One of our passions has always been 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, reoccurring 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.
It is only logical to think that the best time to sell timber is when the timber market is red hot; when supply is low, demand is high, and prices for standing timber (stumpage) continue to climb to keep up with the demand. It is easy to see why some landowners prefer to hold-off on selling their timber asset when timber markets are depressed. But obviously, timber markets fluctuate like all markets do, and there could be good silvicultural reasons to consider selling timber even if the markets aren’t at their best. And, just because the demand for certain species (currently cherry and red oak) may be depressed, demand for other species (currently the maple markets) have remained robust for quite some time.
So, despite the current “mixed” market demand we are seeing now for hardwood timber, landowners are still capitalizing on their sales through the bidding process, which continues to produce excellent results for both our large institutional landowners as well as our small private forest landowners. Here are a few recent bid opening results (redacted for privacy) to illustrate the results we are seeing.
A recent timber sale (“Timber Sale A”) in southwestern NY shows that even a relatively modest offering during the time of what some are considering a “down” market had an excellent outcome for the landowner. FORECON cruised and marked a wood lot that contained approximately 108,000 board feet (Doyle Log Rule), with a mixture of white ash, hard maple, soft maple, red oak and black cherry. The ash averaged about 194 board feet/tree, the hard maple about 167 bf/tree, the soft maple about 217 bf/tree, the red oak about 220 bf/tree, and the black cherry about 157 bf/tree. 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 six different bidders responding. The high bid was 30% higher than the low bid, with 3 bids below the average and 3 above. It was estimated that the white ash brought over $460/MBF (Doyle); hard maple came in at about $638/Mbf; soft maple at about $348/Mbf; red oak about $640/Mbf; and black cherry about $812/Mbf.
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, a small offering which only contained about 80,000 board feet (Doyle Log Rule) and had a mixture of hard maple (250 bf/tree), yellow poplar (465 bf/tree), basswood (230 bf/tree), and hickory (260 bf/tree).
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 3 bidders participate, and the high bid was 61% higher than the lowest bid, with 2 bids above the average, and 1 bid below. It was estimated that the hard maple brought an incredible $1,132/Mbf (Doyle); yellow poplar about $301/MBF; basswood about $225/Mbf; and hickory about $265/Mbf.
Another sale of note (“Timber Sale C”) in northwestern PA shows terrific demand as well for quality hardwoods, also on a relatively-small acreage. FORECON also cruised and marked this timber sale, a offering which contained about 146,000 board feet (Doyle Log Rule) and had a mixture of red oak (480 bf/tree), white oak (250 bf/tree), and black cherry (325 bf/tree).
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 eleven bidders participate, and the high bid was 97% higher than the lowest bid, with 5 bids above the average, and 6 bids below. It was estimated that the red oak brought $710/Mbf (Doyle); white oak about $820/MBF; and black cherry about $1,093/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 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.