If you read through the previous page on Timber Harvests, you already have some understanding of the complexities involved with forest management. The methods by which timber is sold (and primarily the valuation of timber) are no less confusing to most landowners, but they can be broken down into two primary methods. Consulting foresters most commonly opt to sell timber by the sealed bid process, whereby a lump-sum price is solicited for a specific volume of timber. The steps in this process typically include: identification of sale boundaries, a timber cruise to determine merchantable volume and value, advertising of the sale, receipt of the bids, contract preparation and closing, and monitoring of the ensuing timber harvest. This method works very well for the purpose of maximizing revenue at the time of the sale- but often fails to ensure the success of harvest methods other than clearcutting.
At GreenWoods, we believe that a unit sale is often more appropriate, because it allows for greater flexibility in the harvest design and implementation. Unit sales involve selling timber either on a percentage basis, where the logger receives a set percentage of the delivered value of the logs (in return for the service of cutting and hauling them to the mills), or by paying the logger a flat rate per thousand board feet that they cut and haul. There are times when one (unit sale) option is more advantageous than the other, depending on the quality and value of the timber to be harvested, as well as other conditions that may exist.
When timber is sold on a lump-sum basis, the landowner only receives payment for the trees included in the sale. For a clearcut harvest all trees are removed; however, with any other harvest method certain trees are reserved. What happens to many of these “reserve” trees during the process of harvesting the surrounding timber which was sold? They get damaged, and are left in place because the logger (who may be the purchaser of the timber themselves, or otherwise is contracting for the sawmill who purchased it) is not allowed to cut them- as per the contract specifications. The end result is that many damaged trees are left on site, a negative situation if the purpose of the harvest is to manage for a healthy, quality timber stand. Addtionally, the value of these trees (at least as a forest product) has now been lost, or at least seriously degraded. In short, it pays to know which method of sale is most fitting, and every situation is different.
As for timber valuation, foresters can perform a timber cruise in order to estimate the volume and value of standing timber. A timber cruise is a method of sampling timber in order to arrive at an estimate of total merchantable volume. Timber cruise methods vary greatly, depending on the size of the acreage to be sampled and the variability of the timber. A qualified, experienced forester knows how design a timber cruise to maximize the value of the time he or she will spend on the job. The better the sampling method, the more accurate the volume estimate will be. Timber cruises often entail long, strenuous days in the woods, and the appraisal portion requires knowledge of current market conditions for each species- as well as the ability to assess logging costs associated with any given tract.
A word of caution to any landowner attempting to sell timber themselves- you are dealing with buyers who know what they are doing, and you most likely do not! You can successfully market your own timber, with a little homework and some good advice, but do consider the value of a professional forester. At the very least, have an experienced forester conduct a timber cruise and appraisal for you. You can use this to solicit and compare bids, so that you know you are being treated fairly by the buyers (you will want to show them the volumes, but keep the appraisal figure to yourself). The cost of a timber cruise depends primarily on the amount of acreage to be sampled- but if you pay $500 or even $1,000 for this service it may net you many times more. Also remember that all timber cruises are not the same, so know what you are receiving for the price. You wouldn’t sell your house, car, or boat without knowing their value, so why do otherwise with your timber?