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Learn about timber prices, market demand and how to get the best prices for your trees
Timber is a commodity, and as such the price of all types of wood fluctuates. Furthermore, prices fluctuate on a relatively local level (state or region) for roundwood sawtimber, pulp wood and chips. As with any commodity, timber prices are driven by the laws of supply and demand. Current timber prices can help you to determine the best time to sign a logging contract. Even with high market prices how much you make or lose comes down to the logging company you hire. Your optimal profit comes when hiring the best logging companies.
Market Value vs. Relative Value
How to determine the value of your trees requires more than simply checking current timber prices. Logging is a business with some hefty costs to harvest timber and get wood to timber buyers at sawmills. A logging company must consider current market value less their expenses and profit. The difference in market value, less expenses and profit, is the relative value - what you can expect to be paid.
As a land owner you obviously want to know that your logging company is being fair and honest. This is where you, as a land owner, need to understand some timber selling basics.
There is no quick and easy way to determine the value of your trees. This is because value is determined by multiple factors, and every property has a unique mix of these factors.
Three key factors that determine what your trees are worth:
- Types of Trees - Hardwoods (oak, hickory, pecan, etc.) are worth more than softwood trees (pine, cedar, etc.)
- Size of Trees - Larger (old growth) trees have the highest value. A sawmill can produce veneer and lumber, including furniture grade lumber, from large trees. Small trees are typically sold as pulpwood for lesser products such as paper, particle board and chip board.
- Access to Trees - Loggers need to use several types of logging equipment and machinery to harvest logs, and trucks to haul logs. Time is money, meaning trees that are easy to access are less cost to the logger versus harvesting trees in difficult areas (mountains, far from roads, etc.).
How to Determine Market Value
Rarely is a land owner qualified to assess the true market value of a stand of timber. The two most common ways to determine the market value for selling your timber are:
- Compare bids from 2-3 logging companies. It is extremely important that you go beyond price alone, and review the scopes-of-work. Be skeptical of any bid that seems far better than the others. If you do not have a very good understanding of what is required to do a complete and professional job, you may be ill advised to try comparing bids on your own.
- Hire a forestry consultant. Often you can hire a State Forester or Master Timber Harvester Buyer to walk your land and provide you with a written assessment.