marketing timber: the basics tamara walkingstick ua division of agriculture cooperative extension...
TRANSCRIPT
Marketing Timber: the BasicsTamara WalkingstickUA Division of Agriculture
Cooperative Extension Service
Is Harvesting Part of Your Plan?
Regenerate a standForest improvementSalvageWildlife HabitatAesthetics: visualsFinal harvest
If you sell timber, do it Smart
Easy to sell: just sell to first person that comes alongProblem: might not get what you
need or be satisfied
Better to market & be competitive
Most landowners unfamiliar w/ marketing timber
Hire a professional forester
First Steps in Marketing
Determine your objectives: What does the sale do your for you?
What Do You Have?Product Market & OptionsCurrent Prices & TrendsHow the Market Works
Trees sold by Volume or Weight
Board FeetTonsCords
stack of wood: 4 ft. X 4 ft. X 8 ft. w/ 128 cubic ft.
Cubic Feet
To determine volume• Diameter at
breast height• Height at 66 ft.
away• Estimate volume• Easy tool to use:
Biltmore Stick
Know What You Have
InventoryInventory
Timber SpeciesTimber Species
Stand DensityStand Density
Sensitive AreasSensitive Areas
Volume by Size & ProductVolume by Size & Product
What to SellWhat to Sell
What to Sell: Wood Products
Wood ProductsPulpwood (4- 9” dbh)
Ties
Chips
Pallet Material
Biomass (?)
Quality Wood Products Face Veneer (> 10”)
Chip-N-Saw
Sawtimber
Poles
Are all Trees Top Dollar?
Price determined by several factorsTree Quality: ie. Is it hollow, damaged, crooked,
diseased, insect infested, etc.Distance to Mill or BuyerCurrent Market PricesSpeciesTree SizeSite Conditions and ConsiderationsProduct Class
Marketing Objectives
Maximum financial return• Revenue from sale• Find buyer w/highest offer
Balance against forest sustainability• Site protection• Regeneration
Sell Competitively
Determine Selling MethodNegotiated SalesSealed Bids Sell at Gate
Method of PaymentLump Sum SalePay-as-cut (by unit)Percentage basis
What’s wrong with “Buyer’s Select” ?
• Cutting all the big & best trees & leaving the smaller & worst trees is high-grading
Devalues the forest Shifts to lower value species Cuts future profits Diminishes habitat
The Harvesting Contract
Logging methods & requirementsLiability issues & insurance requirementsLists & clarifies responsibilities of both It protects both the seller & the buyer
Don’t rely upon a “smile and a handshake”
What’s in a Contract: The Essentials
Language specifying the specific parties to the contract
Spell out the State laws which will apply Spell out how the trees to be cut are identified.
Eg. All trees marked w/red; all trees of specific species, etc.
Guarantee title Specify amount to be harvested
Essentials Continued
Manner, time, and method of payment: Lump-sum or per unit price
Any down payment to be made to the seller upon execution of the contract
Performance bond that will be returned to the buyer upon satisfactory completion of the sale
Essential Contract Components
Language that protects seller (landowner) from buyer’s failure to pay
Time frame w/a definite termination date Language freeing the landowner from responsibility from
any injury, death, or property damage caused by buyer during tenure of agreement
Language freeing seller from Worker’s Comp Statement that the seller may suspend operations if
conditions of the contract are violated Any changes to the contract must be written, dated,
signed, and witnessed as is the original document
Other Important Considerations
Prohibit excessive damage to “leave” trees Statement about unmarked trees being cut Specify any penalties Establish who owns the tops: the seller or the buyer Establish procedures for settling disputes Determine sale boundaries Location of all roads, landings, decks BEFORE
harvesting Establish access rights to seller and buyer
Special Provisions
You can determine stump heights Limit number of trees left “hanging” Timing of road and trail building Requiring ruts be smoothed Any seasonal restrictions: ie. No logging during deer
season Any weapon prohibitions Determine how potential damage to fences, buildings,
crops will be handled
KEY: additional provisions will cost you money
Contract Tips
• Consult an attorney• Put ALL agreements in writing• Try to avoid mistakes in contract• Make contract easy to understand• Make sure each party has a copy of the
contract• Too many restrictions/provisions will not
be acceptable to a buyer• If a buyer’s contract is used, make sure
you understand what’s included: don’t sign just to complete the sale
Conclusions
• Planning helps YOU meet your goals• Professional help is available• Timber contracts are important• Plan for the future by planning to reforest • It’s your land and your choice• Make the most of that choice
What’s the Message?
Stop & ThinkBefore you make any decisions:
Contact a Registered ForesterGet to Know your ForestGet Everything in Writing
Protect your Forest by Protecting yourself
Develop a Long Term Plan
Get Professional Advice
Advantages/Disadvantages to each method—GET HELP
Seek advice from accountant, attorney, professional forester
Let them prepare a contract or sale agreement
Research shows that consulting foresters can make ~ 20% more for the landowner
Resources
Consulting Foresters Arkansas Forestry Commission Arkansas Game & Fish Commission Arkansas Forestry Association Cooperative Extension Service
Arkansas Timber Report Fact Sheets
Arkansas Timber Report:http://www.arnatural.org/News/Timber_Report/default.htm
Questions?