2.  1. The nature of the timber  Species, total volumes, grade, etc.  2. The nature of the tract on which the timber is located, and its market access; and  3. The circumstances surrounding the sale  Stumpage price is paid by the mill. They expect to absorb the cost of logging and still make a profit from the lumber.

3. CHARACTERISTICPOOR STANDEXCELLENT STAND Timber volume per acreLowHigh Total Volume in tractLowHigh Size of treesSmallLarge Frequency of limbs and knots Multiple limbsMerchantability length generally clear of limbs

4. CHARACTERISTICPOOR STANDEXCELLENT STAND Exterior AccessIntermittent RoadAll weather road touches property Interior AccessNo log roadsLog roads within ¼ mile of all of tract Average number of months loggable per year Four months or less due to: a.Soil trafficability b.Obstructions c.Severe slopes Year round except during severe weather; no obstructions which block skidding or hauling Distance to delivery point Lack of proximity to: a.Rail transportation b.Concentration yards Close to wood using facilities

5. FACTORPRICE WEAKENINGPRICE STRENGTHENING Number of bidsOnly oneMany Buyer & SellerSeller: poorly informed or under financial duress. Buyer: facing facilities shutdown due to low wood supply Seller: knowledgeable and under no duress Buyer: knowledgeable and under no supply problems Bid resultsWide spread between high and second bid Narrow spread between high and low bids Adequacy of time allotted Hurry-up sales cutting contract of six months or less Wide exposure of sale to market and adequate cutting time Involvement of middlemen Sales to middlemenSealed bid from forest products firm Form of paymentBelow-market interest rate on deferred payment All cash transaction

6.  Comparable timber sales  Timber price reporting services  Timber Mart South Timber Mart South  http://www.tn.gov/agriculture/publications/forest ry/tfbp.pdf http://www.tn.gov/agriculture/publications/forest ry/tfbp.pdf  Extraction from delivered log prices

9.  LEV – Land Expectation Value  Present Value = a/(1+i)t-1  a = value received every t years in perpetuity  i = interest rate  t = years between annuity payments  This is covered in Timber Management class