timber sale process and current market conditions
TRANSCRIPT
Timber Sale Process and
Current Timber Markets
Bob PetrzelkaGretchen Cline
“It needs to be fair for both the Timber Seller
and the Timber Buyer for the
sale process to be effective…”
Why landowners decide to sell trees? “We’ve never sold any trees and wonder if we
should be doing something out there…” “It looks like some of my oaks are dying…” “The windstorm that came through in July
broke a lot of the tops out of my big trees…” “Things were tight this last year and we could
use the cash…” “A man stopped by and offered to buy some
trees and I just don’t know what to do?”
Reasons to Sell TreesForest Management
Biologically Mature
Economically Mature
Income
There is a BIGdifference between when a tree can be sold and when it should be sold.
Where to Begin?
Meet with a professional forester to determine if a harvest is recommended
Gifford Pinchot1st Professional Forester in
the U.S.
Skinned by fallen branch
Dead/dying
Poor quality
Frost crack
Multiple-stemmed
Wind damage
Cherry tree to harvest
Cherry tree to keep
Bid Notice
Aerial Photo of Timber Sale
Sale Results
Detailed Timber Sale
Contract
What to Expect?
Selective Harvest
White Oak Tree
Tops and side branches are cut off and left in the woods
De-limbing Tree
Skidding tree out of woods
Skid Trails or Logging Roads
Logs displayed out in field
Logs stacked in piles
Timber buyer entering in data
Loading trees for transport
Cottonwood log protecting Walnut
Not acceptable to have tops over fences
Or an excessive amount of damage to residual stand
It should NOT look like a tornado went through your woods
Lump Sum vs. Grade & Yield
Lump Sum Sale. Trees marked and tallied by a forester are sold outright, with payment in advance. Potential buyers know which trees they are bidding on and the estimated volume. Lump sum sale is the best method for most forest owners.
Grade & Yield. Payment is based on the quality and quantity of the logs removed after the harvest is complete.
The World Economy has a Direct Effect on Timber Prices
It is widely accepted by industry that nearly 50% of the grade lumber produced in the U.S.is exported, with a much higher percentage of higher grade lumber being exported, and that these exports have been a driving force behind the increase in lumber prices since late 2012
Source: The International Hardwood Lumber Market, Dec. 1, 2014Author; USDA Economist -Bill Luppold
“White Oak prices were more the result of lower supply than higher demand..” March 4, 2016 Source: Hardwood Market Report
“The cabinet, moulding/millwork, and wood component industries are among the busiest domestic markets, with demand weakest from the wood furniture and pallet sectors. .” March 4, 2016 Source: Hardwood Market Report
”Exporters’ comments are mixed, as European business is sluggish, and China’s post New Year outlook is not yet clear.March 4, 2016 Source: Hardwood Market Report
Recent Timber Industry Headlines
Source: Penn State Extension
Source: Penn State Extension
Used with permission from Mark Barford, Executive director of the NHLA
Species $/Bd. Ft.
Black Walnut $1.50 - $3.00
White Oak $0.40 - $0.60
Red Oak $0.25 - $0.40
Black Cherry $0.45 - $0.65
Sugar (hard) Maple $0.35 - $0.55
Silver (soft) Maple $0.25 - $0.45
Ash $0.25 - $0.35
Basswood $0.20 - $0.30
Hickory $0.25 - $0.35
Elm $0.20 - $0.30
Aspen $0.15
Current stumpage prices / board foot.
Recent Comments from Timber Buyers on Prices and Markets
• “The quality of the timber is changing and the trees that we are cutting are much smaller than 20 years ago.”
• “It is becoming very hard to find loggers to cut the jobs, no one wants to do the job anymore”
• “If you’re willing to look for it, there is a market for all species.”
• “In regards to the White Oak market, current demand exceeds production.”
• “Even though the demand for Black Walnut has been exceptional for the past few years there is no sign that it is softening.”
Important Points to Remember
Determine what your individual objectives are for your timber.
Work with a professional forester to mark, scale, and administer the sale.
Be aware of fluctuation in timber market prices
Harvesting your timber should be seen as a beginningnot an end to the management of your woodland.
Questions?