Should I Sell My Trees in 2024?Oct 20, 2023
As we approach 2024, many landowners are thinking of selling their timber. However, the decision to harvest and sell your trees is not one to be taken lightly. It requires careful consideration, proper planning, and a good understanding of the factors that determine your stumpage rate.
This article aims to shed light on these aspects, helping you make an informed decision while avoiding potential pitfalls.
What Determines Your Stumpage Rate?
The stumpage rate, which is the price paid to the landowner for standing timber, can vary widely based on several factors. Understanding these determinants is crucial before making any decisions:
Acreage: The size of your timberland plays a significant role in determining the stumpage rate. Larger tracts of timber tend to yield better prices, as they can support more efficient harvesting operation fuel cost wise as the most expensive part of logging is transportation: fuel costs moving between sites.
Accessibility: The ease with which a logging crew can access your timberland impacts the stumpage rate. If your forest is difficult to reach: lack of stream crossings which need to be crossed; long secondary dirt roads slowing turnaround times; roads or bridges unable to support heavy equipment and log trucks; crossing neighboring tracts; and more. These factors may be less attractive to buyers, potentially lowering the price they can afford to pay.
Timber Products: The types of timber products you have on your land, such as pulpwood, sawlogs, or poles, influence the stumpage rate. Different products have different values, with high-quality products like poles commanding premium prices. There are also niche products which can bring in premium prices. In general, the higher quality the tree- bigger and straighter - the higher price it will bring.
Market Availability: The market availability is the number one factor to affect your stumpage rate. The more markets within a 100 mile radius, generally the higher the rates. The further your tract is from a mill, and the less number of competing and mill availabilities will lower the stumpage rate available to you.
Weather Conditions: Weather has a big impact on harvesting operations. Wet weather can greatly increase stumpage rates due to the limited availability of tracts to work on effectively, however these rates are only available to you IF you have the appropriate soil and land type to work in during the rainy seasons. Whereas dry, sunny weather tends to lower stumpage rates because of the greater supply of wood to get and land to work on.
Land Type: The land type you have matters in combination with weather factors. Year-round, dryer land tends to yield higher rates due to their ability to be harvested during the rainy seasons. Bottomland hardwoods and sites prone to standing water generally yield lower rates because of the limited operability year-round. The exceptions are for higher quality timber and niche products, such as cypress.
Location: Your forest's proximity to sawmills, pulp mills, and other wood processing facilities can influence the stumpage rate. A closer location means lower transportation costs, usually increasing your earnings.
Timber Quality: The quality of your timber is crucial. Trees free from defects, disease, and damage are more valuable and fit higher-quality product standards. Even large trees which have significant defects such as forks or cankers will down-graded to pulpwood status. Well-managed forests generally yield healthy trees and usually command better prices.
Regulations: Local and state regulations don’t usually have restrictions on timber harvesting in the US Southeast, however there may be notification processes you need to be aware of before starting operations. Always refer to your consultant forester for any compliance needs you need to know of for your location.
Well, even if you are up to date with these factors, you need to engage with a local consultant so that he can tell you a valuation after thoroughly checking out your site.
Now that you understand the basic factors which can impact your stumpage rate, always remember it is BEST to always conduct your timber sale with a consultant forester who can give advice on the best time to sell your timber and the best approach to take!
How to Find the Right Forester?
Finding the right forester is one of the most important aspects when planning to sell your timber. They can help you navigate the complexities of the timber market and ensure you get a fair deal. Here's how to find the right forester:
Credentials: Depending on your state, it may be required for consultant foresters to be licensed to practice forestry and call themselves a “consultant forester”. There are other resources who can buy your timber, but this is not the same as a consultant representing you. So if your state requires certification, be sure you look for active licenses. Other credentials can be “certified forester” which means they have passed standardized testing nationally from The Society of American Foresters and are committed to annual continuing education. Association of Consulting Foresters also have a membership accreditation specifically FOR consulting foresters. These credentials can indicate their expertise and commitment to ethical forestry practices.
Local Knowledge: A forester with local knowledge will have a better understanding of the market conditions, regulations, and potential buyers in your area. I usually recommend sticking to someone within 2-3 hours max of your stand’s location
Reputation: Ask for references to gauge the reputation of the forester. A good reputation is a strong indicator of their trustworthiness and competence.
Communication: Choose a forester who communicates effectively and is willing to involve you in the decision-making process. They should be able to explain the harvesting process and answer any questions you have. Anyone trying to rush you into an immediate decision, especially after just meeting you, is a red flag.
You can also listen to our podcast on Finding the RIGHT Consultant Forester here!
How to Avoid Getting Taken Advantage of While Selling Trees?
When selling timber, there are potential pitfalls that landowners should be aware of to avoid being taken advantage of:
Multiple Bids: Many times seeking multiple bids from different logging companies or buyers is best. This is usually done in a “sealed bid” method, and can help you determine the average fair market value of your timber. Some cases though negotiated sales will yield the best results where your forester works with one buyer directly. Your forester will provide recommendations on which sale style is best for you based on your timber, location, and goals.
Written Contracts: Always have a written contract that outlines all the terms and conditions of the sale, including payment schedules and environmental considerations. Never let anyone start operations without a written contract.
Trust Your Forester: Rely on your forester's expertise. You are working with them for a reason. They should help you navigate the process, and represent your best interests during the sale and operations.
Selling your trees in 2024 can be a profitable venture if approached with care and knowledge. Timber harvesting should not be viewed solely as the "ugliness" of a forest but as a practice that can yield long-term benefits while maintaining the beauty and health of the ecosystem.
Listen to our podcast - “Red Flags to Know BEFORE Selling Your Timber”.
Find Out the One Thing I Ask ALL My Students When Just Getting Started as A Landowner.
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