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NYS - Current Pulse of the Timber Market?

Started by Abeman, December 14, 2017, 06:14:23 AM

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Abeman

Landowner here looking for anyone with current knowledge of the timber market to weigh in. Is now a good time to sell? When I go to seek pricing, are proposal by board foot, by tree, or lump sum?

I know I have some oaks and black walnut, what's the current value per linear foot for these?

nativewolf

Hi, that's a complex question but welcome to FF. 

First, you can look at the Penn State university report that won't be perfect but is directionally ok.
https://extension.psu.edu/forests-and-woodlots/forestry-business-and-economics/timber-market-report

Things to know, timber is bought and sold, ok Hardwood timber, using criteria such that are generally known as "grade".  Clear large diameter logs bring the most money.  The volume used in our industry is a board ft, 12" x 12" 1" thick.  The estimation tools favor larger logs and undervalue small diameter logs, it is what it is.  A log with  higher grade can be worth 2-3 times as much as the same size log but lower grade (due to all sorts of flaws that a log buyer sees).

Prices for Walnut are as high as they have ever been I think.  White oak prices are also at all time highs,  Black Cherry is pretty weak, Red Oak pricing is quite variable across the US with RO pricing in Virginia not as high as that in the NE. 

Perhaps you should call your local forestry extension agent to get some thoughts on selling timber.  The are many implications from Tax to replanting that you'll want to consider before harvest.  If there is a significant amount of timber, say over a dozen acres I suggest hiring a consulting forester, that's often the best way to increase the profit (they can get multiple competing bids) and they help advise on the other issues as well. 
Liking Walnut

dgdrls


mike_belben

Agree with native wolf.  Stock markets are high, interest rates are low and shipping is very competitive so distant demand is driving your local prices up higher than domestic demand alone can sustain.  That can all collapse pretty quickly. 


Keep in mind there is a sale on stumpage and a sale on shares.  In stumpage your standing trees are paid for upfront.  Naturally a percentage of them will have internal defects that lower their value or will be damaged in felling etc.  The landowner who takes pay on stumpage passes all this risk of tree value loss on to the buyer so naturally the bidder will want to buy a little lower to compensate for it.  If i am buying say 5 standing "veneer" trees.. And only 3 make veneer.. Well im gonna lose my shirt on those so i must try to negotiate a lower purchase price to cover it. 

It isnt uncommon for a stumpage contract to specify up to 2 years to harvest.  And for harvesting not to occur until the later end of the contract.  The buyer is letting the trees grow a little on your land, and if youve received a really generous payment i think thats pretty fair considering he shoulders all the risk and labor.  logging is hard, growing trees is pretty easyin comparison.  Only my opinion.


In shares the negotiation is on what percentage goes to the logger vs the landowner.  This means the trees are felled, hauled to mill and a check is cut to each party.  The risk of internally defective trees going down in value from original appraisal is now shared between both parties.  Me personally, i think i can bring a landowner more money on shares than on stumpage because i dont have to buy them up front.  The more logs ya haul the more money flows.
Each tree that drops a grade or two because of shake or ants is only a half loss shared by each. 

The risk of a shady outfit stiffing the landowner is higher so thats definitely something to keep in mind.   You want two checks cut by the mill IMO, not all to your or all to them.  There are tax implications, you dont want to be paying all of the tax nor do you want all of the money going into their account and promising theyll cut you a check. 


Tax wise, a forestors appraisal is pretty critical.  How many acres are you considering cutting?
Praise The Lord

coxy

Quote from: mike_belben on December 14, 2017, 10:42:43 AM
  If i am buying say 5 standing "veneer" trees.. And only 3 make veneer..
you guys need to show/tell me how you can tell a veneer tree still standing I have never been able to figure that one out   I'm always willing to learn something new  :)

g_man

As a landowner selling stumpage or logs by share you might be interested in knowing what the market pricing is in your area for logs of various species by grade. The link below is a current spec/price list from Castleton VT, between Rutland and Lake George. If you get to understand the info on the spec sheet you will be better prepared to communicate with and understand what a forester or logger is saying about the sale. It also gives you some insight on the financial end of why they cut or don't cut what they do. Reaching a compromise between what is good financially and what is good for your woodlot takes a landowner and forester/logger who can communicate. As you will see the spec sheet is complicated for anyone w/o any prior knowledge of logs and grade.

Some landowners don't want to deal with any of that and let the logger/forester make all the decisions for them.

http://northeasttimberexchange.com/wp-content/uploads/2017/12/NTE-Castleton-VT-December-11-2017-Saw-Log-Prices-and-Specs.pdf

gg

nativewolf

Quote from: coxy on December 14, 2017, 04:42:50 PM
Quote from: mike_belben on December 14, 2017, 10:42:43 AM
  If i am buying say 5 standing "veneer" trees.. And only 3 make veneer..
you guys need to show/tell me how you can tell a veneer tree still standing I have never been able to figure that one out   I'm always willing to learn something new  :)

Man, it is some work.  The bark tells is all I've got...if the bark looks perfect, it may be a veneer log.  As long as it is 16" min at the small end. 
Liking Walnut

BargeMonkey

Quote from: coxy on December 14, 2017, 04:42:50 PM
Quote from: mike_belben on December 14, 2017, 10:42:43 AM
  If i am buying say 5 standing "veneer" trees.. And only 3 make veneer..
you guys need to show/tell me how you can tell a veneer tree still standing I have never been able to figure that one out   I'm always willing to learn something new  :)
Depends how hungry the mill is for wood and how flexible the buyer is, I see some of these prices quoted by guys lately for good wood and I'm not seeing it, this is probably my slowest yr in a long time with only just over 1/4 mil ft to the mill. 😂

All depends on quality and what you've got, certain mills may pay more, BnB which isn't to far from you pays fairly well. It's not the value of the timber now, it's the value when the logger actually gets there, I've seen where a few weeks makes a huge diff. Everyone I know is busy, telling a landowner it's 1-2yrs wait time isn't abnormal.

nativewolf

Barge: question for you.  In these long wait scenarios  do they  pay for the timber in advance?  I know that most of yours is related to some dirt work, view clearing, etc do you ever buy timber that far in advance?
Liking Walnut

coxy

you don't want to go by the bark around here or you we be on the unemployed list real fast  :D :D  I have a few people that has been waiting for me since  October  of 16  99% of my LO get a % I don't worry about other people trying to steal my jobs (all though a few people has tried :D) the LO know my work

mike_belben

Quote from: coxy on December 14, 2017, 04:42:50 PM
Quote from: mike_belben on December 14, 2017, 10:42:43 AM
  If i am buying say 5 standing "veneer" trees.. And only 3 make veneer..
you guys need to show/tell me how you can tell a veneer tree still standing I have never been able to figure that one out   I'm always willing to learn something new  :)

Dont ask me man, it was just a hypothetical illustration.  I dont pay for trees at all, my logging is a consequence of doing dirtwork for people with more trees than money.  Prime WO stave is best ive ever cut.  $1800/mbf. 

Thank god ive never fooled with stumpage cuz the nicest standing staves ive ever looked at were hollow!
Praise The Lord

Corley5

Buddy of mine burned himself on what appeared to be a REALLY nice stand of Northern Michigan sugar maples.  He paid the landowner a lump sum before cutting thinking he had veneer quality trees.  After the first half dozen were on the ground he realized he'd made a big mistake.  All the trees were at least 2/3 heartwood.  Some had just a thin ring of white wood.  Most of the logs went for pallet wood and flooring bolts.  General consensus was the soil conditions and possible pasturing many years prior were to blame.  The soil was red clay based.  There'd been no cattle on the ground for fifty years or more.  He lost his *** on that job.  The nicest, straightest, most perfect looking trees can be low grade  ;) ;D :)   
Burnt Gunpowder is the Smell Of Freedom

Corley5

Sugar maple veneer logs were hot around here a few weeks ago.  A local mill needed a couple hundred thousand feet to fill an overseas order.  Things have backed off now but the market is still worthwhile.  Not as good as it could be but no where near as bad as it could be either :)  I did hear after the little bubble burst that the scale stick was a little short during the rush :-\
Burnt Gunpowder is the Smell Of Freedom

coxy

I hate that short stick or a fat thumb  :D

Skeans1

Just wondering if you guys run off percentages like we do here in the PNW?

Abeman

Quote from: mike_belben on December 14, 2017, 10:42:43 AM
Agree with native wolf.  Stock markets are high, interest rates are low and shipping is very competitive so distant demand is driving your local prices up higher than domestic demand alone can sustain.  That can all collapse pretty quickly. 


Keep in mind there is a sale on stumpage and a sale on shares.  In stumpage your standing trees are paid for upfront.  Naturally a percentage of them will have internal defects that lower their value or will be damaged in felling etc.  The landowner who takes pay on stumpage passes all this risk of tree value loss on to the buyer so naturally the bidder will want to buy a little lower to compensate for it.  If i am buying say 5 standing "veneer" trees.. And only 3 make veneer.. Well im gonna lose my shirt on those so i must try to negotiate a lower purchase price to cover it. 

It isnt uncommon for a stumpage contract to specify up to 2 years to harvest.  And for harvesting not to occur until the later end of the contract.  The buyer is letting the trees grow a little on your land, and if youve received a really generous payment i think thats pretty fair considering he shoulders all the risk and labor.  logging is hard, growing trees is pretty easyin comparison.  Only my opinion.


In shares the negotiation is on what percentage goes to the logger vs the landowner.  This means the trees are felled, hauled to mill and a check is cut to each party.  The risk of internally defective trees going down in value from original appraisal is now shared between both parties.  Me personally, i think i can bring a landowner more money on shares than on stumpage because i dont have to buy them up front.  The more logs ya haul the more money flows.
Each tree that drops a grade or two because of shake or ants is only a half loss shared by each. 

The risk of a shady outfit stiffing the landowner is higher so thats definitely something to keep in mind.   You want two checks cut by the mill IMO, not all to your or all to them.  There are tax implications, you dont want to be paying all of the tax nor do you want all of the money going into their account and promising theyll cut you a check. 


Tax wise, a forestors appraisal is pretty critical.  How many acres are you considering cutting?

Thanks for the excellent post Mike! Very helpful. There are 20 Acres of wooded land, 10 of which are inside wetland boundaries. I'd like to harvest as much of all my woods as possible without causing ripples with the DEC. I like the shares option you layout. I'm meeting with a forestor next Wednesday to discuss plans in more detail.

mike_belben

Praise The Lord

starmac

I can tell you the pulse here is already on life support, and one hand on the plug.
Old LT40HD, old log truck, old MM forklift, and several huskies.

PA_Walnut

What are you guys paying for larger diameter (16") standing cherry and black walnut? I'm trying to get my finger on the right pulse also. Been buying some and curious if I'm in the right arena.
Thx
I own my own small piece of the world on an 8 acre plot on the side of a mountain with walnut, hickory, ash and spruce.
LT40HD Wide 35HP Diesel
Peterson Dedicated Wide Slabber
Kubota M62 Tractor/Backhoe
WoodMizer KD250 Kiln
Northland 800 Kiln

dgdrls

Quote from: PA_Walnut on December 16, 2017, 07:20:38 AM
What are you guys paying for larger diameter (16") standing cherry and black walnut? I'm trying to get my finger on the right pulse also. Been buying some and curious if I'm in the right arena.
Thx

Check here, This is what NaitiveWolf posted above

First, you can look at the Penn State university report that won't be perfect but is directionally ok
https://extension.psu.edu/forests-and-woodlots/forestry-business-and-economics/timber-market-report

nativewolf

Man I tell you if I had Black Cherry in PA I'd be trucking it a few miles to get off the southern border.

We are getting $500-850/mbf for cherry here in northern VA but frankly it is not huge stuff that I'm shipping.  I've been told I can get much higher if they are large export quality logs and fingers crossed I'll have that opportunity closed up tomorrow.  Spent long enough cruising that stand with lots of cherry, I'd sent pictures of a few.

The Walnut is definitely averaging over $2000/mbf, closer to 2,500.  However, we only cut larger walnut.
Liking Walnut

Abeman

I walked the property today with my family and we did some research on our black walnuts. My boys had a blast picking up a bunch of the nuts (can we eat these this late in the harvest...these were all on the ground). To summarize, it looks like we have around 75 to 100 black walnut trees from 10"-14" DBH, and roughly another 20-40 that ranged between 16" up to 24" in diameter.

I don't know how to post pictures, if anyone can point me to a tutorial that would be great; I took a bunch today that I'd like to share.

nativewolf

Lots of tutorials but basically I find it easiest if you add some photos to your gallery and post from there.  Search the forum for better advise. 

RE those walnuts nuts. Great eating but when you pick the meat to eat you want to wear gloves as the brown layer between the green outer shell and the hard inner nut is a strong natural dying agent, brown..who'd have guessed.

So, gloves on, peel, and get to the nuts.  The american walnut is tough, use hammer to open or youtube to find alternatives. Very tasty

Re trees:  the smaller trees are for your old age or the kids.  The larger subset may have some potential for income today.  Know that the diameter that matters for scaling purposes is the diameter at the small end of the log, inside the bark.  For walnut there is a lot of taper and thick bark, so 8' up you may lose 2-6" , a 24" tree can easily become an 18" log for scaling purposes.  If clean bark, no knots, no fenceline wire, etc, you would have about 100bdft at $2-5 per bd ft for the first 8' log. 

You can see that what you are trying to grown are larger diameter walnuts, the larger the diameter and cleaner the higher the price.  That same log in a 17" top would have 84 bdft.  If it drops to a 15" top then the grade changes as well, down to $2-3, and so forth and so on.  If you have any at 20" at the small end and nice logs then you can go all the way up to $6-8 depending upon quality.
Liking Walnut

BargeMonkey

 We don't have this "mysterious BW" up here, I've only ever cut 1 and it was dead. Anyway the GFs family had a tree tip over this fall, I go down to clean it up, it's in the better park of Catskill 😂 this BW had 3-4 decent logs in it, about 18" On the stump, I would have sawed it, her father wanted it blocked up for the firewood, said if you want you can have the other 10-12 out in the back yard 😂

I PM-ed you those #'s, both those guys are good, John is about as good as they come and been in the Northern logger, does all the work over to Hunter and Windham, markets his own logs, both those guys book wood yrs in advance. I'm actually headed down to look at a big job in Monticello for family of a landowner up here.

nativewolf

Quote from: BargeMonkey on December 16, 2017, 09:03:57 PM
We don't have this "mysterious BW" up here, I've only ever cut 1 and it was dead. Anyway the GFs family had a tree tip over this fall, I go down to clean it up, it's in the better park of Catskill 😂 this BW had 3-4 decent logs in it, about 18" On the stump, I would have sawed it, her father wanted it blocked up for the firewood, said if you want you can have the other 10-12 out in the back yard 😂

I PM-ed you those #'s, both those guys are good, John is about as good as they come and been in the Northern logger, does all the work over to Hunter and Windham, markets his own logs, both those guys book wood yrs in advance. I'm actually headed down to look at a big job in Monticello for family of a landowner up here.

Wait wait...which GF?  You really cut it for firewood?  Shoot, I'd have swaped him Firewood split already for that tree.  darn...

Did you take the other 10? 

Liking Walnut

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