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How to Pay a Forester

Started by KenB1656, August 23, 2015, 11:07:31 AM

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KenB1656

Do individual foresters typically have a preference how they get paid?

I've hired a forester a couple time for specific jobs (create or update a plan, mark trees) and just paid a flat fee. I read the foresters can get paid different ways, by percent or per day etc.

How a forester gets paid can change incentives in theory but in practice it seems a little crass.  I plan to hire a forester for a harvest. Obviously there will be a discussion about  money. The forester  I"ve been talking to has an excellent reputation but land owner, forester and logger interests are obviously not exactly the same.  Is this more a matter of local custom or individual preference or the specific job?

gspren

  In my area marking and marketing a timber sale is paid a percentage which is negotiable. A big easy sale might get a smaller percentage than a small select cut.
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Texas Ranger

Quote from: gspren on August 23, 2015, 06:27:36 PM
  In my area marking and marketing a timber sale is paid a percentage which is negotiable. A big easy sale might get a smaller percentage than a small select cut.

Pretty much the same here
The Ranger, home of Texas Forestry

WV Mountaineer

Same here as stated above.  Sales are almost always a percentage.  Plans are based on number of plots or a flat rate.

Being a guy that has consulted and, now buys for a sawmill, if you are selling, get a forester in the mix.  They really do protect your interests, your land, and ensure contract obligations are met.  Many will say a consultant is necessary and, I'll say not necessarily.  Just get your objective in mind, meet both private industry foresters and consultants, get their input and what they offer, than go with who you are comfortable with.  God Bless
Trying to live for the Lord, spend all the time I got with family, friends, hunting, fishing, and just enjoying my blessings.

Ron Scott

WV Mountaineer,

Where are you located and working in West Virginia?
~Ron

WV Mountaineer

The Mill I buy for is in Summers County, WV.  Located in Flat Top.  Meador Wood Product INC.  I live in Princeton, WV.  About 25 miles south of the mill in Mercer County.

Sorry for the late response.  God Bless
Trying to live for the Lord, spend all the time I got with family, friends, hunting, fishing, and just enjoying my blessings.

Ron Scott

I lived in Richwood, WV, 1974-78 when I worked on the Monongahela NF.
~Ron

WV Mountaineer

That is cool.  I hunt in that area on the Mon.  It is a great place.  The forest service needs to do some more harvesting to help out the wildlife but, every time they try they are met with opposition in the comment phase of the revision of the management plan.  Elkins office said last year there would be no more cuts.  too costly to fight and not enough man power.  God Bless
Trying to live for the Lord, spend all the time I got with family, friends, hunting, fishing, and just enjoying my blessings.

Peter Smallidge

Most often sales are on a percentage commission.  That creates a conflict of interest.  You are hiring the forester and can decide how to make payment. Some foresters might only want to work on a percentage.  Here is an article about working with foresters (chapter 10) http://www2.dnr.cornell.edu/ext/info/pubs/Stewardshipmanual/tableofcontents.htm
Peter Smallidge
NYS Extension Forester &
Adirondack Woodlot Owner
http://cornellforestconnect.ning.com

John Mc

That was some interesting reading, Peter. Thanks for posting.

BTW, welcome to the Forestry Forum. Or should I say welcome back? I know you've been lurking here over the years.
If the only tool you have is a hammer, you tend to see every problem as a nail.   - Abraham Maslow

Ron Wenrich

I always favored a two tier system.  I had used it for awhile back in the early '80s.  We charged a per Mbf to mark the timber, and 5% to administer the sale.   Our thinking was those with low quality timber received the same management advice as those with high quality timber.  So, why not pay the same price?  Sale administration was pretty standard.  Put sale out for bids, collect money, get contracts signed, supervise the sale.  Most of the labor is done in the marking of the job.  That way we had a better cash flow, and those with higher quality got paid a better price.  It never caught on, and the recession in '82 forced us into other avenues.
Never under estimate the power of stupid people in large groups.

NH-Murph

We had a forester come and verify/flag our bounds prior to a pine harvest. He charged hourly, and quite reasonably, I might add. 

petefrom bearswamp

I did both ways when practicing.
probably 95 percent was on a percent commission.
I considered myself to be an honest and objective forester when working on commission.
Did i do some harvests that i was not proud of?
You bet, but always at the insistence of the landowner after explaining sound management.
I found when meeting with landowners, when they said "its not the money" I almost always was.
Hence some diameter limit cuts that extended the next rotation out many years.
This also went for cull removal which lowered the revenue very slightly.
My jobs reflect this as after i retired as some subsequent foresters who worked on my jobs for harvests  gave me thumbs up on my silviculture as did the NYSDEC foresters  as i was a cooperating consultant in their program.
I was once chastised by a retired public sector forester who said he only worked hourly, but enjoyed a fat state pension also.
I would put my management practices up against any and all.
So much for my rant.
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mesquite buckeye

I'm thinking you are one of the good ones, Pete. :) :) :) ;D
Manage 80 acre tree farm in central Missouri and Mesquite timber and about a gozillion saguaros in Arizona.

Peter Smallidge

I was using my smart phone (an oxymoron ?) last night.  I'd like to expand on my comments. 

I stated in the article I posted that a forester who marks timber on a percentage basis has a conflict of interest.  This statement was initially unsettling to me because I thought it implied a certitude of action that I knew didn't exist.  However, if you look up the definition the meaning is the "potential" for a conflict between the interests of two parties.  The concern is that when a forester marks by %, the forester might be (i.e., has the potential) tempted to mark more higher value trees and fewer cull trees to increase the revenue to the forester (and the owner).  The key consideration here is _potential_ for a conflict.  There are other _potential_ problems with foresters who work on a flat rate, but the consequences would not lead to a degradation of the resource. Over marking the higher value trees and under marking the culls degrades the resource.

Another argument, among many, in support of a flat rate is that owners who by luck or management have good timber and carried the risk for 10, 20 or 40 years, will share in the value of their timber with a % sale in the final weeks of the stand.  When I've asked consulting foresters what they do differently on a % sale, none have ever stated they take any different action than a forester who works on flat rate.  I would be interested to know of differences applied to a % sale versus a flat rate sale.  Ultimately the forester mails a sale prospectus to several potential buyers and solicit bids.

Before some get agitated, I do not state that an owner has to work with a forester on a flat rate.  Rather, I state that an owner should ask a forester on a % sale how they will avoid a conflict of interest. This conversation is essential. The owner should select a competent forester who shares an alignment of values and management philosophy.  Method of payment is a consideration but not a determining factor.
Peter Smallidge
NYS Extension Forester &
Adirondack Woodlot Owner
http://cornellforestconnect.ning.com

Ron Wenrich

I have been both a consulting and procurement forester.  I didn't mark timber any differently for either party.  But, when I was in a stand of lower value timber and marked on percentage, it seemed to me that a flat rate was better for my bottom line.  After all, why should I go out and do the same work for less money in timber that had no management work performed on it and was high graded in the past?   

I guess you could say that marking on the flat rate could be skewed by taking only big trees.  The last sale I marked, I also marked out firewood.  That took awhile, but it is the way I feel timber should be marked.  Letting a bunch of small, overtopped trees of lower specie quality isn't what I call good management. 

I have looked at several consultants bid prospectuses.  By looking at what's marked you can tell a lot about the intentions. 
Never under estimate the power of stupid people in large groups.

Texas Ranger

Yep, cutting the best and leaving the rest is a disservice to the landowner, the business, the future and the reputation of the forester.
The Ranger, home of Texas Forestry

John Mc

I understood what you meant, Peter S. A "potential for a conflict of interest" does not necessarily mean the forester (or logger or any other profession) is necessarily motivated by or acts on the conflict.

There is a potential for (and even an incentive for) abuse on just about any payment system. On %, there is a financial incentive to high grade, on flat rate, there is an incentive to minimize hours and move on to the next job, on an hourly rate, there can be an incentive to take your time and "milk" the job. The fact that the incentive is there does not mean the professional involved is actually motivated by it or works any differently because of it. Most of the professionals with whom I have worked take pride in their work, and also recognize that taking the quick buck is probably not a sustainable business plan in the long run.

Every profession has its bad apples, however, and it pays for a land owner to ask the right questions. If you have an ongoing relationship with your forester, you probably don't need to ask those questions. You already know how he/she works, and either you trust them or you don't. When it comes time to do a commercial harvest on my property, I'm not worried about what the pay system will be. I know my forester. We'll figure out something that works for both of us and go from there.
If the only tool you have is a hammer, you tend to see every problem as a nail.   - Abraham Maslow

Ron Scott

If the forester is a professional certified forester, they have ethics to follow and are judged by their peers. If they practice "bad forestry" regardless as to how they are paid, they will not be in business for very long.
~Ron

Texas Ranger

I have been sitting on my answer long enough, it has been hatched.

Well and often.   

We provide a service, we sell our knowledge and ability.  We are judged by everyone around us, some times fair, sometimes not.  Everything should be addressed and agreed upon before a contract is written, or work begins.  That includes checking the forester out, as I check a new client out.  I want to be reasonably assured I will be paid.  Often it is a matter of choice, do I want to face the hassle with this owner knowing he is shopping for the cheapest price.  My major competitor down here is the forest service, they don't charge,, and my opinion is  you get what  you pay for.
The Ranger, home of Texas Forestry

kwendt

Very interesting topic, gentlemen. As a landowner who is new to the harvest process... I'm understanding that a forester is essential, and that dialog and contract prior to sale or work is a neccessary thing. I ended up hiring a certified forester, who has been good to explain/answer my questions. We are only at the Plan development stage.... But I've been impressed with my forester. (And thank you to Ron, Swamp Donk, Tx Ranger and others here who coached/enlightened/taught me.)

I guess I would simply ask my forester how he would prefer to be paid, and when, how, why, etc. My town and region are in an economically depressed area, so I've found that ppl will charge me more because they think I have more money. Or maybe because they think I'm ignorant. At least at first. Including the forester I hired.

I wonder about potential COI areas (good ol boys networks and such) having to do with subcontracting and hiring out for the harvest. Or say if the forester had a connection to a mill... But couldn't that be a good thing too? Good or bad, how can you tell? We've all heard the axiom that you are not just trusting one person, but all the folks THEY trust/work with.

Perhaps hindsight is the only and best teacher.... But I'm certainly open to advice and learning from you all here on FF.
87 acres abandoned northern Maine farm and forest to reclaim. 20 acres in fields, 55 acre woodlot: maple, spruce, cedar and mixed. Deer, bear, moose, fox, mink, snowshoe and lynx. So far: a 1950 Fergie TO-20, hand tools, and a forge. (And a husband!)

RCBS

So far only one encounter with a forester on a harvest...a good encounter.  I am a fan of the way he conducted the operation.  Good contract with bonding, good harvest plan.  He requested that I walk the woods with him to do initial assessment and get an idea of what type of harvest was wanted and if there were to be any special considerations.  He was unofficially recommended to me by the local soil & water conservancy director whom I had deep respect for (he was killed by a lightning strike while fixing his roof a couple years ago, great loss to the local landowners).

It was decided that he was to be paid on a percentage (10%).  He allowed me to inspect the timber he marked for cutting and had a cruise inventory of how many trees and approximate board footage DBH for me to review prior to marketing the timber. (I actually had him go back and mark some additional trees in an area that I wanted to open up a bit more.  The marketing was done via sealed bid and I believe he "advertised" the sale to around 30 bidders.  There were bids from about 10 potential buyers that came back. 

I feel this is an excellent way to ensure that the forester is not padding his percentage on the sale and was a great way to conduct the sale/harvest.  A Mill ended up with the winning bid and sourced the cutters who answered to the forester.  Bond was held until my releasing upon inspection of the completed job.  Obviously, the forester needs to have a good reputation with the potential buyers for best results.

The lesson I learned from the harvest was that a forester is a GOOD thing.  He managed the harvest while I was at work and called me whenever there was any questions on the job.  I felt his fee was very reasonable.  The timber inventory was great to have in hand before the first saw fired up.  Skid trail locations went where I asked for them to be, and if they needed additional access, I was consulted first.

I went to check out the cutting one day because...well...who doesn't like to watch a skidder working?  I chatted with the cutter and he was remarking about all the "good timber" that the forester left behind.  That's probably the moment when I became sure that I had went the right route in having a forester on the job.  The parcel was cut in 2002 and was intended to be revisited in 15-20 years to get the "stuff left behind".

Kwendt:  I hope you can find a good one!  I feel blessed to have been put in touch with our forester.  There will be more harvesting on another tract in the next few years and much to my dismay, the gentleman who had done our previous has retired.  However, he did take on a "protege" and I will likely contact him first when the time comes. 

Check in your area for any woodlands interest groups or extension workshops.  There will be folks there that are like minded with you and they will have experience to draw on.  A couple of the foresters in my area regularly attend these events to "advertise" to potential clients as well.



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