1. David R. Jackson Penn State Cooperative Extension February 10, 2009 “I Have Timber to Sell” Timber Sales and Marketing

2. The Timber Harvest

3. Aspects of Plan Short & long term objectives Written descriptions Management recommendations Includes: - Property map - Schedule of management activities Has professional input Decisions to Harvest Should be Planned

4. Why sell timber? Should be based on your objectives The timber sale will help you achieve them Generate revenue Prepare for regeneration Maintain growth rates Improve stand value Improve wildlife habitat Develop recreation access Develop a List:

5. Water

6. The Minimum Standards of Good Forestry

8. Wildlife

9. Roads and Trails

10. Sustainable Forestry “... to meet the needs of the present (your needs) without compromising the ability of future generations to meet their own needs...” Timber sales should be conducted in a “sustainable” manner

11. “Silviculture” Proper Forest Management The theory (science) and practice (art) of controlling forest establishment, composition, structure, and growth

12. What Are You Leaving? Residual Trees and/or Regeneration

13. “Silver”culture Getting those bucks today, not concerned with tomorrow “Un-Sustainable Forestry”

14. “Silver”culture ≠ Silviculture

15. Objectives + Management = Increased Profits and… “Sustainable” Forestry

16. Diameter-limit Cutting (High Grading) Definition: Only harvesting those trees above a specified diameter. Results: Removes high value trees Leaves low value trees behind Reduces future management options Maximizes immediate income yield Decreases long-term income yield “Un-Sustainable Forestry”

17. IMPORTANT: Get Professional Assistance FIND A FORESTER WHO UNDERSTANDS YOUR OBJECTIVES AND IS ABLE TO HELP YOU PLAN AND EXECUTE THEM

18. Sources of Assistance PA Bureau of Forestry - Service Foresters Penn State Cooperative Extension - Programs and Publications - Timber Market Report Private Consulting Foresters - Stewardship Plan Writers Industry Foresters - Sawmills and Paper Mills

19. When Hiring a Forester ASK ABOUT 4 References 4 Other woodlots managed in the area 4 Credentials / Experience 4 A written agreement 4 Fee structure 4 Services provided

20. Access Sale/Property Boundaries Species and Volume Type of Sale Prospectus Competitive Bidding Showing Written Contract The Timber Sale Process

21. Determine Access

22. Properly Mark Boundaries

23. Know What You Are Selling Appraise and mark timber

24. Price Reports Penn State’s Timber Market Report http://www.sfr.cas.psu.edu/TMR/

26. Price Trend Price Average

27. Remember, wood is not a perishable product - You can decide when to sell - Timing is important

28. Type of Sale Lump Sum Sale or Scaled Product Sale - Pay as cut Either can be negotiated or sealed bid

29. Describes What You Are Selling

30. What is a prospectus? Advertises the timber sale - “Invitation to Bid” Outlines the requirements of the sale - Including buyer’s responsibilities Used to generate competitive bids

31. Competitive Bidding $ Is it Worth It?

32. Competitive bids from three actual timber sales * SALE A (9 Bids)SALE B (6 Bids)SALE C (10 Bids) $ 5,100 $ 8,300 $ 28,500 5,950 10,400 36,050 10,043 16,237 38,900 11,396 16,848 40,000 11,569 18,368 42,075 11,767 18,755 45,010 13,032 57,560 13,259 65,836 13,448 89,310 105,550 *North Central Pennsylvania

33. Understanding Markets What would you pay?

36. Question: How much would you pay for this timber?

37. Answer - What the market will bring! - The market determines price. “Stumpage Value”

38. What affects market price? (Stumpage Value) Weather/season Tract characteristics: location, accessibility Timber species, size, density, and quality - & end product Volume harvested Logging methods used or necessary

39. Distance to mills Sale conditions Insurance and other carrying costs Landowner characteristics Buyer’s needs / markets What affects market price? (Stumpage Value cont’d.)

40. Prospectus Competitive bidding Showing Written contract The Timber Sale Process

42. Timber Sale Contract Follows Bid Acceptance

43. Seller’s Responsibilities Designate timber to be sold Guarantee ownership Define boundaries Permit access Type of sale Method of harvest

44. Buyer’s Responsibilities Terms of payment Effective and expiration dates Comply with laws and bonding requirements Protect the resource – BMP’s Proof of Workers’ Compensation and Liability Insurance Adhere to end of sale requirements

45. Joint Responsibilities Transfer of title Subcontractors Performance bonds Settlement of disputes

46. Don’t Say It — Write It! Protects both the seller and the buyer

47. Handling the Sale Yourself Create a list of potential buyers Designate timber for sale & estimate value Contact as many buyers as possible Have contract legally reviewed Sign written contract before any work begins

48. Focus on what is left, not what you are taking.

49. Get Professional Assistance

50. Put it in Writing

51. Good Forest Management Does Not Cost… It Pays!

52. A great source of additional information

53. $10,000 or $100,000? Questions?