The Timber Company

Blending Forestry and Logging


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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.

 

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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.​


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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?


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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