Timber Sales: A Planning Guide for Homeowners | Publications of the North Carolina State Extension (2023)

introduction

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wood purchasing process

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Timber sales methods.Timber is sold "by the piece" or "all inclusive". A unit sale is a sale where the buyer and seller negotiate a price per unit of harvested wood and the buyer pays for the wood after it has been cut and the volume determined. Wood per unit is sold by product class or at a composite average price for all products. Product classes include poles and posts, veneer or plywood, lumber, chips and saws, and pulpwood.

Landowners own wood per unit until harvest and payment received. Landowners continue to bear most of the risks associated with timber ownership, including timber destruction, damage from natural disasters, and theft. In an all-inclusive sale, the buyer and seller agree on the total price of the wood within a defined sales area, and the seller receives payment before the harvest begins. With this method, the buyer assumes the ownership risk when purchasing the standing wood.

Log owners should have a basic understanding of how standing wood volume is commonly estimated. A “timber cruise” is a timber inventory inspection performed to estimate the amount of marketable or marketable timber present. On a large or high value wood stand, the cruise may include measuring all marketable trees. Typically, the drive is based on a systematic sampling of trees in representative plots or swaths of the entire stand; it is performed using statistical design to provide confidence in the estimates.

Two measurements are typically needed on any tree to determine volume: diameter at 4.5 feet above ground level (DBH or diameter at breast height) and marketable height. The height of the wood is usually given in terms of the number of "trunks" (usually 16 feet long) to a "corner point" (usually a small 8 inch diameter end on the outside of the bark). The height of the pulpwood tree can be measured as the number of "sticks" or feet of pulpwood to a standard top diameter (usually 3 inches outside the bark), or the total height of the tree can be recorded.

Tree measurements can be made using a log scale or other forestry measuring equipment (see Forest Owner Note #5,Estimating the volume of a standing tree using a (Biltmore) Stick scale). Once the diameters and heights of the trees are known, their volume can be determined using various protocol rules. A rod rule is a table or formula used to estimate volumes for different rod diameters and lengths. Protocol rules usually measure volume in plank feet.

The quality or variety of the trees is also important, especially the hardwoods; Excessive branches and crooked or defective trunks have a lower value.

At least 100 protocol rules have been jointly developed with the International over the past century.¹⁄₄- Customs, Doyle, and Scribner protocol rules most prevalent in the eastern and southern United States. In North Carolina, Scribner's rule is most commonly used for southern yellow pines and Doyle's rule is most commonly used for hardwoods. The legal norm for dispute settlement is the international norm, which is the most precise.

The choice of the stem ruler can significantly change the estimation of the wood volume of a stand (illustration 1). If the buyer and seller are aware of this and the price is adjusted accordingly (Table 1), any protocol rule can be applied as the total value of the wood (price multiplied by quantity) remains the same (Figure 2). For example, a 14-inch DBH tree containing two 16-foot trunks might be estimated at 130 cubic feet under Log International's rule, 115 cubic feet under Scribner's rule, but only 75 cubic feet under Doyle's rule. A price of $115 per thousand cubic feet (MBF) under international rule would result in a value of $15 for the tree. To generate the same $15 trimming value for the tree under the other two protocol rules would require an adjusted price of $130/MBF under Scribner's rule or $200/MBF under Doyle's rule.

Wood buyers are increasingly using weight and other units of measure for wood. The choice of log ruler or unit of measurement is relatively unimportant to sellers of "blanket" lumber. However, landowners selling wood “by the unit” need to understand the units applied. The seller must have the means to verify measurements and know how to accurately convert these measurements to commonly used units. Weight scaling (the process of estimating trunk volume based on weight) is less desirable because tree species, soil, growth rate, and other factors result in very different weights per unit volume. There can be a difference of up to 35% in the weight of an equivalent volume of wood between similar species, and this can significantly affect the price a seller gets for his wood.

First find a ranger

A North Carolina couple recently received an unsolicited offer of $20,000 for their 20 acres of mature pine wood. Realizing the complexities of selling timber, the couple hired a forestry consultant to protect their interests.

The consultant forester, working under contract for a percentage of gross revenues, held a closed tender for the sale of timber. Gross proceeds from the sale were $39,895 - $19,895 more than the original unsolicited bid. This increase in yield was significantly greater than the rate for the consultant forester.

Advertise the sale.Use an advisory forester to promote the wood to all reliable buyers in the area. High-value products or brochures can attract shoppers from up to 100 miles away. For a list of the top lumber buyers for a specific North Carolina county or for all of North Carolina, seeWood Product Buyers in North Carolina, an online publication of the North Carolina Forest Service (NCFS).

Research shows that sealed bids often result in higher bids than auctions or negotiated sales. The best way to notify potential buyers is to send RFPs for timber bids (see Bids section). Include as much information about timber, area, and contractual restrictions as can be included in the RFP. Describe payment terms, including any required deposits or performance guarantees. Also include copies of area maps, plan maps or aerial photographs showing the location of the wood for sale.

Contracts.A contract sets out the terms to which the buyer and seller agree, as well as their rights and obligations under those terms. Timber purchase agreements or timber harvesting agreements are commonly used in transactions where timber is not sold in a fixed price sale. Payment is made periodically when the wood is delivered to a sawmill or loading point, although ownership of the trees passes to the buyer once the wood is cut.

Contracts are appropriate for parts sales such as pulpwood, chip-n-saw, selective woodcuts, piles and stakes, and other specialty product sales. However, because model contracts (see the Master Contract and Deed Provisions section) rarely contain provisions that are appropriate or desirable for specific sales, many buyers choose not to accept them.

atos. Deeds are most commonly used in all lump sum timber sales, particularly by standing timber buyers who require a deed upon payment. Most lumber buyers prefer a lumber deed prepared by their legal department. In many ways, deeds are less complicated than contracts. They contain the usual provisions (see section “Basic Contracts and Documentary Provisions”) for roads, fences, ditches, fields and boundary trees. The legal description of the property is the only additional information required. Before the deed can be entered into, it is essential that the seller's signature is notarized. While there are occasional changes that most landlords will accept, ownership of the timber passes to the buyer once a properly signed deed is provided.

Finally, sellers must exercise their logging control rights through the wording of the contract or deed, but without making the document long and complicated. These cumbersome documents can discourage wood buyers, cause them to bid lower, or be impossible to manage. Likewise, too many cutoff restrictions will increase cutoff costs, in which case the seller must be willing to accept a lower residual price. However, some important limitations include limiting cutting in wet weather and limiting the time the buyer has to remove the wood. In most cases, a period of no more than two years should be fixed.

Invitation to submit an offer
On 30 +/- acres of woodland owned by Joe Pine, Tupelo County, NC
March 18, 2015 at 10am

wood description.Joe Pine, through his agent, Selling Timber Enterprises (hereinafter “S.T.E.”) offers for sale all timber within the Sales Territory. The wood sales area mainly supports mature loblolly pine wood with some mixture of pine and hardwood pulpwood and is reforested after harvest.

Summary of wood quantities:Volume estimates are for informational purposes only and should not be construed as implying or guaranteeing any specific quantity of timber by the owner. For information on logging cruises, contact S.T.E., (111) 222-3333.

Estimated Wood:(6” up) Scribner 78 Pine – 212 MBF /1389 tons
Pine C-N-S -II MBF /100 tons (10" up) Doyle 78 Misc Hdwd - 2 MBF /18 tons

Pine estimate for pulp (including facewood) - II tons
Hard wood - 70 tons

Retail space, property lines and boundary markings.The timber sales area is bounded by Reedy Creek forming the western boundary, the 2007 NCSR State Highway centerline forming the northern boundary, and the lines described in Charter Book 8-J page 401 forming the southern and eastern boundaries back to the creek (west edge) way). Consult the attached map for better identification. The sale has good access with average cutting conditions. The area is located 22.5 miles east of the town of Red Oak in Tupelo County, NC. Registry access is provided from NCSR 2007 onwards. Territory borders are marked with blue color. Ribeirão Management Zones (SMZ) are marked in red and no trees can be removed from within the SMZ.

type of sale. The wood will be sold by closed bid on March 18, 2015, from 10 am to 2 pm. Proposals are accepted at the S.T.E. office, 100 Ash Avenue, Red Oak, NC. Only bids made in person at the point of sale will be accepted. Seller reserves the right to refuse any bid. A 10% deposit may be required at the time of sale, at the sole discretion of the seller's representative, S.T.E. The full amount of the surcharge is due upon completion. The completion takes place within 10 days after the sale of the wood. A $1,000 performance deposit is also required at time of closing.

Sale conditions.The sale of the timberland described above is subject to, but not limited to, the following conditions: (The conditions for harvesting are specified in a separate contract and must be signed by both parties.)

1. Term timber offered under the terms of the sale must be felled and removed within 24 months of signing the timber deed.

2. Assignment of Contract. Buyer will not assign this Agreement to any third party without the consent of Seller or Seller's agent. In the event of such assignment, the buyer will not be released from these obligations under the contract of sale, unless the seller has granted such release. Buyer may subcontract the felling, felling, transport and removal of timber without Seller's written consent, but shall not be released from any obligation under the Timber Sale Agreement.

3. Notification. The seller's representative must be notified at least 24 hours before the start of extraction and 24 hours before the expected completion of the harvest.

4. Cover/Rotate/Load. All decking, skids and loading must be done within designated lumber sales areas.

5. Ditches. All trenches on site must be free of wood debris. All trenches are left in better or equal condition as before extraction.

6. Debris registration. Wood waste must not be left outside designated sales areas. Logging waste in deck areas must be distributed across sales areas so that no pile is more than 36 inches from the ground.

7. Limits and Reserved Areas. Boundary trees cannot be felled. Damage to boundary trees is assessed at a rate of two hundred dollars per tree, in addition to the Realtor's assessed value of the tree. Buyer is responsible for damage to corner markings and boundary trees. All areas within the marked boundaries can be harvested, with the exception of SMZs.

8. Trash/Fire. The timber buyer is responsible for keeping waste off site during logging, which includes maintaining a waste barrel on site. Buyer must use reasonable care to avoid wildfire as a result of Buyer's actions.

9. Damages Provision. The buyer of the timber shall indemnify and hold the seller harmless from any liability and loss, including reasonable attorneys' fees and other costs, arising out of the operations, activities or omissions of employees, contractors, subcontractors and guests, and if such liability or loss to adjacent property , purchaser's licensors or others for property damage, personal injury, death or otherwise. The buyer undertakes to maintain civil liability insurance for its agents and indirect employees.

10th title. The Seller guarantees the ownership of said wood and undertakes to defend such ownership against any and all claims. Ownership of said wood passes with ownership of by-products, such as ends, boards and sawdust, but only if the buyer removes them at the time of the purchase and sale contract for the wood. The wood buyer is not authorized to sell firewood directly to the general public in the ward.

11. Statutes. It is the buyer's responsibility to comply with all federal, state, and local laws governing logging such as logging, water quality, and river debris as they affect this property, and the buyer will be solely responsible for any violations of these regulations. . It is the buyer's responsibility to follow best management practices as per the Forestry Practices Guidelines (15A NCAC 11 .0100 - .0209).

12. Wet Weather Provision. In wet weather, the seller's representative is entitled to temporarily suspend harvesting operations if damage to the site is excessive or likely due to weather conditions. The mowing period will be extended for as long as the agent stopped harvesting.

13. Performance Warranty. Buyer is required to post a $1,000 Performance Bond with Seller's Agent at closing. The security deposit will be forfeited by the buyer to the agent in the event of default in accordance with the court agreement, subject to a final court inspection by the agent. Deposit does not limit liability for any damage incurred as determined by the agent

14. Entry and exit. Roads on the timber sales map can be used for entry and exit. Roads must be maintained in conditions comparable to those encountered prior to the start of extraction. Gate keys are provided.

15. Crossing streams. There are no crossings of streams. Ditches and streams must be kept clear of any wood debris. Buyer is responsible for seeding and mulching any creek crossings or ditches that may be encountered during extraction.

Basic provisions of the contract and document

Contract.No two logging contracts are exactly alike, but all contracts must contain basic clauses such as:

1. Title guarantee and description of the property and boundaries.
2. Specific description of the wood transported; Methods for determining the trees to be felled; and when, where, and how to determine volume.
3. payment terms.
4. Beginning and duration of the contract.
5. Provisions covering damage to undesignated trees, fences, ditches, streams, roads, bridges, fields and buildings.
6. Provisions to cover fire damage resulting from the negligence of the pickers and to protect the seller from liability that may arise during the course of the harvest.
7. Clause limiting extraction in wet weather to repair site damage when heat occurs.
8. A pattern to fully utilize the salable part of trees.
9. Compromise Clauses for Disagreements.

Tat.A simple wooden deed might contain clauses like:

1. Indication of the parties, seller and buyer.
2. payment terms.
3. Legal description of the property.
4. Title guarantee against third-party claims.
5. Special conditions under which forest areas must be cleared. These vary depending on the sale.
   Possible conditions are:
   1. A clause about the duration of the harvest.
   2. Map of the sales area showing the location of access roads, decks, skid tracks, etc.
   3. A clause about the state in which roads, skid tracks, decks, etc. must be left after the completion of the harvest.
   4. A clause covering damage to undesignated trees, roads, fences, bridges, streams, etc.
   5. An erosion and sediment control clause.
   6. A clause limiting extraction in wet weather to repair site damage when rutting occurs.
   7. Notification of the start of harvesting work.

A consumer guide to advice from foresters

Proceed to a consumer guide to advise rangers

Seek professional advice
If you are looking for professional forestry advice, ask yourself a few questions:

• What qualifications do you have?
• What are your fees and what services do you offer?
• Are you affiliated with a sawmill or wood products company?
• Can you provide references from past clients?

To verify if a ranger is registered in North Carolina, visit theNorth Carolina State Registration Board for RangersWeb site.

As with all professions, the knowledge and experience of forest management consultants varies greatly. In North Carolina, registered forest rangers generally have a bachelor's degree or higher in forestry, or have demonstrated equivalent proficiency by passing an exam administered by the state registry of foresters. They must also meet continuing education requirements set by the State Forestry Registration Board. Many qualified consultants are certified members of the Association of Consulting Foresters of America, Inc. - an organization that promotes the service, practice and standards of forestry consulting and seeks to strengthen its ethical and professional standards.

A list of forest consultants can be requested from the countyCooperative Extension Centers, doNCFS, or fromAssociation of Forestry Consultants of America, Inc.. A landowner can also get names from a phone book or from a friend or neighbor who owns a forest.

The owner should obtain information from several consultant foresters before selecting one. Be sure to get the forester's specific qualifications, references from past clients, and fee estimates. Ask about a current job so you can see the counselor's work for yourself. To avoid a potential conflict of interest, avoid those who are buyers of forest product companies.

Once a professionally qualified consultant forester has been selected, a written contract or agreement must be signed. It should include a list of the services to be provided, who will provide them and the agreed cost of the services. The consultant must accept all questions and clarifications that the property owner may request. Good communication between owner and consultant is essential.

wood sale.If a timber stand is harvested using the clearcut method, the surveyor marks the boundaries of the area. When applying the selection process, the consultant marks the limits, being able to mark or not the trees to be harvested depending on the selection process. Trees to be harvested are marked by painting the stumps and trunks to ensure that unmarked trees are not felled. Sometimes the trees to be left are marked instead of the trees to be felled. If the timber sales area boundary coincides with a property line, a property line survey by a registered surveyor may be required. The consultant will carry out an inventory of the stand and note the species, diameter, height and quality. With this information, the consultant calculates the sales volume and draws up a contract or deed for the owner's approval. The consultant can also mark where the felling trails are and where the trees will be loaded onto the log truck for limbing, cutting to length and loading.

In a closed bid sale, the forest consultant will send potential buyers an “invitation to bid on standing timber” that includes location and area maps, a legal description of the property and boundary marking, and the location of buffers or areas. excluded from the sale and description of the quantities, species, size classes and qualities of the trees. The public notice may also include dates for the forest inspection, payment schedule, dates for starting and ending the cutting work, the deposit that may be required and any other conditions of sale that protect the property and interests of the landowner.

The forester shows the forest to potential buyers and monitors the opening of the offer. Once the owner has selected the buyer, the sale is usually completed by an attorney who will have the buyer sign the deed and then collect the performance bond and all or part of the sale price. Once the sale is made, the forester takes care of the felling details. The Consultant will periodically review the registration process to ensure compliance with the terms of the Agreement.

If a negotiated sale is arranged (similar to a closed bid sale), the consultant may contact buyers personally to try to get the best price for the balance.

management plans.The management plan is based on the objectives and intentions of the property owner. The management plan information generally describes the goals and objectives, the current condition of the forest, the history of the stand, the species present and the size, volume and quality of the wood. For each forest stand, the plan should list a recommended sequence of work needed to achieve the targets established for the management period. Management plans vary in sophistication, from a brief report based on a short walk through the forest to a detailed financial analysis with computer simulations of forest growth and proposed treatments. The cost reflects the time and effort required to collect the data and create the report.

To create a management plan, the forest ranger consultant must locate the boundaries of the managed area and carry out an inventory or logging survey of the trees and forest products. Age, stocking and growth rates are estimated. This data is processed and a forest-like map is created. The ranger then develops a management plan that furthers the owner's goals.

Regeneration.Establishment of a new forest plant is encouraged by providing space for growth through harvesting, killing or all or partial removal of the previous harvest. Mandatory incineration and/or mechanical site preparation are sometimes necessary to provide the appropriate environmental conditions for natural or artificial regeneration.

Mandatory burning removes unwanted vegetation or wood waste prior to establishing new forest. It's an inexpensive, low-impact alternative when done right. The consultant assists the property owner in selecting a certified contractor or burner to carry out the incineration. Upon completion, the consultant will inspect the area to determine if the desired results have been achieved. Landowners interested in conducting mandatory burns on their properties should contact NCFS about the certified burners program.

Mechanical site preparation, which is generally more expensive than mandatory burning, often requires an excavator. It is used first to clear unwanted vegetation and then to cut or pile up vegetation and debris from deforestation. The consulting forester should begin this process by notifying external contractors and accepting bids for the work. The consultant can assist in selecting a contractor and will inspect the area upon completion. Once the ground is prepared, consultants or hired teams can plant seeds or seedlings.

Other services.Consultants can also provide advice on wildlife and recreation management, state and federal cost-sharing programs, tax issues, estate planning and road construction.

For more information on forest management and how to choose a consultant forester, contact your local Cooperative Extension Center, NCFS, or the Association of Consulting Foresters of America, Inc.

Summary

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A landowner does not need to sell wood frequently to sell successfully, but selling wood can still be a mysterious and complex process. It is highly recommended that you contact a forestry consultant to sell your wood. Remember, a single sale may be your only chance to capitalize on the many years of annual revenue accumulated at a scrap metal shack.

No publication can cover every possible marketing situation, and it will not make you an experienced timber trader. But there are questions you should ask and answers you should know. Ask a forester for help before selling wood. Know what to sell and when. plan reforestation. Be a tough trader. In short, market your wood commercially to get the most out of it.

references

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Attachment

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Forest owners sell timber for a variety of reasons. Logging and other forest management decisions are generally based on economic considerations. Product changes, current market strength and market trends influence economic decisions. An important economic consideration is the rate at which a tree or stand increases in value.

Tree stands have reasonably predictable volume growth rates. After several decades of vigorous development, the growth rate slows with age. Value growth is more complex than volume growth as it is also affected by quality standards and product changes. In general, the rate of growth in value also decreases after trees grow into more valuable product classes. As its value growth falls below an "acceptable" rate, a field is considered "financially mature" and must be thinned or harvested.

To determine financial maturity, measure the market value of the tree's volume and growth. Most landowners in North Carolina get the highest values ​​for hardwood logs and veneers, products that are often measured in feet of wood. So you must cherish themboard footStanding wood content and growth.

There are two ways of looking at the growth in the value of forests: Valuegrowth per acreand valuegrowth percentage.SeTerralimited, managers sometimes seek to maximize value and growthTo install Pro Hectare.A field can be scheduled for harvest when it is no longer producing, say, 500 cubic feet (or the economic equivalent, depending on the market, say $60) per acre per year. You must balance this value per acre with other income opportunities, such as B. Crops Compare.

Moneyit is more limited than land in most investment situations. Managers therefore try to maximize returnspro dollar. To this end, the increase in the value of trees (or stock) is conveniently expressed as a percentage for comparison with possible returns through alternative investments. If the value of a booth's inventory (the capital invested in a booth) can yield more (a higher percentage) of alternative investments, then the booth is financially mature.

These two methods of assessing the suitability of wood growth can lead to very different answers. For example, a stand of 5,000 cubic feet per acre and a growth of 500 cubic feet per acre per year returns 10%. Ten years later, the same stand would have 10,000 cubic feet because the annual growth was automatically reinvested (tax free). However, the level is now only 5% (500 to 10,000), although the volume growth rate has remained constant. After converting the percentage growth in volume to growth in value, the investor would be prepared to trade this financially mature wood stock with more attractive alternatives elsewhere.

The following tables use easily obtained field measurements to estimate percentage growth in standing wood volume. Volume growth is then systematically converted to value growth to assess financial maturity.

How to estimate volume growth

Select some of the tallest and most vigorous "harvest" trees in the stand to sample. enjoy bothcurrent volumeEgrowthfor these trees.

current volumeis estimated according to the appropriate log rule after measuring 1) the diameter at breast height of the outer bark (DBH, 4.5 feet above ground line) and 2) marketable height in 16-foot log numbers. Commercial height is the point where the tip of the smallest saw log would cut and is usually determined by the location of heavy branches. The top trunk diameter at this point (commercial tip) can range from less than 50% DBH for trees with 4 trunks or more, to about 80% DBH for 1-trunk trees. Commercial tip diameters in most small to medium sized woods average about 8 inches inside the bark.

growthThe estimate also depends on height and diameter as they change over a period of time (e.g. 10 years).

Market height growth is difficult to measure, but can be roughly estimated using Table 1 in the Appendix. Height growth is mainly determined by age and site index (the quality of soil for tree growth). Appendix Table 1 assumes approximately a constant live crown of 30% for "typical" conditions.

Diameter growth can be measured by extracting a growth core. Measure the last 10 annual rings (10 year radial growth) and multiply by 2.1 to convert to diameter to compensate for bark growth. An alternative for fast-growing trees is to count the number of rings in the last radial inch.

Use this size and growth information to determine the board foot growth rate as a percentage of annual compound interest (Appendix, Table 2). The tree size determines the appropriate row in the table, while the growth rate determines the correct column. An example is given below the table. Remember that no stand can grow faster than your strongest utility trees.

The growth rates in Appendix Table 2 are based on marketable volume growth only. If stock prices are the same at the beginning and end of the growth period (10 years), the growth in value would be identical to the growth in volume. This is usually not the case. Both inflation and the increase in value of larger trees tend to cause burrow prices to rise over time. To convert volume growth to value growth, apply the price change information using Appendix Table 3.

When price increase information is expressed as a percentage, it roughly (but not exactly) corresponds to volume growth. If appropriate prices are available for the end and beginning of a 10-year growing season, a simple price ratio (end-10-year price divided by start-up price) can be used to enter Appendix Table 3. As an example, a price ratio of 1.5 (50% increase in 10 years or 4% interest compounded annually) applied to the example tree in Appendix Table 2 growing by 10% gives a value growth rate of 14 .4% a year.

Diploma

Percentage growth is a method for deciding when to thin or harvest a financially mature forest. However, this is just a guide. Market fluctuations alone can offset several years of growth. And most inventories can be managed beyond strict financial maturity for many years before stagnation or potential disaster begins to force renovation or sale of wood. Therefore, percentage growth or any other determination of financial maturity must be accompanied by a comprehensive management plan and a sound marketing strategy.

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