The price of gold is going crazy as investors look for a shelter from a
dipsy-doodling stock market.
It reminds me of one of my grandfathers
stories. During the bad financial times of the early 1920s in Germany, the
peasants (ancestors of ours) traded their potatoes for gems that the rich
people were forced to pay to get something to eat.
That story is one
reason why in 1974, I took my family out of Philadelphia where I had a good
job, bought a little piece of land in my home country, built a house on it,
and prepared for a severe economic depression, which fortunately did not come.
Yet.
The only requirement I insisted on in looking for land was that
it have several acres of woodland on it. I knew I could have a garden
producing food in a hurry, but it takes time to grow the wood to keep a house
warm and to cook with, if it came to that. I did not want to depend entirely
on faraway oil to stay alive, and in a pinch I wanted to get by without
electricity if I had to.
Whether I am just paranoid or prophetical I
dont know yet, but as I sit in my woods, resting from the work of splitting
firewood, that decision has continued to make sense to me even in times of
stable economics. (Is our economic system ever stable?) What I have gained in
enjoyment alone makes my investment in two mature woodlots at least as
profitable as investing an equivalent amount of money in gold.
You
cant eat gold like you can the bounty of trees in fruits, nuts, maple syrup,
and various edible mushrooms and herbal treasures of the woodland. You cant
warm yourself with gold. You cant bask in the shade of gold. You cant make
fence posts out of gold. A gold house would be mighty expensive. You cant
make a windbreak out of gold. You cant make furniture, violins, guitars, wall
paneling, picture frames, gun stocks, tomato stakes, flooring, barns, chicken
coops, and hog houses out of gold. You cant mulch a garden with gold leaf.
Gold does not take in carbon dioxide and give off oxygen to preserve an
environment we can live in. Gold does not provide habitat for millions of wild
animals and zillions of insects necessary for a sustainable environment. And
in fact, you can make methane out of wood much more efficiently than ethanol
out of corn. All gold can do is go up and down in price and invariably it
turns out to be a poor investment, as many panic buyers learn the hard
way.
Ive known my two woodlots intimately for over 70 years.. The one
of ten acres was my playground as I grew up. The other, of about four acres
two miles away, I also tramped as a child and have lived in, literally, for
the last 34 years. There are so many ways to figure the value of woodland, so
many intangibles that dont show up on ledgers, that I doubt anyone can make
an accurate estimate. But I want to try, using only my own rather
uncomplicated experiences, leaving out intangibles like how the tranquility
and exercise Ive gained from caring for my woodland may have affected my
health beneficially.
I paid $700 an acre for the four acre woodlot in
1974 and $2000 an acre for a ten acre woodlot in 1979. The four acre plot was
really the lot for our house, so to speak, and so it is hard to try to
calculate its value as woodland alone. So I will focus on the ten acres
although what is true for one is true for the other.
Twenty thousand
dollars for ten acres of woods was extravagant by local standards in 1979 but
thats what I had to pay to keep a corn farmer from bulldozing it away. I
presume that if I had invested that money in the stock market, it would have
doubled or tripled by now, but then again, after the recession in the 1980s
when the market took a beating, and again in 2002, and now in 2008, maybe
not.
A few years after we bought the ten acres, a timber buyer offered
us $20,000 if we would let him clear-cut it, which of course I had no
intention of doing. But I did sell five white oaks as veneer for $5000. A few
years after that I sold another $2000 worth of logs. About 1995, my son, who
was getting in the home construction business, hired a sawyer with a bandsaw
mill to saw about 10,000 board feet of lumber which my son and I have used in
various ways. The slab wood waste made several loads of firewood too. The
sawyer charged thirty cents a board foot as I recall. We figured the wood was
worth, above that cost, about a dollar a board foot, possibly twice that. If
you have purchased wood from a lumberyard lately you know that you can carry
$150 worth out to your truck in one trip. My son used some of the red oak as
trim throughout his new home. It is breathtakingly beautiful. What is that
worth? I sold another $2000 worth of trees in 2007.
Every year I
harvest about four cords of fuel wood from the 14 acres of both woodlots. My
son and other family members have been harvesting firewood from the ten acres
too. Experience teaches us that an acre of mature woodland will produce
indefinitely at least a cord of wood annually just in deadfalls, blowdowns,
and thinnings, without lessening the over all yearly production of wood, and
in fact increasing it. One mature tree containing two sawlogs to sell or make
lumber from, also has enough branches to make a cord of wood.
The price
of cord wood, needless to say, is going up as fast as the price of oil. Ive
always figured that a cord of oak replaced about $100 worth of other fuel but
now the replacement value is higher. In general the wood Ive used to keep the
house warm over the last 25 years saved us an average of $400 a year even
after deducting the cost of five chainsaws I have worn out in the process. My
son figures that today his wood replaces about $300 of other fuel per winter
month. He heats almost entirely with wood. I let our woodstove go out at night
in favor of backup electric heat unless the weather is very
cold.
Actually I rarely count wood by the cord but by the amount I need
to heat the house for a day. Experience has shown me that I can cut from the
log and split a days supply of heat in about an hour if the wood is
straight-grained. Could do better when I was young. So to work up enough wood
to last a hundred winter days, which is what I do, takes about a hundred
hours. Since I like to work in the woods, and since I am not paying money out
of pocket to someone else, I consider that labor as part of the
profit.
Obviously the original $20,000 was an excellent investment. The
woodlot will go on producing fuel and lumber and satisfaction forever with
proper management. Even discounting that, the land is still there, going up in
value whether it has trees on it or not. And if I were to sell the land, it is
worth far more for homesites if it has mature trees on it than if it were bare
land.
When I was a boy, farmers followed a code of ethics that
proscribed a ten acre woodlot be kept for every hundred acres of farm land.
That of course was forgotten when coal, fuel oil, bulldozers and subsidized
corn became easily available. Would we not have much better homeland security
today if that practice had remained as part of our cultural
heritage?
~~
Gene and Carol
Logsdon have a small-scale experimental farm in Wyandot County,
Ohio.
Current Books:All Flesh Is Grass:
Pleasures & Promises of Pasture Farming
The Lords of Folly
(novel)
The Mother of All Arts: Agrarianism and the Creative Impulse
(Culture of the Land)