Thinking About Selling Timber?
Many farms in Franklin County are diverse…that is, they have many types of income producing enterprises such as livestock, crops, and most even have timber. You have to be careful in marketing timber since how you conduct your sale will have major impact on your overall profit.
Here are some suggestions in marketing your timber:
- Seek professional assistance. A recent research study showed that landowners who received professional forestry assistance before harvesting timber averaged 23% more income per acre, received a 64% higher price per board foot, and had a projected income stream from future sales of 120% more as a result of improved regeneration and stocking. Let me give you an example of one couple that recently was offered an unsolicited bid of $20,000 for their 20 acres of mature pine sawtimber. Realizing the complexity of selling timber, the couple hired a consulting forester to watch out for their interests. The consulting forester, who worked by contract for a percentage of the gross revenue, conducted a sealed-bid timber sale. Gross revenue from the sale was $39,895 or $19,895 more than the original unsolicited bid. This increase in income was significantly higher than the fee charged by the consulting forester.
- Check the market. Check the current timber market demand and recent trends. Prices for sawtimber and other high-value products fluctuate widely. A professional forester tracks market trends and can advise you on when is the best time to sell. Price information can be found by visiting: http://forestry.ces.ncsu.edu/forestry-price-data/
- Have a reforestation plan. Landowners should begin planning reforestation well in advance of the harvest cut. Having a well-planned timber sale that includes a reforestation plan will minimize regeneration costs and assure that the desired species regenerate on the harvested area.
- Mark the sale boundaries clearly. A legal timber sale requires that harvest boundaries be marked clearly. Resurveying the boundaries is often the biggest expense of conducting a timber sale, but the cost can be deducted as a cost of the sale. Establishing well-marked boundaries can protect the seller from increased liability and litigation.
- Use a registered consulting forester. Have a registered consulting forester cruise the timber to estimate its volume, quality, and value. Consulting foresters are available and prepared for this work. DO NOT rely on the timber buyer to assure you fair market value; their interests are not your interests.
- Inform neighbors. Inform adjoining landowners of any proposed timber sales to make certain that boundary and access road locations are acceptable. Also, you may find that your neighbor wishes to sell his timber, too. Combining sales among neighboring tracts can sometimes increase volume without substantially increasing logging costs, which could result in higher prices to the sellers.
- Have access to the land. If the land on which the timber is for sale has no reasonable means of access, a statutory right-of-way (cart way) can be established pursuant to NC General Statue 136.69. This statue provides entry and exit to a public highway over intervening lands from other lands that have no other reasonable means of access and that are being or could be used for legally identified commercial or agricultural purposes. A landowner is entitled to a right-of-way if he is engaged in an activity enumerated by the statute, if there is no public road or other adequate means of reasonable access to the landowner’s property, and if it is necessary, reasonable, and just that the landowner have a private way.
- Advertise the sale. Use a consulting forester to advertise the timber to all reliable buyers in the area. High-value tracts could attract buyers from as far away as 100 miles. To obtain a list of most timber buyers for a particular county in NC, give us a call.
Research shows that sealed bids usually result in a higher offer than auctions or negotiated sales. Potential buyers can best be notified by sending them invitations to bid on timber. Provide as much information about the timber, the tract, and contract restrictions as can be given in the bid invitation. Describe payment provisions, including any security deposits or performance bonds that will be required. Also include copies of vicinity maps, plat maps, or aerial photographs indicating the location of the timber offered for sale.
- Preharvest plans. Have your forester develop a preharvest plan to look out for your interests. Preharvest planning is necessary to protect soil and water quality and to ensure implementation of appropriate best management practices (BMPs). For the landowner’s protection, the plan should include a list and description of the BMPs to be implemented.
Depending on the site and nature of the harvest, the plan and map should address property boundaries, sales area, color and type of tree marking if used, forest type, soils, slopes, timing of harvest (season or weather controls), and approximate location of haul roads, skid trails, potential log landings, water courses, streamside management zones, and planned stream crossing.
For more information on marketing timber and other related forestry topics, give us a call at the Cooperative Extension Center, 919-496-3344, or contact the Franklin County Forestry Service, or visit http://forestry.ces.ncsu.edu.