80s
taken out of the property.       that they saw value in
                                                                  and looked to conservation.
The buyers where a group out     repeating the process.
                                                                  In addition, Costa Rica looked
of India and the wood was
                                                                  to reforestation to rebuild the
transported in the form of raw
                                                                  forests of the country. As of
Bauers Family Tree Farm News
today, it is estimated that      property, parrots fly from tree   or to small surrounding
about 34% of the country is      to tree, hummingbirds             community. Since that time
protected by government          sipping the nectar from           electricity has come up the
through national parks,          flowering plants/trees on the     road providing a huge quality
wildlife refuges, and            property and there are a          of life improvement to all.
biological reserves. This is     whole host of small reptiles      Another transformation that
important to the wildlife as     and mammals that are              has occurred is with the
Costa Rica boasts the globe’s    enjoying the newly supplied,      family that has cared and
highest                                                                         watched over our
biodiversity                                                                    property for the
density,                                                                        past twelve years.
providing a                                                                     When we first met
home for                                                                        the Briones family,
more than                                                                       they were living
500,000                                                                         in a house with
species.                                                                        dirt floors, no
Conservatio                                                                     windows and no
n has also                                                                      electricity. A
made                                                                            small pipe
economic                                                                        brought the only
sense for the                                                                   running water
country as                                                                      into the house and
Costa Rica                                                                      cooking was done
has made                                                                        over a fire. The
tourism and                      cover and food supply that                     family now lives
more specifically eco-tourism    the farm provides.                in a modern house with
as leading foreign exchange                                        everything one would expect.
earner. We are proud to          In addition to an increase in     Windows, indoor plumbing,
contribute to Costa Rica’s       flora and fauna thee has been     floors and modern appliances.
success in their environmental   a significant economic impact     The Briones family have
transformation.                  on the farm and the               raised 3 delightful girls
                                 surrounding community. The        (Nyudel, Kimberly and
On a micro scale adjusted to     farm has provided a host of       Franciney) and now have 2
our property, there has been a   jobs to the local community.      grandchildren as well
dramatic change from the         Many people were hired for        (Samantha and Tamara).
reforestation of the land. We    the planting and caring for the
have seen a large increase in    trees as well as taking care of   We continue to be optimistic
animal life on the farm. Just    the property. When we             about the farm’s future
to name a few - howler           purchased the property back       including its economic
monkeys are seen traveling       in 2006 there was no              prospects and ecological
through the trees on the         electricity coming to the farm    /social benefits. We are still
Bauers Family Tree Farm News
planning a thinning 2 years        continues to be the largest          Natural teak sources continue
from now. Performing               purchaser of Teak logs in            to diminish. This especially
thinnings in larger chunks         Costa Rica. Over the next            true as Myanmar, the largest
rather than smaller ones           years we will continue our           exporter of teak, banned new
significantly reduces the          market research to see if we         exports several years ago.
harvesting and transportation      can find better avenues to           Plantation teak is hitting the
costs of removing logs from        sales. As mentioned in earlier       market more and more as
the farm. As thinning are          newsletters younger less             plantations that were planted
done heavy equipment and           mature teak is more                  some time ago are having logs
trucks will be needed to           challenging to sell than             ready to be sold. This is
extract logs and we will need      mature teak due to it its            important and helps the
to do quite a bit a                higher content of sapwood,           market for plantation teak
maintenance on interior roads      wider growth rings and less          expand.
to accomplish this.                anti weathering characteristics
                                   that mature logs have.
We continue to explore the
best and most accessible           Over all the market for teak
markets to sell logs into.         continues to look good and
Currently it appears that India    demand remains positive.

Harvard’s Timber Empire

Below we have copied an            After suffering a huge drop in its   amount of land is acquired,
excerpt from Harvard’s             endowment in 2009, Harvard           cleared, and planted with a
newspaper The Harvard              Management Company, the              monoculture of fast-growing
Crimson talking about              subsidiary that manages              trees like eucalyptus or pine.
Harvard’s expansion into           Harvard’s $32 billion                These trees are harvested in a
timber investing since 2009.       endowment, has sought ways to        rotating cycle and sold to make
                                   “diversify” its holdings. In         paper or wood products.
Brasil Timber Limited, Empresas
                                   recent years, this has meant
Verdes Argentina, and                                                   Under the leadership of a few
                                   purchasing and managing
Scolopax—these sound like the                                           investment managers—in
                                   dozens of timber plantations in
names of corporations you might                                         particular, Managing Director
                                   the developing world. Although
learn about in a course on                                              and Head of Alternative Assets
                                   these plantations have different
“Globalization and Agriculture.”                                        Andrew Wiltshire—Harvard has
                                   names, local managers, and
In fact, they’re all timber                                             expanded its direct natural
                                   business practices, many seem to
plantations that Harvard                                                resource holdings. Wiltshire used
                                   follow the same model. On each
University fully owns.                                                  to work for the New Zealand
                                   timber plantation, a large
Bauers Family Tree Farm News
Forest Service, which, according    Zealand, which generated $4.4     invested in “forests, farms, and
 to a reporter from WealthDaily,     million of income for HMC in      other natural resources.” HMC’s
 originally developed the massive    2011. Since then, Wiltshire has   publicly filed IRS Form 990 lists
 Kaingaroa Timberlands in that       worked with HMC Chief             over 270 companies as “Related
 country. In 2003, two years after   Executive Officer Jane Mendillo   Organizations Taxable as a
 he came to Harvard, Wilshire        to build Harvard’s investments    Corporation or Trust”—
 orchestrated HMC’s purchase of      in “alternative assets,”          corporations of which Harvard
 Kaingaroa. Though Harvard           particularly timber.              owns 50 percent or more—and
 subsequently sold part of the                                         dozens of those hold timberland.
                                     Exactly how many timber
 timberlands, it still made almost                                     As well as New Zealand,
                                     plantations does Harvard own?
 $87 million from Kaingaroa in                                         Harvard has large timber
                                     Bloomberg News estimates that
 2011. Wiltshire also oversaw                                          holdings in Brazil, Romania,
                                     over 10 percent of Harvard’s
 HMC’s subsequent purchase of                                          Argentina, Chile, Ecuador, and
                                     endowment—over $3 billion—is
 the Big Sky Dairy Farm in New                                         Uruguay.

 Promising Future

 We look forward to the future
 of the farm and the trees as
 we start into the next phase,
 transitioning from growth
 and maintenance of the trees
 to commercialization of the
 logs and lumber coming out
 of the farm.

 Thank You,

 Jake, Joe and Jaime

Bauers Family Tree Farm
Miramar Costa Rica
www.bauersfamilytreefarm.com
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