How to Get Half of What Your Wood is Worth!
According to recent media reports, the markets for Maine’s timber are terrible. That’s not an accurate picture, however.
Although demand and prices for softwood pulpwood, and biomass fuel are down, these products only account for a small portion of the value of standing timber. Of course it’s nice to get high prices for low grade wood, but it is wood suitable for sawing or for making veneer that make up most of a landowner’s bottom line.
It seems appropriate to talk about how to market wood. There’s no big secret in getting top dollar for your timber. You just have to consider all the factors, price, utilization, scale, grade and marketing.
A highest unit price isn’t always best. Think about this – would you rather get $10/each for 5 of something, or $5/each for 20 units? A high offer on products of which there is little volume isn’t worth much. Focus should always be on maximizing the total income, rather than getting the highest price for some items.
It’s important to remember that trees vary in quality, and most produce a number of different products. A logger’s skill in manufacturing these products has great impact on your bottom line. For example, say you have a 20” diameter tree with 24 feet of straight clear stem. It can be cut into a 16 foot log with 8 feet going into lower value product. Or it can be cut into two high value 12 foot logs. The longer log should scale about 170 board feet. The two shorter logs scale about 250 bf, which is almost 50% more high grade volume. Here’s another example: Take a tree which has a crooked lower stem but is straight further up the tree. Cutting the straight sections out for sawlogs takes time and thought but increases the volume of high grade produced. Employing these and other ways of manufacturing trees to produce maximum high grade product will significantly increase income.
Traditionally, in the northeast, the buying mill scales the wood. Mills buying low grade wood generally buy on weight. When you subtract the weight of an empty truck from the weight of the full truck, you know how many pounds or tons were on the truck.
With Sawlogs and veneer logs, the diameter and length are measured and converted to an measure of board feet using a “log scale”. The legal rule used in Maine is the International ¼” rule Volume in defects such as rot, wounds, and sections too crooked to be used are deducted.
Just as before, a logger’s care in manufacturing increases scale. For instance, cutting a log just before it tapers faster than normal increases scale. Somemills are known to give better scale than others. When a logger has good relationships with specific mills, they can get better scale. Another factor is when log inventory is low, often the scale is better. Ideally, none of this would matter but, it does.
Grade (quality) is most often measured in hardwood logs and sometimes in white pine markets.
Larger logs with no defects that will produce high quality of boards or veneer are most valuable. The best log grades are often called prime, select, or grade 1.Typical buyers will have five or six grades The lowest is usually called pallet or utility grade.
Currently, the highest grade veneer logs bring landowners $1,200 to $3,000 per 1,000 board feet, while the lowest grade logs bring about $50 per 1000 board feet. Once again the logger’s skill makes a difference in how many high grade logs are produced.
It doesn’t take long for someone knowledgeable to go to a log yard and find mis-manufactured logs, or see sawlog quality material being sold for pulpwood or firewood. When this happens it is taking money out of a landowner’s pocket. Knowing where to sell specific logs is important. A firewood dealer is just as happy buying sticks that are suitable for sawlogs. The smart ones even pull log quality material out to resell. A papermill doesn’t care that some of the wood it is digesting into pulp could have been made into lumber. High grade logs work just as well in a pallet mill or mill sawing timbers for construction mats.
The key factors are price, utilization, scale, grade and marketing. If you get all of those right it’s easy to maximize the income from your timber.
We sell standing timber for our clients almost every week -- usually several times per week. When you compare that to most landowners, who might sell timber once or twice in their lifetime, it’s easy to see who will be able to negotiate the best prices.
We are constantly checking the market, mill inventories and prices.
We are in contact with wood buyers, other foresters and our loggers on how wood is selling.
We keep detailed records, which help us know which loggers get the most from a woodlot, and which mills are grading or scaling a little better.
We regularly get phone calls or hear of a mill needing - and paying a premium for -a specific type of log. Our clients benefit from that knowledge.
We often call loggers we don’t respect point five (.5) loggers. These are the loggers who pay C grade (70%) prices and manufacture product at a C grade (70%) level or worse. Or 70% x 70% equals 49% or half the value of your timber.
Don’t get half of what your timber is worth.