A while ago, we mentioned that one of our passions is to see our clients benefit from the hard work and patience they’ve put in to managing their woodlots and forests. Though certainly not the sole purpose for owning a woodlot, there is a sense of satisfaction when a landowner sells some of his/her timber for a good price. We have always held fast with the notion that landowners benefit mostly when selling their timber through the bidding process.
Under a “sustainable management” scenario, the harvesting of timber isn’t the final action a woodlot owner takes, but more of planned, recurring process designed to improve the health and value of the residual woodlot while at the same time receiving a financial return on the investment the landowner has made. The nice thing about having timber as a “financial” asset is that if it’s not converted to dollars by selling to a mill or logger, it continues to grow, usually increasing in volume and quality (and subsequently, value) over time. This gives a landowner flexibility in timing a harvest for an income event.
Up until recently, we’ve seen stumpage prices (the price of timber standing in the woods) languish for several reasons; the tariff/trade war with China and the economic slowdown caused by the COVID pandemic. Timber was still being sold for a variety of reasons, and decent prices were still being paid for specific species and grades but, in general, it was a tough time to sell as a landowner.
We’ve certainly seen a resurgence in demand for hardwoods recently, as international markets (China, Vietnam, etc.) and domestic markets have improved. Though in some areas there is still a need for additional workforce, many mills are operating at, or near, full capacity again, and their orders are coming in on a fast pace – of course, this eventually translates to good news for the woodlot/forest landowner who has timber to sell.
Our bidding activity has consequently picked up significantly, and we’d like to share with you a few of the many bid sales we’ve recently administered for our clients. Below are a three recent bid opening results (redacted for privacy) since January 1, 2021 to illustrate the results we are seeing.
Timber Sale A
A recent timber sale (“Timber Sale A”) in southwestern NY shows that even a relatively modest offering of timber volume had an excellent outcome for the landowner. FORECON cruised and marked a wood lot that contained approximately 68,000 board feet (Doyle Log Rule), with a mixture of hard maple (a total of 30,000 bf), red oak (8,000 bf), black cherry (7,000 bf), and white ash (6,500 bf), along with a few other minor species making up the difference. A bid prospectus containing a list of the number of trees and volumes by species, along with terms of the sale and sale maps, was mailed out to prospective bidders.
The results were as follows:
There was good bid participation in this sale, with seven different bidders responding. The high bid was 3 times higher than the low bid, with 3 bids below the average and 4 above. It was estimated that the hard maple came in at about $925/MBF; red oak about $793/MBF; black cherry about $1,058/MBF; and soft maple about $529/MBF (Doyle).
Timber Sale B
Another sale of note (“Timber Sale B”) in central NY shows a decent demand as well for quality hardwoods on a small acreage. FORECON also cruised and marked this timber sale, an offering which contained about 145,000 board feet (Doyle Log Rule) and had a mixture of hard maple (a total of 61,000 bf), white ash (56,000 bf), soft maple (15,000 bf), and hemlock (10,000 bf), along with a few other minor species making up the difference. A bid prospectus containing a list of the number of trees and volumes by species, along with terms of the sale and sale maps, was also mailed out to prospective bidders. The results for this sale were as follows:
This sale had 6 bidders participate, and the high bid was 5.3 times higher than the lowest bid, with 3 bids above the average, and 3 bids below. It was estimated that the hard maple brought an incredible $1,207/MBF (Doyle); white ash about $755/MBF; soft maple about $604/MBF; and hemlock about $75/MBF.
Timber Sale C
Another sale of note (“Timber Sale C”) in northwestern PA shows terrific demand as well for quality hardwoods, also on a small acreage. FORECON also cruised and marked this timber sale, an offering which contained about 73,000 board feet (Doyle Log Rule) and had a mixture of red oak (45,000 bf), black oak (10,000 bf), soft maple (6,000 bf), and white oak (5,000 bf), along with a few other minor species making up the difference. A bid prospectus containing a list of the number of trees and volumes by species, along with terms of the sale and sale maps, was also mailed out to prospective bidders. The results for this sale were as follows:
This sale had eight bidders participate, and the high bid was 44% higher than the lowest bid, with 4 bids above the average, and 4 bids below. It was estimated that the red oak brought about $1,004/MBF (Doyle); black oak $464/MBF; soft maple $695/MBF, and white oak about $1,082/MBF.
These are just several recent timber sale examples. Please keep in mind that results depend on a variety of circumstances; quality of timber, access conditions, and prospectus terms are just some of them. The timber markets in our region remain very active and hot, and we will continue to bring more insight into bidding results in subsequent posts.
If you have timber you may be interested in selling, and want a long-standing professional forestry firm representing your best interests involved in the process, please don’t hesitate to call any of our FORECON offices. Our foresters would be very happy to speak with you about the markets, and more importantly, your goals and objectives for your land.