Costa RicaTimber farming investments (TATF)

[fawtsc]

You can obtain a full report (including price and volume trends) of market activity in the forestry sector at www.itto.com
You can subscribe for free, it is called the IMS report.

If you need a full list of my other sources for market pricing, buyers and sellers, consult my past posts in the other ihub board related to timber.

[dupedbysteve]

Very good representative happy tree owner of TATF writes:

"My wife and I approached the TATF investment with caution as I have devoted my entire 33-year legal career to investigating and litigating fraud cases, including all the classic business opportunity schemes like Ponzis, advance fees, planned bankruptcies, etc. So naturally we were slow to invest. We first traveled to Costa Rica to see the project for ourselves in 1994 and didn’t purchase our first trees until the following year. Since then we have purchased additional trees and regularly travel to Costa Rica and periodically check on them. In the process we have visited all but one of the tree farms and also the Raleo facility in San José.

Any suggestion that TATF and Raleo are anything but legitimate, well-run businesses is ludicrous. Everything we have seen and heard on our journeys, including many conversations with other satisfied tree owners, is exactly as depicted on the TATF website and in its newsletters.

As a former high school exchange student in Costa Rica and a Spanish major in college, I speak the language fluently, which has allowed me to ask questions and privately gauge the reactions of the field workers on the farms we visit. Among the many social benefits of this project, TATF has created jobs for approximately 200 workers who couldn’t otherwise find such gainful employment in the rural areas where they live. Without exception I have found TATF’s field workers to be grateful and enthusiastic supporters of the project. The same goes for the Costa Rican men and women employed by Raleo in San José. All of TATF’s and Raleo’s employees are treated with dignity, honesty and respect. You can see it on their faces even if you don’t speak Spanish. These people are the heart and soul of both projects and without them there would be no TATF or Raleo. Although some tree investors might prefer to apply metrics to the daily contributions of these humble workers, it is impossible to measure their true value. Few organizations can claim a stable workforce of 200 satisfied field workers, not to mention the other hundred or so others employed by Raleo. It has taken time and energy to build two such hardworking and efficient business organizations, especially in a foreign land where the language, laws and culture are so different than ours in the U.S.

For the past ten years my wife and I, in partnership with a small group of rural Costa Rican land owners, have been developing a private biological reserve as a sustainable ecotourism project on the southern Pacific coast of the country, not far from several of TATF’s tree farms. Through them and others, we can independently attest that TATF has earned a reputation as one of Central America’s premier rainforest conservation leaders. TATF, in combination with Raleo, is providing not only Costa Rica but the entire world with a working model that will last and be replicated for decades to come. Again, traditional investment metrics have no practical application to TATF’s incredibly important contribution to the environment and future preservation of our tropical rainforests.

TATF’s tree selections also are an important but little-discussed aspect of the project. Most of the species TATF grows are endangered and there is virtually no available growth or habitat data about them. TATF is gathering and using this invaluable data for the benefit of its tree owners and it will someday be available to others similarly interested in rainforest preservation and sustainable growth projects. The value of TATF’s contribution to our planet’s future—especially to the lives of impoverished inhabitants of the tropical rainforest—is inestimable.

These are but some of the many social and environmental benefits that TATF is creating and they deserve prominent mention on this blog.

TATF is not a sure-fire, short-term financial investment or a get-rich-quick scheme, and it’s never been advertised as such. In fact, quite the opposite is true. As its newsletters attest, TATF has operated in uncharted territory from day one. TATF has undertaken a project that has never before been attempted in quite this fashion, as far as I am aware. I do know that no tree investment project of this type I have come across in my research has been nearly as candid, forthcoming and transparent as TATF. Its tree owner newsletters provide an accurate and complete historical record of the many challenges the project has faced and overcome, and its vision and blueprint for the future. Nothing has been exaggerated, misstated or hidden from view.

So far I haven’t mentioned the founders of TATF and Raleo, Steve and Sherry Brunner. If anyone has assumed great financial risk in these projects, and stand to lose their shirts if they fail, it is they. They alone scoured the Costa Rican countryside to purchase the land on which our trees were planted and are now growing. They alone invested in and established Raleo to create a market for and add value to our trees. All this they did on their own, and from their own pockets. We tree owners share all the benefits of these significant financial investments, and none of the risks. This is one important metric that critics can take into consideration—and have largely ignored. Just try duplicating TATF, beginning with the purchase of vast tracts of real estate, and tying up all that money for 20-plus years while awaiting others to ask you to plant trees there for them.

There is one more important investment metric that cannot be applied to TATF and Raleo: the dedication, honesty and personal integrity of their founders. When 24-inch rains fell from hurricane Caesar in 1996, causing unprecedented flooding that wiped out thousands of planted trees, Steve and Sherry Brunner voluntarily replaced them with their own trees and immediately replanted thousands more for the affected tree owners, thereby sparing them from considerable financial loss. When an unforeseen road was unlawfully cut on property adjoining one of TATF’s farms and produced massive landslides that destroyed a hillside of planted trees, Steve and Sherry again replaced them, voluntarily and without hesitation, at their own expense. None of this was required by TATF’s tree owner contract. Rather, these selfless acts demonstrated Steve and Sherry’s sincere dedication to the project, their lifelong devotion to their tree owners, and their personal integrity. I know of no investment project where the principals have made such generous and unselfish sacrifices for their investors.

To suggest that the Brunners are anything less than absolutely honest is an insult to everyone who personally knows them and to the hundreds of satisfied tree owners who have entrusted their funds to them.

Whatever criticisms or suggestions of my own about TATF and Raleo that I might add to this blog, none would concern the transparency or integrity of either operation. Like other investors, I wish my trees would grow faster and higher, and get to market sooner and that I could receive more and bigger distribution checks, and get them sooner. But what really counts is the long term success of our investment in TATF and whether in the short term the project, in tandem with Raleo, continues to overcome whatever challenges may be encountered.

Only time will tell, but so far TATF’s track record is excellent and most encouraging, and my wife and I remain confident in the value of our tree investments.

--A Satisfied Tree Owner and Ohio Lawyer"<<<
~~~~~~~~~~

I agree. And i want to thank you in advance for becoming an assistant mod here.

[dupedbysteve]

Where else are you Guaranteed this! TATF states in their website these guarantees!
~~~~~~~~~


Our TATF Guarantee:
We are so certain of the quality and professionalism of every step of our selection, planting, care and harvest of your trees, that we guarantee your satisfaction in writing:

1) Our first guarantee is that during the first year after your trees are field-planted in our plantations, we will replant or replace, at no cost or charge to you, any tree that for any reason is not growing properly and of good form.

2) Our second guarantee is that if you visit our plantations any time within two years after your trees are planted and for any reason you are not satisfied with the condition of any of your trees, we will, at our option, replant or replace the trees you are unhappy with or promptly refund a proportionate part of your money.

3) Our third guarantee is that we will delay deducting our care and management fee from the proceeds of the harvest of your trees until you first receive all of your money back. We don't get paid until you do.

[mjb80]

If any thinnings have actually happened, has any real tree owner asked to keep there own lumber as worthless as that probably is?

[dupedbysteve]

An excerpt from the Website of Tropical American Tree Farms
growing precious tropical hardwoods for you!
"At Tropical American Tree Farms, we are planting and sustainably growing many of the finest species of exotic tropical hardwoods in the world - millions of tropical hardwood trees, for harvest, for profit, both for our own account and by contract for thousands of individuals, IRA's, companies, and trusts.
Whether as an investment, for your retirement or for future college costs, transferring wealth to your children or grandchildren, or producing your own tropical hardwoods for your personal use or for your business, we would love to grow these precious tropical trees for you!
The tropical hardwoods we are growing on our tree farms are being crafted into some of the finest furnishings and architectural applications in the world.
At the same time, by producing tropical hardwoods that are not being taken from the natural forest, we are helping to reduce the pressure on the world's declining natural rainforests and providing much needed employment in rural Costa Rica. We are also carefully protecting nearly 7,000 acres of tropical rainforest on our farms.
We would love to have you join us in this unique and rewarding opportunity!

Overview
Since 1991, we have planted more than 2 million trees of more than fifty different tropical hardwood species for more than 4,000 discerning individuals and corporate clients around the world. Our focus is principally on increasingly scarce high value, fast growing tropical hardwood species. Young teak trees for example can reach 70 feet tall in just 10 years.

The tropical hardwoods we are growing are highly prized for their beauty and sought after for the very finest furniture, cabinetry, exquisite inlay work, architectural accents, musical instruments, and other uniquely beautiful furnishings.

We will plant and grow for you, your IRA, trust or foundation, your children or grandchildren, your church or school, or anyone you wish, the same precious species of tropical hardwoods that we are growing for our own account.

You can choose which of our species of precious hardwoods that you would like to own, and we do all the rest. We will select, plant, and care for your trees on our tropical tree farms in Costa Rica for up to 25 years, exactly as we do our own trees, in the same professional manner and with the same experienced personnel.
Our tropical hardwoods are truly beautiful

At each thinning and harvest, you may choose to keep the precious hardwood lumber from your trees for your own use, or sell it yourself. Or if you prefer, we will sell your hardwoods for you and send you the proceeds.

Your trees, and the tropical hardwoods they produce are yours to enjoy!"
~~~~~~~~~~
I just want to say i am so happy my trees are growing on TATF Farms!

[justcfrall]

This is a typical article -clone article- about value of Teak wood,it is complete nonfactual not based on real sales data worldwide speculation especially in Central America. This is twighlight zone material! The sad reality is people are putting there money into plantation teak and not getting there money back,the proof is from many investors reports nearly everyone reporting no distrributions even after bout 19 year old trees.

[dupedbysteve]

From an article:
~~~~
Timber is one of the safest and steadiest growth investments available, protecting an investor in times of inflation and providing returns that have beaten almost every other investment sector over the past 40 years. Teak is one of the best values with the highest yields in the timber sector. It is a small niche segment of the timber industry and is managed by smaller, privately owned companies rather than by big institutional operators.

There are a number of ways to invest in teak with small very reputable timber companies. How you invest and with which company can have a significant effect on your returns. The key question you must ask is: "What assets am I buying with the funds that I invest?"

As you research the returns and opportunities in teak investments, you will find that companies use many different ways to calculate return on investment. As you compare investments and predicted returns, be sure that you apply the same standards to each investment opportunity. There are different ideas concerning what teak will be worth in 25 years, as well as many different predictions of how much teak will be available and what condition it will be in over time. Therefore, the most useful investment comparisons consider what assets you´re getting for your investment dollar rather than what your dollar will be worth at some point in the future. To put it another way, determine how much of your investment is actually going into the company´s products and assets.

(When evaluating a return on a timber investment, it is important to understand what data the company is using and how it is using the data. Such data may include price per unit and growth rate.

Teak is a commercial wood, which means the price per unit is pretty well fixed at different sizes and ages of the stand and at different points of being processed, i.e. price of trees on the stump, price of logs FOB (freight on board), and price of cants, (square sawed logs) or the price of rough cut lumber. The average sale price of mature teak in 2009 is about $500 US dollars per cubic meter for raw logs; rough cut lumber will wholesale at around $1,200 to $1,800 per cubic meter. As the timber is further processed by a company, the fewer middle men are involved and the greater the overall return on investment will be.

Most well managed and well located teak plantations have comparable growth rates. Teak has been cultivated in plantations for over 1,000 years; therefore, proper management techniques and typical growth rates are well documented. Companies that claim to be able to grow trees faster than anyone has ever grown a teak tree over the past 1,000 years are likely to disappoint investors over time. Minimum rotation for teak is 20 to 25 years. Growth rates on average over a plantation run from 10 cubic meters to 20 cubic meters per year with an overall average of 12 to 14 cubic meters per year. After thinning, yields after 25 years of growth in a properly managed plantation will be about 200 to 220 cubic meters per hectare (one hectare is approximately two and one-half acres).

With prices and growth rates roughly comparable for well managed and well located plantations, return on investment (ROI) is based largely on the cost of purchasing and managing the teak plantation. Cost for land, planting, and management for a full 25 year rotation in Panama, for example, runs about $8,000 per hectare ($3,300 per acre). The land costs about $3,000 per hectare, while the cost of planting and management runs about $5,000 to $6,000 per hectare, as teak is very management intensive, especially to produce the highest quality wood. In Ecuador, costs run about $6,000 per hectare because of lower land prices. Coast Rica’s costs are about the same as or a little higher than Panama’s. If the investment costs more than $8,000 to $10,000 per hectare for newly planted trees, the amount over this base cost may be going in other directions and the return on investment will be proportionally less for the investor.

How much does an investment in teak cost? This may sound simple, but there are a number of different ways to invest in teak and a number of different ways to present the numbers.

There are opportunities that allow investors to buy managed parcels of teak by the hectare within a larger plantation. It is then relatively easy to determine how much the investment costs per hectare. These investment opportunities typically sell from $20,000 to $50,000 per hectare, which means the “promoter” is charging $12,000 to $38,000 per hectare over and above the realistic cost of the teak. This is a hefty premium to pay for getting into an investment and will significantly reduce the investors ROI. At $20,000 per hectare, the investor has to wait for an increase in value of more than 100% to be at the breakeven point; at $40,000 per hectare a 400% increase in value is required to break even. On top of this, some companies add management fees after 5 to 10 years, further reducing any potential return on one’s investment. Another disadvantage of investing in small parcels of teak relates to the economies of scale. Selling a few hundred cubic meters of wood individually will net far less than if a company can provide a continuous supply of teak to buyers. In addition, overhead and management costs can erode returns and the investors will never gain the returns possible from setting up a mill and processing the wood; therefore, this method of investment is not ideal.

Some investment proposals will add significant appreciation and inflation factors into their ROI calculations. When comparing investment opportunities, start the comparison without these factors included in the calculations. Base the calculations on todays prices. Appreciation and inflation can then be added back in. If the calculated ROI (without appreciation and inflation) is 12% and if it is projected that teak prices increase at 7% per year over the next 25 years on average, then the inflation adjusted return will be 19%. (Over the last five years, teak prices have been increasing at about 7% per year.) Use $500 per cubic meter for the price of mature raw teak logs today. If you get more than that it's great, and you will get a nice upward surprise.

But this is the reality of teak raw log prices today. Processing the logs into lumber will significantly increase the return.

In summary, timber is one of the safest and highest yield long-term investment classes available, and teak is one of the best timber investments available. An investor’s ROI is greatly affected by the initial cost of the investment and by the investment structure. Evaluating each timber investment opportunity with the same projections will give you a true indication of which is the best investment for you. Extensive research has indicated that using a growth rate of 10 to 12 cubic meters per year is a safe, conservative projection. A Final harvest yield of 200 to 220 cubic meters per hectare after 25 years on average is a good conservative estimate. The price of mature raw logs today is about $500 per cubic meter.

Look for a company with a full disclosure policy, so that you can determine where your funds are going. Make sure your investment is going into timber and not simply investment promotion activities. If more than 10% of the investor's funds are going into marketing, you may want to move on. Ask for the bylaws of the company and become educated about what is actually being offered. If the company cannot provide the information and data you need to evaluate the investment, keep looking. Find a company that is truly committed to providing an investment opportunity structured to provide the most for you, the investor.
~~~~~~~

[dupedbysteve]

Your sources Fawtsc??

[fawtsc]

Costa Rica Teak (farm grown) prices continue at record lows, from $350 to $500 per cubic meter that is for 15 to 25 year old mix.
Sales of board and logs continue at record lows.
India is picking up most of the farm teak. Certified Teak is slightly higher.

Present market prices are at a discrepancy of around 800% from TATF published prices.

All other trees sold by TATF have no present market.

[dupedbysteve]

Therein you must make your own judgements. I suggest you read sbrunner postings on another board. It will take a little while ... Then you will have a clearer idea of why i think other "posters" are misguided in their assessment of TATf. Besides i saw the farms, read letters, know that thinnings don't amount to a hill of beans and that the only basis i have is that the trees exist, they are growing and being cared for now some 20 years almost since steve started this business, and there is no real reason to suppose that a man who has 2.2 million trees of his own is interested in making 3350 enemies for what is peanuts in his holdings.

[gistheman]

You speak of payments that tatf makes, but you have just become an investor. Your have not come to a thinning or harvest as you have only been a tree owner for a few weeks. Why do you insist on countering the many who post of no such returns or contact after several years past thinnings. I would tend to believe those with longer experience.

[gistheman]

Ab, approximately, or actually, how many"loads" have you processed? Also, what constitutes a load?

[belmontx]

Good post. It tells the real story about this company.

[belmontx]

This, as always in your posts, is dead-on accurate and reveals the TATF scheme for what it is.

[belmontx]

Evidence from the many tree owners who have reported on other forum is uniformly contrary to what you and ab say. Verification is always missing from those posts.

[dupedbysteve]

Thinnings are so much different in value, Most of it is only good for fenceposts. You can buy steel fencepost for how much? Not a great deal, and so the price is fixed by the use thinnings compete against in steel fenceposts.
Now final harvest logs are entirely different. We all know that every statistic says that demand is projected to be outstripping supply for teak for the next 25 years at least. As the world recession fades, teak lumber demand will skyrocket!

[justcfrall]

Tree Owner agreement/projections are invalid Look at your agreements and just count how many have been ignorned completely by owner.

I threw that in the garbage a long time ago.Thats why I sold my trees after Steve stopped a refund.Took a loss.

Look at the real situation at hand 1000s of investors who are stuck with small logs onder torn plastic that TATF and steve dont sell or cant sell or both .At the end final harvest the same will likely happen and it wont be worth it for the average joe to fly to CR set up shipping ,freight, customs,brokers,inspectors and find a buyer for a pitifull final yield.

Stay Away from this Scam!!!!!!!!!!!

Honest Brad

[dupedbysteve]

Great to see you here abnrgrrvn, and good post. Would you and bfl be interested in being assistant mod? or we can flip, and i'll be assistant? I added you, but let me know if u r not interested.

[dupedbysteve]

Well that part i am waiting for TATF to put the kabosh to themselves. How surprised everyone will be getting their check, like BFL, love to see a picture when he opens up his TATF mail and sees his big check.

[abnrgrrvn]

From current Notes to Projections:

9. Harvest and processing costs are the direct costs of harvesting your trees, milling your logs into marketable lumber, and drying your lumber.

The harvest and processing costs shown in the tables above are based on our actual harvest and processing costs of $0.37 per board foot, increasing annually at the same annual rate as the projected increase in the price of the teak lumber.

H&P includes only tree harvest, sectioning into logs, milling to a specific thickness, then AIR DRY--in the field. It has no transport, kiln dry, export, fumigation, customs, or any other similar expenses.

11. The care and management fee is our reward for managing the care and maintenance of your trees and the harvest, processing and sale of your hardwoods. Our care and management fee is fixed at 6% of the net harvest proceeds. We will defer receiving our care and management fee until you have first received the return of the cost of your trees.

All this agrees with our experience with the loads we sold & exported.

abn-rgr-rvn

[mjb80]

some parts but not the part that the trees are garbage

no care,no workers, no nothing = garbage trees

It's already been verified by more then one tree owner

[dupedbysteve]

I have to disagree with some of what you said. My agreement said there would be a 6% net cost for management taken out for my harvest. That included the cost of selling, getting the lumber cut, to the ships rail,etc.

[justcfrall]

The sales prices for Costa Rican Plantaion Teak has remained about the same for about a decade or more and is likely to drop from here from the oversupply of Teak plantations in CR and Panama as well as all of central and south america. In CR alone there are more than 20 million hardwoods trees planted .
As of last week the ITTO again published the facts for CR Plantation Teak at 350$-500$ per meter cubed for logs 15-25 years old . My TATF trees that I visited and all others ones surrounding my own on 4 different farms were missing and so badly dwarfed that in the very rare case that TATF were legit ,I doubt seriously if any profit will be had after the 25 year final cut,there simply will not be enough logs/yield resulting to pay for labor,machines,gas,oil,loading,transport,marketing costs,delivery to limon-seaport,insurance,loading,-FREIGHT-ect.TATF investors may be sent a bill after final harvest asking nicely to help pay for processing costs that are due. But I really doubt there ever will be a harvest ----Why? Because TATF is a scam.
Go to FBI.

Brad

[dupedbysteve]

What is the market trend in January on teak from CR? Prices up? Or lumber sales growing?

[dupedbysteve]

No, I say since the trees exist, it is axiomoronic to say the burden of proof is on detractors to prove fraud. It is always the burden of proof on the entity charging fraud to prove it. Where is the fraud?

[dupedbysteve]

Why so many on the board? Off Topic in the MOD handbook:
Posts not about the topic of the board including other stocks or companies.
Posts about or focusing on other Members or groups of people and their reasons for posting on the board (i.e. "XYZDownDaDrain" is just a basher, ignore him", "XYZToDaMoon" is a pumper", "the naysayers are very loud today", "c'mon, where did all the cheerleaders go?"). The post does not have to be addressed to a specific person. If the post is about other Users then it should be removed.
Posts with religious or political statements should be removed as "off topic". These inevitably create an avalanche of replies that are off topic as well.

Posts about MODERATORS and/or DELETIONS are also "off topic".
Issues of this nature need to be discussed with a Site Admin.

Putting "ot" at the beginning of a post does not make it acceptable. It is still off topic and eligible for removal.
~~~~~~~~~~~~
Mods edit out "noise": those are postings that in the case of this board are of no useful info to tree owners ;in the off topic category. These are just the off topic issues. How this is done is that if something is off topic in your message, the whole message gets removed, sorry if 99% is not removable by itself and that one little sentence wipes out everything.

[dupedbysteve]

I believe you already know TATF is owned by Steve Brunner. The forrester was from switzerland, or was european and had gone to a swiss college,.. Probably easier for you to ask Steve to give you his email address to write and ask him questions if you plan on buying any trees..

[belmontx]

I agree with bfl

[belmontx]

Give us the names of the forrester and the land owner so we can talk to them.

[belmontx]

Read post 122. Everything you post is unverifiable.

[dupedbysteve]

Absolutely there is proof that tree owners will reap big rewards when every treeowner sees his own trees growing and dollar bills in the lumber? Everyone who has gone to see their own trees has seen that they have trees that will big in big money at final harvest!

[bfl]

The statement of fact that "all tree owners will reap big rewards" should be challanged because there is no proof that that will ever happen. Hasn't happened yet and there is absolutley no proof that it will happen in the future. The TATF website makes a lot of projections that have not been met. This company does nothing to make anyone believe there will be big rewards coming from TATF for any treeowners. I do not believe anything that Steve told you.

[dupedbysteve]

Verifiable? Do you challenge the fact that tree owner's trees exist? That all tree owners will reap big rewards? What verification are you talking about, over what?

[belmontx]

No response to post 122 asking you for verifiable information about
TATF activity. Not possible?

[dupedbysteve]

I don't need to really, i spoke to the forrest land owner, saw the farms(some) hiked through them, examined them for thinning and proper spacing, talked to the educated, experienced, professional forresters and made my decision that owning trees being cared for by TATF was a wonderful way to make lots of money!

[bogstomper]

Hi all,
Looks like nothing has really changed!!

Has anyone heard if there is any thinning going on on the farms in this dry season?

Not really a sign of a well run company that investors have to resort to a discussion form to get info on their investments, and boy is that info dodgy! (what was all that about tatf selling the farms?)

I have being trying to contact the farms by email, and phone to see what is going on and nothing.

I have repeatedly sent emails requesting that my trees be thinned at MY expense and have had the following responses:
I emailed TATF on the
19th feb 2010
13th April 2010
14th May 2010
1 June 2010
2 July 2010
5th July 2010 got a response saying that there was a TON coming out soon and to get back in touch after I have read it and see what I wanted to do.
I responed on the
30 July 2010 asking to tell me how much it would cost, no response so i emailed again on the
21 Sep 2010
22 dec 2010
21 Jan 2011

That is a lot of silence! with me offering to send funds to them to thin my trees for the good of the remianing trees.

Very difficuly to feel comfortable with this investment.

Anyone got any pre thinning reports this year yet?

Regards,
Paul.

[belmontx]

Note that the moderator did not respond to the request for verifiable information to back up his claims about TATF.

[dupedbysteve]

BFLwrote >>,"In other words, STEVE and SHERRY were knowingly"<<
taking advantage
>."us from the start. You can say that everyone should have read the full contract before signing and you would be correct. Eventhough it sometimes causes pain, stupidity is not a crime. But, someone who writes a contract and knows that it is not enforceable (according to you)yet still presents it to potential investors as legal and binding is a CROOK. Someone who is still doing the same thing is a CROOK. Someone who still posts knowingly false projections on their unaccountable website in an attempt to lure in more unsuspecting investors is a CROOK."<<
~~~~~~~~~~~~~~
No i don't think so. I believe Steve will honour all the contracts.

[fawtsc]

Duped you write "Steve has only to abide by what is written in my spanish written contract."

So you got an special written contract that no other has received!

LOL!!!