Boundary Lines

Most landowners have a general idea as to where their land boundaries are located. However, there is a big difference in knowing the general location versus knowing the exact location. Probably my greatest challenge and most time consuming thing I do is to flag boundary lines. And guess what, if I’m wrong, you either don’t get all of your timber harvested or, worst case, we end up cutting some of your neighbor’s trees. And if I’m not 100% sure, I’m flagging a safe line so that I don’t cut some of the neighbor’s trees.

As a landowner, it is your responsibility to know where your lines are; this can only be done through a survey. And here is my main advice on surveying–request and pay the extra money for the surveyor to paint the lines. I know of only one or two surveyors who automatically paint their lines. Other surveyors only tie up flagging tape, which will fall off of the trees within 4-5 years. When that flagging tape falls off, you have lost the location of your line. 

Timber Scam

Timber Scam

If the person that you sold your timber to resells it to another buyer, you potentially lost tens of thousands dollars. There are a group of buyers that only resell the timber they buy; they never intend to harvest it themselves–think about it: if your timber is sold for a second time, sometimes on the same day you sold it, you lost a bunch of money. There are ways to tell if the person you are dealing with intends to harvest or resell.

The following list will give you some pointers to address as you negotiate your timber sale.

• Have them include language in the timber deed preventing assignment of the timber deed to another company. Or, have language where you have to give your permission for the timber deed to be assigned (sold) to another company.
• Ask for proof of General Liability and Workers Comp insurance. Many of these “brokers” do not carry the insurance needed to harvest and sell those trees. If they cannot provide proof of insurance, chances are they are going to resell your trees for a huge profit.
• Don’t be in a big rush to sign a deed. Most of these guys will bring a notary public with them so that this transaction can be conducted in the privacy of your home. Closing the timber sale in an attorneys office would be more appropriate.

 

What are “Crop Trees”?

This is one of your best trees that you are counting on being worth something in the future. It is characterized by good form, quality, height, and diameter.

When thinning, you want a good stand of crop trees remaining. If, after a thinning, you have less crop trees remaining than poor trees, you were probably high graded. It is imperative that when you thin, the proper trees are targeted for harvest.

I have seen some tracts lately that are candidates for thinning—stocking levels are good; tree heights are excellent; diameters are big enough. However, in the case of a couple of  particular tracts, there are very few crop trees while there are a lot of trees that are very poor quality trees marked by poor form. Both of these tracts, incidentally, were naturally regenerated—not planted. When you thin a pine stand where there are very few good crop trees, in essence, you will be growing poor quality trees bigger—you will be growing pulpwood trees into bigger pulpwood trees.

When there are not sufficient crop trees, it is better to totally harvest the stand and then reforest with good quality loblolly pine seedlings. There is very little benefit of growing pulpwood trees into bigger pulpwood trees.

Note: When you elect to not reforest by planting good quality seedlings, you are at the mercy of the seed stock of surrounding trees and of any seed that came from your trees in the harvest area. Whatever they are, that is what you are going to get.

Changing of the Tide in Pine Plantation Management: Right or Wrong?

In 2011, I first started to notice the changing tide of young pine plantation management–the unthinkable was beginning to occur–people were opting to clear-cut their young pine plantations versus thinning. In fact, as of 2014, this practice was becoming, if not prolific, a standard practice.

The initial change in management came, I think, because pine pulpwood prices were at historic highs during the winter months of 2011-2012, and winter pricing as continued at a very high pace. Another reason for the change, I think, is from the explosion of in-woods chippers. The draw here is that “we will come in and clean-up your tract, and you can replant it with faster growing pine trees”. A final reason for this change is that some older landowners are opting to take the money now because they don’t know if they will reap the benefits of the thinning down the road. One final thought about the reasons: 2013 and the beginning of 2014 have been very wet. Ground conditions have been terrible for logging, so one consequence of this is that the need for high ground that can withstand logging has been in high demand. So, buyers have been paying a premium for pine plantations on high ground.

Through 2013 and into 2014, this trend has continued, and for the same reasons above. However, pine pulp prices are even higher. I have to admit that I have lost business because of my management style of thinning to grow sawtimber. I have been forced to offer the option of clear-cutting these young plantations because everyone else is.

Is there a scientific way to determine if this is a good practice? There is, and I can show you through scientific and financial analysis if it would make sense to clear-cut and start over or to manage your trees through a series of thinnings. I can help you answer the following questions:

1. What is the price point where I should consider clear-cutting my young plantation?
2. If I thin, how much will I make, and what will my future earnings be?
3. What are my future opportunities with regards to saw-log markets?
4. What if I clear-cut and replant now and repeat the same process in 15 years? Will I be better-off doing this?

I encourage all landowners to take a close look at all of their options, not just clear-cutting your young plantation because as one landowner told me–I was all wrong about thinning. She said, “We will get more money if we clear-cut versus thinning.” Well, she was right, but when you thin, it’s a given that you won’t make as much money then because you are leaving 50%-60% of the trees. But what you are doing is helping the trees to grow into more valuable products besides pulpwood.

When is the best time to sell timber?

1. When it’s ready.
2. When there is a market opportunity.
3. When you need the money.

Why did timber prices reverse course during the spring of 2013.

In the spring, I wrote a post about timber prices softening (this article is still relevant and contains good overall information concerning timber pricing). As we were exiting the winter season in early 2013, mill inventories were excellent for the most part. The procurement managers could see the light at the end of the tunnel. So they started lowering prices. What happened then? It started raining and raining and raining which greatly lowered mill inventories. They were forced into raising prices.​

Why should I thin my trees?

Did you know that the trees in your forest are competing for survival? “This struggle for existence…is so fierce that it reduces the growth and well-being of all the trees in the stand” that, truly, only the strongest survive; the weak have no chance for survival. The weak will die and rot where they fall; when the weak trees die, they create growth openings that allow the stronger trees to get even stronger. Why do the strong keep getting stronger? With the weak tree dead and lying on the ground, that is one less tree taking water, soil nutrients, and sunshine.

Thinning one time is the normal course of action for most landowners. But your trees will continue to compete for resources even after they have been thinned. That’s why, when possible and feasible, I recommend multiple thinnings on the same pine plantation.

This timber management style of multiple thinnings is a planned interval of thinnings, over a period of time, to keep your best trees healthy, vibrant, growing and producing at optimal rates, and increasing in value. You remove surplus trees that are suppressed and otherwise inferior in quality to the others, in order to concentrate the potential plant production on a limited number of trees (limiting growing resources to the best trees).

Final Harvest

Every forest stand gets to a point when it is in need of a final harvest and reforestation. How do you know when a forest stand is ready for a final harvest? It depends—here are a few examples.

• Every forest stand reaches a point of financial maturity—you could harvest then.
• You might have a salvage situation brought on by a natural disaster.
• Or, you may have a personal financial need.
• It may be a planned final harvest based on your timber management plan.

Whatever the case, if it is determined that a final harvest is necessary, you can then time the final harvest to take advantage of market opportunities in order to maximize your profit. We are also capable of doing a final harvest, plus, we assist you in reforestation and cost-share applications if applicable.

The Timber Selling Process

​When timberland owners call, most are not sure of the selling process. They kind of have an idea of what they want to do but are not sure of how to go about it. The below outline gives a general guideline of the process.

What is the first step?
Start to define your goals.
What are your goals? What do you want to do? Are you currently managing your timber?
I need to look at the timberland
Looking for age, health, timber type, acreage, logistics of logging and whether it is feasible to harvest.
Contact landowner with findings and help to further define your goals.
Make a recommendation based on landowner goals
If a thinning…
Present thinning proposal
Prices are based on:
Miles to the mill
Soils (Are your soils suitable for a winter or summer harvest?)
Pay-as-cut on a weekly basis (also known as a per-unit offer)
With each check, you receive:
Every mill ticket from each load hauled
A weekly settlement plainly listing every ticket and the price paid
A cumulative summary that summarizes each week and the total money paid
If a clear-cut.
In most cases, I will need to appraise the timber
Consists of a systematic sampling of the trees
Make a lump-sum or per unit offer
Sign a timber contract
Plan the harvest
Timing of the harvest will depend on:
Ground conditions
Can the timber be harvest in the winter when ground conditions are the wettest?
Or, will the timber have to be harvested during a dry period?

Why are timber markets softening? Plus, read on for a list of variables that affect prices for every tract of timber? Originally posted March 7, 2013

Many landowners are demanding premium pricing for their forest products, and I don’t blame them. We went through several years of lower pricing due to the housing bubble. However, it is important to remember why prices fluctuate and why pricing will differ from tract to tract.

The primary reason prices are softening right now is that we are on the verge of entering spring and mill inventories are in good shape. As I have mentioned on other posts, if you have timber on the kind of ground that can be logged in any condition, you should expect premium-wintertime prices. But, right now, mill inventories are good, and the procurement managers for the mills are able to see their way into drier months without many challenges. Every mill is starting to lower their prices in anticipation of spring and summer. So, if you are needing to sell your timber and it is located on good ground, you should demand good wintertime pricing–harvesting would have to occur in the winter of 2013/2014 (many mills will give buyers wintertime pricing during the spring and summer months but restrict delivery of that wood during the months of December-March). If you have marginal ground, now is a good time to sell.This list contains some of the Variables that could affect the price that you receive for your timber:
Time of year
Mill inventory
Acreage
Soil type
Product spread
Volume of those products
Miles to the mill
Diesel Fuel cost
Freight Rates (Directly tied to 7 & 8 above)
Logging Rates (Directly tied to 8 above)
Quality of your wood products
Type of harvesting