iDRY Vacuum Kilns

Sponsors:

Big Can of Worms

Started by PAFaller, March 14, 2009, 08:35:15 PM

Previous topic - Next topic

0 Members and 1 Guest are viewing this topic.

PAFaller

Ok here goes, sorry I have been starting so many threads these days, too many questions and too many days off with the markets slowing. At any rate, I want to know where you other professional guys draw the line in regards to landowner ethics, in regards to work and timber values. For instance, common way to buy timber in PA is on a percentage deal, usually 50/50 in oak and soft maple, but I have seen many loggers work for 20 or 30 and pay the trucker in the higher value hard maple and cherry. However, with the prices so low these days, do you still go in and cut, if you can make your payments on your percentage knowing the landowner is getting screwed? In reality a signed contract saying the job must be done in a certain time on and on those percentages means that the logger can keep working. However, both parties are losing, especially the landowner.Many guys are still doing this, or working on a flat cut and skid rate and using the contract as a binding agent to keep working, even though some of the timber generates zero revenue for the landowner after trucking costs! Not to lie, it irritates me that I know lots of guys moving timber and the landowners are making mere peanuts of what that timber would have been 6 months ago or may be again a year from now. Any thoughts?
It ain't easy...

Bill_G

I think it's a matter of ethics. I would talk to the landowner, it is their wood, you might be able to renegotiate so everyones a bit happy. It's tough for everyone, but it's best to be honest and up front. It will pay off down the road. Like they say be careful what goes around comes around.

SwampDonkey

Not a lot of wood harvesting going on on my road, because it was cut when the price was high. Besides softwood, the hardwoods don't yield a lot of sawlog volumes up here. Hardwood is what I call fringe wood this far north. There are some nice stands, but they have been cut hard on private ground. In the last 25 years the woodlot owner has pretty much stepped aside for the the logging contractors. Rarely is there a contract between owner and his logger unless it is lump sum payment on installments. The owner usually gets 25-30% of mill delivered price if every load is accounted for. The trucker gets at least 25 % and the logger gets the rest to pay his crews and make the machinery payments, fuel, parts and such. Many loggers have their own trucks. Some guys will give the owner 50 % on hardwood logs and veneer, but keep in mind those volumes are small compared to pulp. Many loggers don't bother chasing 12 cords of hardwood logs on a 2200 cord harvest. On the rare occasion I've seen it worth while, on those stands that were managed for logs on good sites and not high graded in the past. It is very rare that a forester is hired to look after a woodlot in these parts.
"No amount of belief makes something a fact." James Randi

1 Thessalonians 5:21

2020 Polaris Ranger 570 to forward firewood, Husqvarna 555 XT Pro, Stihl FS560 clearing saw and continuously thinning my ground, on the side. Grow them trees. (((o)))

Ironwood

That is tough. I am not a logger, but I get the jist of your comments. I would not reccommend ANYONE cut their personal timber in this market. Even in a stronger market there is little to show for the woods being cut. That said I have many friend who are loggers and business and livelihoods are at stake. It is an unfortunate situation. I have not talked to my logger buddies lately to discuss this, I just know times are VERY lean.

Even in a good market my wooded acreage near my house is worth WAY more for enjoyment than for timber. I will over time cull a few nice trees and take out the nasties for firewood, but generally it is a no win for us if we were to cut. We only have a few 7-10 acres or so in woods w/ some nice rough terrain where some old growth were left, we have young kids and walk/ play the property frequently. My neighbor clearcut his 7 acres two years ago and it was a shame, what a tangled mess. He got way more than he should have $6000. Many experience friends looked at it and said $2500-3000 tops. The logger is a part-timer with no family and logs for fun I suppose 'cause he got very little for his time/ effort.  

Good luck out there, Ironwood
There is no scarcity of opportunity to make a living at what you love to do, there is only scarcity of resolve to make it happen.- Wayne Dyer

Kansas

When we started the logging side of things, I offered percentages. It worked well, for a few jobs, then we ran into one where a buyer who was angry that we were competitive bidding selling the logs  went to the landowner and told him a bunch of crap about us. That wound up costing me a fair amount of money out of pocket to make the landowner happy. I feel like our reputation is everything, and will go to whatever lengths we need to go to keep it. After that, outside of a few salvage jobs behind a dozer, we will bid a timber for specific trees for a set amount. I present it this way. These are the trees, this is what we will do, we will pay this much, and you are free to get other bids, accept what we offer, or reject it. I simply tell them this is what it is worth to us. No pressure. Most of the time, we get the timber.

PAFaller

I try not to tell people how to buy or sell timber, and I didnt mean to confuse anyone, I personally am not logging on a percentage basis. I am cutting behind a mechanized crew, doing all the stuff too big for a processor head. I have just been hearing lots of horror stories in my travels to procure thinning projects, including one about a logger that was taking his cut and skid rates off the top. In good times and good prices paying a guy by the load or by the foot to cut and skid isnt so bad, especially if hes competent. However, on this particular job that runs heavy to mediocre oak and red maple, by the time the logger takes his share, trucker takes his share, there isnt much left for the landowner. Logger has a contract outlining it all so its not exactly wrong, but not exactly right either.
It ain't easy...

Phorester


Different in different States, I'm sure, but the way I advise doing it in my area is as follows:  I advise landowners to get a consulting forester to handle the sale for them.  If the sale is too small to interest a consulting forester, I then advise the landowner to:
1. Clearly mark the trees to sell, or if it's a clearcut, to mark the perimeter of the clearcut.  I recommend that the   
    landowner get us or another professional forester to do this for him so the right trees will be left after the cutting, or
    the right areas will be clearcut. The landowner and the buyer both must be looking at the same trees/clearcut
    area to be fair to each.  Take no buyers into his woods until this is  done.  Every potential buyer must be looking at the
    same trees/clearcut area to be fair.
2.  Work up a bid notice with terms & conditions
3.  Work up a written contract now, before he offers his timber for sale.
     I can help him write both of those.
3.  Send the bid notice to every buyer on the list I give him.
4.  Open all bids at the same time.
5.  Choose the successful bidder based not only on price, but reputation, and if the landowner feels comfortable with him.
     This decision I cannot help him with.  I give no advice on who he should sell to after he receives the bids.
6.  Don't just walk away.  The landowner should be onsite the first day the logger moves in, and should check the job
      every few days or so.

I recommend selling it lump sum whenever possible.  Then it's in the buyer's best interest to cut every tree marked or cut every tree in a clearcut because that is how he maximizes his profit over the price he paid for the timber.  And, of course, one purpose of a timber sale is to cut all trees marked, because the landowner wanted them removed to improve his forest.  Or if it's a clearcut, to remove all trees in that area to make way for the new forest.

If it's a pulpwood sale, in my area most of it is bought by weight.  So much per ton or per hundred (pounds).  Nobody can visualize a ton of trees or a hundred pounds of trees of course.  But I really don't think you have to.  If all bids are on that system, then you can still compare the offered prices.

Cutting on shares is risky for the landowner because most of them only sell timber once or twice in their entire lifetime and they don't know timber markets.  So they have a hard time figuring out how the logger is selling the logs, why he sells them the way he does, how to account for the loads sold to different sawmills, etc.  Having said all that, here the split is generally 60-40 for the logger-landowner for poor-average timber.  If it's good quality timber, the logger might go 50-50 or a higher percentage for the landowner.

That's about as fair as it can get both for the buyer and the landowner.  The landowner gets fair market value for his trees, and he is allowing the logger to make a profit.  If the logger makes a bigger profit than normal on a particular job, so what?  The landowner has still received fair market value for his trees if he has solicited bids from every potential buyer. If the logger wants to share his higher profits with the landowner after he makes his profit, that's his decision.  Some do in order to get future jobs with that landowner, or to increase his reputation with future landowners he will be buying from.  I guarentee you that this logger has also lost money on other jobs, and I guareentee you that he did not go back to those landowners and ask for money back.  That would kill his reputation.



SwampDonkey

#6 is where most owners fall short. You would think otherwise, but even the loggers will often tell ya the owner never shows up. They just feel the logger knows what he's doing, so no need to be there. I've done pre-commercial thinning for years and 9 out of 10 owners never show, some even tell me they have never been on their lot for years.
"No amount of belief makes something a fact." James Randi

1 Thessalonians 5:21

2020 Polaris Ranger 570 to forward firewood, Husqvarna 555 XT Pro, Stihl FS560 clearing saw and continuously thinning my ground, on the side. Grow them trees. (((o)))

Cedarman

Phorester, I am total agreement with you way of doing things.  It keeps things on the up and up if the forester and landowner stay aware of the logging job.  If the landowner doesn't care to do his part, then that opens him up to get the shaft. 
I am in the pink when sawing cedar.

Thank You Sponsors!