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Author Topic: Business Model for timber stand improvement??  (Read 503 times)

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Offline wesdor

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Business Model for timber stand improvement??
« on: October 27, 2017, 08:03:50 pm »
Is there any business model that can support the management of forest land in the United States (more specifically here in the mid-west).  Here are two examples.

I was recently in Germany and was impressed with forestry in the north.  It works something like this:  The landowner may have a forest, but a forester manages it.  The forester marks which tress need to be removed which leads to timber stand improvement when needed and the harvesting of high quality trees when appropriate. 

Recently a neighboring farmer had several walnut trees harvested.  I am suspicious that this was a high grading operation which took only the best trees and left lower quality.  I am under the impression that the farmer was well compensated.  This farmer is typical to what I see in our area.  Many forests have been high graded and only low quality trees are left.  Timber stand improvement harvests are rare or unheard of and landowners have timbers that produce far below their potential. 

My wonder is what kind of business model would support the harvest of low quality trees and the establishment, nurturing and harvesting of high quality timber at the appropriate time.  This would likely take decades to see significant results, but in my opinion such a model might produce some very high quality timber down the road.

Thinking this way probably only makes me a crazy old guy, but I wonder if it can be done in a financially profitable manner.

Thanks for any thoughts regarding how this might happen.

Offline mike_belben

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Re: Business Model for timber stand improvement??
« Reply #1 on: October 27, 2017, 10:58:47 pm »
Im basically on the startup end of doing precisely this, now.   Dont expect it to be an easy living.

In the short run it is less profitable than being a logger but still takes almost as much equipment. I see it as a foot in the door to go into full scale logging.  Tsi is mostly hand work and small stems.  A good bobcat is enough to start.  Let the business buy you more equipment as you go.  Then become a good logger who does tsi on every job.

 You can harvest for pulp or firewood if you have markets available for it.  Firewood in florida vs new york are very different rates.

The best bet is call your area forestor and see if the equip program will pay for the tsi service if a management plan calls for it.  That way landowner makes a good long term decision with only a temporary fee out of pocket that gets reimbursed.  Its hard work but my goal is to help convert mediocre timber into prime timber that my kids will log when im gone. 

No one has paid me to do tsi yet.  I quoted two jobs (on the high side for tsi probably, but im not gonna work the same equipment for a lesser rate than if i was using it for construction/clearing etc)  so atleast there was some interest.  All the logging ive done so far was in the context of clearing for ponds or roads.  I run a dozer and skidsteer.   

I highly suggest you plan on a chipper upfront.  Someone paying out of pocket for a forest improvement thats attached to a homesite will likely want it pretty, not slash all over.  If they were forestry enthusiasts theyd do the job themselves.  My biggest issue on highgraded sites is that so many scraggly junk trees need to come down that i just end up swimming in brush.  Its hard to work around.  Would be much nicer to feed into chipper and blow it around.

Offline Ianab

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Re: Business Model for timber stand improvement??
« Reply #2 on: October 27, 2017, 11:20:39 pm »
I definitely think it can, but it needs the landowner to make the conscious decision to both educate themselves and plan ahead, possibly out beyond their own life span. It also means a lower initial return, because some of the $$ earnt from the early timber sales has to be reinvested in Timber Stand Improvement, taking out junk trees for little or no return. 

Also resisting the temptation to harvest everything that's marketable, and leaving your shelter, seed and "next harvest" trees, to be harvested next time through, which might be 20 years down the line.

Now if it's planned properly some of this can be done as part of the harvest, especially if you have local markets for pulp or firewood. You might end up basically "Giving away" the junk trees, but if enough $$ can be recovered to pay the logger and trucker then the return to the landowner is the stand improvement. Because the logger is already on site, has the skid trails and landing set up, it may be economic to recover the low grade wood, where as moving machinery in to do a TSI only job wouldn't work out $ wise.

I'd suggest what's missing is that most landowners aren't actually "tree farmers". They don't know even the basics of Forestry as a science, and may not wish to employ a consulting forester, who may initially actually cost them more money. If they looked at their forest the same way as they looked at their cattle herd or corn field they would see that you don't sell your best breeding stock, and you have to fertilise and till your corn field. Apply the same sort of thinking to a forest and you are on the way to managing it better. But not knowing this, someone comes along and offers them $500 each for their best trees, they think it's a good deal. It's a forest, more trees will grow right? Well eventually they will, but with good management there will be more / better / sooner. 

Now US style mixed forestry basically isn't practised in NZ. It's 99.9% plantation, which is a completely different operation. More like growing corn, just takes a few more years. After the harvest it's "reset" and plant again. Native forests are heavily protected, and lots of paperwork hoops to jump through there, and plan on maybe a 400 year rotation for the more desirable trees. They grow BIG, but this takes a long time. We have a local guy that's "tree farming" in the hills out East of us. Around 1000 acres, and he's harvesting 5 or 6 trees a YEAR. Don't worry they are both big and valuable, so he does OK $ wise, even after paying for the sawn wood to be helicoptered out. But most people aren't that dedicated.
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Offline WDH

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Re: Business Model for timber stand improvement??
« Reply #3 on: October 28, 2017, 07:38:38 am »
Unfortunately, I do not believe that business model will work because the economics do not support it.  Most landowners will not pay to have trees cut and removed from a forest.
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Offline mike_belben

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Re: Business Model for timber stand improvement??
« Reply #4 on: October 28, 2017, 09:49:42 am »
Not out of pocket, no. 

The forestry grants will however reimburse all costs.  Management plan, tsi, invasive control etc.  So your looking for a landowner with the funds to float the job out of pocket for a year.   

I think a tracked skid steer is the right tool to put in initial trails, and take bucked firewood out on a trailer.  But its a laborers job.  As soon as the guy gets a fecon, he HAS to go out and make fecon money to pay for that attachment.  And now youre priced above what the tsi market will bear.  Plus, a fecon makes parks, not selective sappling stands. 

The work needs to be done cheaply, mostly by hand.  But the local firewood price has to be pretty high to offset the cost and kinda subsidize some of the landowners expense. 

Where firewood is cheap and labor is high it cant work without a full govt subsidy.  The landowner interest just isnt there.  Good forestry ignorance is standard with the general population i have encountered.   

Niches are always possible, butnits a market that will be developed slowly over time.  Ive hung the shingle and the phone hasnt rung much.  Lots of chats and good talks that may amount to something over the years, but dont quit your dayjob.  The market needs to be educated, and be in good financial health to begin with.  Thats getting rarer in itself.  Most people selling timber where i live need the money now


Offline mike_belben

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Re: Business Model for timber stand improvement??
« Reply #5 on: October 28, 2017, 10:00:00 am »
One more thought.  I made a lot of calls.  The commercial timber stand owners had absolutely no interest flat out.  We get paid when we let someone cut a tree.  That is their psychological mantra.


Joe homeowners mantra is a tree needs to come down, i better hire a pro since insurance wont cover me taking out the powerline.   The psychological barrier to paying for tree removal has been breached with a homeowner.

 So what you need to sell TSI is a hybrid client.  A homeowner mentality with some acreage out back.   Much of appalachian residential lots today are former timber tracts high graded a few times then sold as subdivided home sites.   The new owner will soon have an ugly woods full of crooked, stunted, vastly overcrowded, dying trees with ivy and/or kudzu to the sky like i did.   It can only be corrected by labor. 


That is your target market for tsi.  If they like looking at a pretty woods from the porch, going for nature walks or bringing in deer, you have a chance of selling corrective forestry.  But i do find dozing in ponds to be the quickest ice breaker.  They want a pond, and in the process you start fixing the edge of the woods to dress up the pond.  They like it and then want you fix a little more.

Offline TKehl

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Re: Business Model for timber stand improvement??
« Reply #6 on: October 29, 2017, 12:11:35 pm »
I've put a fair amount of thought into this over the last couple years. 

I think hack and squirt could be reasonably profitable.  However, most landowners would not tolerate the look of a bunch of dead trees and I'm not overly fond of chemicals. 

The downside of relying on firewood in my area is much of the cull wood is Elm, Hackberry, and Locust.  Most people here won't buy firewood unless it's Oak or Hickory.  Some enlightened people will buy Locust, but no one will buy Elm.

I'm leery of any business model that requires subsidies.  They can be changed at any moment.

Like Mike, I'm developing a hybrid plan.  TSI as one component of getting leases to graze goats.  There are quite a few properties within driving distance of the house that have overgrown pastures and run down fences.  They may currently be grazing cattle.  The plan is to offer new fence, pasture clearing, dirtwork, and/or TSI in return for a 10 year lease for goats.  They will still be able to run their cattle as well.  Thinned trees offer forage for the goats from the leaves.  Trunks large enough for firewood are cut about 6' long and stacked to be picked up later with skid steer.  I think it was Joel Salatin that said, "If you can make the land look better, you can access all the land you want."

We've trialed this on 12 acres at our place with good success.  Expanding to 150 acres as our herd grows and assuming no hiccups onto leased land.  Should also be good marketing for sawmill and forestry services as well as selling goats.
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Offline pine

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Re: Business Model for timber stand improvement??
« Reply #7 on: October 29, 2017, 01:35:37 pm »
I live in a different part of the country than what seems to be the majority of folks on this site and maybe things are different in my area.

There are differences depending upon where you are located.  The EQIP cost-share grants do help but they do not pay all the costs.  There are also other cost-share grants depending upon where you are located and some are not that easy to find.  As was stated above, most folks will not fund the total cost of TSI unless they are a true forestry long-term thinkers.

I suppose that I would classify myself as one of the later.  I got started with EQIP many, many years back and did most all of the work myself.  I did have a PCT done by a semi-local, very reputable, company (they work a 500 mile radius).  When I went back to them for some additional work they were so booked up, so far into the future, I ended up getting some large equipment to do the work myself. 

One of the local foresters suggest that I start my own company doing TSI work as there were not that many qualified folks that had the knowledge and the equipment to do some of the work that needs to be done. That is why there are the long wait times to get work done as I found out years ago. 

Being fully employed, by my current employer, my concern was that I would not have the time to fully jump into the water and I was told by that same forester, just start the company and work on projects where you can and when you are forced to retire from the "normal job" then you will have the foot in the door and can go as full time as you want to.

I will say that the work will decrease if and when the cost-share grants dry up.
However, right now I have to turn down work as I just don't have the time to do all the work that folks want done. 
The exact situation that I was told existed and that I previously experienced. 

There is a larger need than there are capable qualified folks that can do it. 
There are a lot of folks that say they can do it but they are land clearing companies that know nothing and care nothing about our forest stands.  I hear the word "butchering the forest" a lot from many folks looking for work to be done.

Offline mike_belben

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Re: Business Model for timber stand improvement??
« Reply #8 on: October 29, 2017, 08:07:11 pm »
The forestor who administers my local program said that in his entire career, no one has ever applied for it.  So theres a lack of awareness on cost share over here. 

I cant seem to tap into whatever demand there may be yet.  Parenting little ones and wifes job are fairly big factors there though.