Timber News
Contents:

SMFS SERVICES

BOUNDARY LINE MAINTENANCE

NEW FORESTERS

ISSUES AFFECTING FORESTRY

SELLING STUMPAGE?

Referrals from our satisfied clients, associates and the loggers with whom we work help our business succeed and grow. As a token of our appreciation, we will be offering a gift to those who make a referral that results in generating revenue for our company.

You will be sent a list, from which you can select the item you would like to receive. Gifts will be appropriate to the person making a referral.

For instance, we will offer books, periodical subscriptions or a one year membership to an organization on our reading lists to clients referring new business.

For loggers, gifts might be a subscription to Northern Logger Magazine, or a book on good logging practices.

We appreciate your business and your referrals.

 

SMFS Services

Southern Maine Forestry Services, Inc. continues to expand and improve our current methods in order to better serve our clients. Since our last newsletter, we have added several resources: additional personnel; hand-held computers to gather inventory data; and a Global Position System with which to do mapping. We offer the following services to meet our clients diverse needs and goals.

Timber Sale Administration:

We have two primary objectives in administering the sale of our clients' timber. We intend to maximize short and long-term income, and to relieve our clients of the complex tasks involved in a timber sale. We contract with loggers who have solid reputations, negotiate to bring the optimal p rice, and monitor loggers' performance to assure that the work meets our standards. We also handle all of the record-keeping, reporting, administration, and delivery of proceeds.

Forestry Consulting:

A comprehensive plan is essential to effective woodlot management. We conduct a thorough inspection of the property, and present our documented findings to the client to come u p with specific courses of action. When appraisng timber our objectives include determining timber value for a) purchase or sale of property, b) establishing depletion accounts to offset timber income taxes in future sales and c) timber trespass incidents. Other consulting services include timber investment counseling, expert opinions regarding timber trespass, and property reclassification under Maine's Tree Growth Law.

Land Management Services:

Our management of your land includes timber stand improvement, weeding, pruning, thinning and brush control; pre-timber sale lot p reparation including selecting and marking trees, and road and trail layout; plantation management of Christmas trees and landscape stock, from planting and herbicide application to pruning, brush control, and marketing.

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Boundary Line Maintenance

One of the problems that we frequently encounter while working in the field is poorly maintained boundary lines. Poorly marked lines can result in many problems, including timber trespass and increased expenses. Foresters and loggers often spend hours searching for and remarking boundary lines. This time adds to their expenses, reducing the value of your timber. It is much easier and less costly to periodically maintain the lines instead of ignoring them.

Timber trespass is a growing concern as the value of timber rises. The law states that the landowner is responsible for clearly marking boundary lines before selling timber. Therefore, you may be held responsible if your abutter's trees are accidentally cut during your timber harvest. Well-marked lines will prevent others from cutting your trees accidentally, as welll as discouraging unscrupulous individuals from stealing your timber.

Boundary lines are best maintained by cutting the brush and tree limbs alone the line, and then marking the trees along the line with painted blazes.

For more information, obtain the Maine Forest Services fact sheet on boundary lines. We offer boundary line maintenance to our clients. Costs vary depending on the condition of the line, size of the woodlot, and other factors.

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NEW FACES AT SMFS

Over the past two years, we have added two new foresters to assist us in serving your needs.

Erik Grove has an Associates Degree in Forest Technology from the Thompson School, and a Bachelors of Science Degree in Forestry from the University of New Hampshire. He lives in Parsonsfield, and is working with clients in Western Maine and New Hampshire.

Erik's interest in forestry is long standing. As a student, he was active in 4-H, winning 4 annual New Hampshire forestry competition championships and competing at a national level. He also competed with the Woodsman Team throughout college.

Since completing his degrees, Erik has worked as a forest technician for IP Co., the Manchester Water District, and the US Forest Service. He has also worked for other forestry consultants.

Charles (Chip) Love, Jr. also joined our team recently. Chip has an Associate of Applied Science Degree in Forest Technology from Paul Smith's College and a Bachelor of Science degree in Forest Management from the University of Maine.

Chip's experience includes working as a forest technician for International Paper for three summers. In these positions, his responsibilities included data collection and compilation for crop management, layout and installation of progeny trials, collecting field data GPS units, and assisting in herbicide program, stream buffer layout, road layout and operational inspections.

Our goal in adding Erik and Chip to our staff is to meet your needs in a more timely manner. Erik has completed and Chip is undergoing a one-year training program, during which they meet clients and logging contractors, learn our methods, markets, and the area.

If you are in need of forestry work, or have friends and acquaintances who could use our services, Erik, Chip and the rest of our crew would be happy for the opportunity to serve those needs.

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ISSUES AFFECTING FORESTRY

Changes in Forest Practices Act

On Oct. 1, 1999 revisions to the Forest Practices Act went into effect. The size of a clearcut for each category has been decreased. In Category 1, a clearcut is now 5-20 acres; in category 2, it is 21-75 acres, and in category 3 (which used to be Category 2E), the size of a clearcut is 76-250 acres. The definition of a clearcut has changed slightly as well, to read "a timber harvest on a site greater than 5 acres that results in a residual basal area of acceptable growing stock trees >4.5" DBH of less than 30ft squared per acre, unless after harvesting the site has a well-distributed stand of acceptable growing stock 3 ft tall for softwoods and 5 ft. tall for hardwoods."

Overstory removal is clearly defined as "a timber harvest that is not a clearcut, that removes the overstory component of a stand, leaving a stand of advanced regeneration that is stocked with at least 450 trees per acre, well distributed on the harvest site, that meet the acceptable growing stock standards; softwood 3 ft tall hardwood 5 ft tall."

Regeneration standards have also changed. By the 5th year after a harvest, the site must be stocked with at least 450 trees per acre of acceptable growing stock. Each category has revised separation zone standards and harvest plan requirements. More information is available from us or the Maine Forest Service.

Closing of Sappi's Westbrook Pulpmill

The buzz when the Westbrook pulpmill closed was that 300 mill workers would lose their jobs but the rotten egg smell would be gone. With the economy booming, those 300 would easily find jobs and everyone would be better off without the bad smell. Not a word was said about the effects of the mill's closing on the economy of the rural areas surrounding Westbrook.

This mill purchased pulpwood and viomass fuel at a cost that I estimate to be somewhere around $10,000,000 per year. Economists use a "multiplier" to determine something's effect on the economy. In this case, it would measure the effect of loggers and landowners purchasing goods with the money made from selling wood, merchants and their employees doing the same and so on. Based on several conversations, in this case, the multiplier is likely between 10 and 20 for dollars spent by mills to buy wood. That means that the economy of the rural areas of southwestern Maine and southeastern New Hampshire has taken a hit from $100,000,000.00 to $200,000,000.00 per year. That is an economic disaster. It bothers me that only a few of us involved in the forest industry seem to recognize the magnitude of the effect of this mill's closing.

The loss of jobs among loggers, truckers, small wood products firms, equipment dealers, suppliers and others likely exceeds the loss of jobs in the mill by a substantial margin. These are jobs in rural Maine and New Hampshire that make the economy in these areas work. A functioning economy is necessary if these areas are to maintain their rural character that makes them such pleasant places in which to live or visit. Otherwise, they are doomed to become just more bedroom communities from which people travel to urban jobs.

I have no answers as to how to remedy the losses but I do take offense to the barely contained glee with which some urban pundits reported the closing and ask that you join me in mourning the loss. It affects all of us who work in or own forest land right in the wallet. Hardwood pulpwood stumpage in southwestern Maine and sourtheastern New Hampshire are depressed 25% to 50%. This decline has made some forest stands uneconomical for loggers to operate for improvement cuts. markets are in the process of realigning to supply more distant mills but I see little hope for full recovery unless another market develops fsor this low grade material. (RDN)

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Selling Stumpage: Negotiate or Bid?

You own your land for many years. You pay taxes. You take the risk of loss from insects, disease, and fire. You invest in decent growing timber. When it comes time to sell that timber, you should receive the best prices possible. Inviting a bunch of stumpage buyers to bid on the trees you want to sell is not unheard of in this area, but it is also nat as common as in other parts of the country. Most timber marketing experts agree that getting the most for your timber can usually be done by selling through sealed bids.

Most often the following process is utilized: The timber to be sold is marked; a volume estimate of various wood products contained in the trees is made; a prospect us describing the wood and conditions of the sale is prepared and mailed to buyers inviting bids; a showing is h eld, where buyers view the timber and are able to ask questions; sealed bids are received; an opening is held; the contract is awarded to the successful bidder, most often the highest bidder.

Is this a method you should consider? Maybe. On good logging chances, it will most often maximize the prices received for your timber. However, you do give up some control over who will cut your timber. A certain amount of lead time is also required. Buyers need a couple of weeks notice before a shoing, and should be given at least two weeks after the showing to do their own estimates and get bids in.

We sell approximately one third of our clients' stumpage on a formal bid basis. About the same amount is sold in a less formal bid process, showing it to a few selected buyers and negotiating the final prices and conditions of the sale. The remainder is sold by negotiating with a selected buyer.

We have more reputable stumpage buyers on our list than we can keep busy, so the decision is easy for us to sell by bid. I have never been disappointed with the prices received when selling timber by bid. There have been times when I was surprised at the amount received. The following graph shows the relationship of the top five bidders on five recent sales. In these five sales, fourteen buyers were in the top five at least once. We normally receive eight to ten bids, and have as many as twenty at times.

How much more are you likely to get in selling by bid? For these sales, the high bids would yield you 25% more than taking the median bid. Buyer H is the only one to have bid on all of these sales. Going with the high bidders resulted in 14.9% more than if all sales had been sold to Buyer H at his bid prices. Bid sales can bring 15-25% more from competing buyers. Some sources quote prices on bid sales 40-100% higher than prices received for negotiated sales by occasional sellers. We sell quite a lot of lumber for our clients and I'd like to think we can do better through negotiation. However, it is not uncommon for us to get 10-20% more on a bid than we think we would get in a negotiated sale.

It makes sense that inviting many buyers to bid will bring more money. Not all buyers need wood at the same time. Some buyers like to cut certain types of lots, and will pay a premium for those lots. Some lots attract many buyers. These lots may have particularly good lumber, well developed access, favorable terrain, and be easy to operate. They may have soils that can bear the weight of heavy equipment without being damaged during "mud season".

Not all lots are suitable, nor are all landowners goals compatible, with selling timber to the highest bidders. Sales of small volumes aren't going to bring out a lot of buyers. Some sales are so marginal that just getting them cut can be a challenge. Others just don't show well. They may have a heavy understory, or the wood is a long way back from the road, or another negative factor gives a bad impression to buyers. In these instances, we can often negotiate a better price than sale by bid will realize. Some landowners have goals that dictate that loggers with specific equipment or with particular skills do the job.

Selling timber to get the best price and the job the landowner wants is our business. We think we do it particularly well.

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