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?