Arnzen Forestry Services Tim Arnzen Forestry Consultant
When should I sell my timber?
Tim Arnzen Forestry Consultant Arnzen Forestry
The answer to this question is very simple for some people – when it has grown large enough to be of interest to a logger. Others view timber as “money in the bank” and delay the sale until they have a specific need for the money. These two sale approaches probably account for well over half of the timber sold in Kentucky. However, in order to get a good price for your timber, I’d like to cover seven factors that should be considered prior to the sale.
1. Size vs Maturity – Sometimes the size of a tree is a good indicator of its maturity, but not always. Yellow Poplar and Northern Red Oak are each fast growing species, which with fertile well-drained soil, may reach 24 inches in diameter; and still be healthy and growing well. However, if these species are found on a dry, south or west-facing hillside, their growth will be slow; and maturity will be reached well before they reach18 inches in diameter.
It’s important to understand that each tree species has a unique set of requirements that must be met if it’s to grow well. Soil fertility, slope aspect, and stand density are just a few of the variables affecting tree growth. For these reasons, a diameter limit cut is almost always a poor way to sell timber.
2. Timing the market – The timber market has always had its’ share if “ups and downs”. Except nowadays, the global economy also has an effect on market stability. The peaks and valleys are hard to predict, and often harder to explain. Unless there has been a fire or natural disaster in your woods, it’s best to hold off on a sale until stumpage prices are as high as you think they’ll climb, before the inevitable decline. “Timing the market” also has to do with the species of trees in your woods. A decade ago the stumpage prices for Cherry, Walnut and Sugar Maple were a fraction of what they are today. On the other hand, Hickory, Beech , Red and White Oak, Poplar and Red Maple have not made near the quantum leap in price as Walnut, Cherry, and Sugar Maple. Knowing your predominant species and the current market situation, often makes the difference between having an average sale and a great sale.
3. Winter vs Summer – Due to wet, sloppy conditions often found in winter, many boundaries of timber cannot and should not be harvested until things dry out in the late spring. Tracts of timber that have the type of terrain and accessibility that allows winter and early spring logging, often bring a premium if sold at that time. It’s simply a matter of supply and demand. When wet weather sets in, sawmills get low on logs, and prices go up.
4. Crowded conditions – Many woodlands are overcrowded, and will benefit from a thinning. If this eroding occurs when the trees are small (under 6”-8”) in diameter, a pre-commercial thinning is the answer. This entails cutting down or girdling the less desirable trees. If you have a use for these trees, great; if not just swallow hard and girdle or cut them down. In the long run it will pay huge dividends. Crowded conditions also occur when trees are older and have reached merchantable size. In this case and improvement cut is a good choice. This entails creating more growing space by selling the low value trees. While doing this, it’s usually necessary to also include some “gravy” (good mature high value trees). The skill with which these trees are chosen for this type of harvest, will determine if loggers will be interested in the sale.
5. Natural Disasters and Fire – Major problems such as wind, ice, fire, droughts, or insect and disease outbreaks, often dictate the timing of a timber harvest. Woodlands should be checked periodically to monitor these occurrences. If you have had one of the major problems, it’s a good time to consider a “salvage cut.” However! Be careful, too many people jump the gun and have the whole boundary of timber cut when they notice only a few dead or damaged trees. It’s usually better to accept a certain amount of loss if your timber is ever going to reach the size and maturity necessary for a windfall timber sale.
6. Before selling farm or woodlands – In Kentucky, the average length of ownership for a boundary of timber is roughly seven years. With timberland changing hands so often, many owners are faced with a tough decision: Whether to cut the timber prior to the farm sale, and if so, how hard? I think the answer depends on what type of individuals will be the perspective buyers. If the farm is mostly pasture and crop land, the likely buyer will be a farmer. In this situation, the condition of the woodlands is often not a priority. This is an instance where a heavy cut prior to the farm sale often is not a major concern to the perspective buyer. On the other hand, the greater the percentage of the farm is in timber, the more the condition of the woods becomes a factor in the sale price. It’s very common nowadays for timberlands to be clear cut and then advertised as “prime land for deer and turkey hunting”. Many buyers are becoming more savvy of this marketable approach. Often a little more judicious cutting of the timber, prior to the farm sale, will make the seller more money in the long run.
7. Be ready to strike quick – The timber market often has drastic swings. If you hope to get in on the high side, it’s important to be prepared to sell quickly. There are many things that have to be dealt with prior to a harvest: timber sale location, dealing with attorneys and contracts, having the timber marked and tallied, etc, etc. For these reasons, it’s often a smart decision to hire a consulting forester and have him handle these affairs, and have your timber ready for sale when prices are high.