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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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