Newsletter 4th Quarter 2019
Timberland Owner = Business Owner
There are many considerations when managing a forest: silviculture, wildlife, water quality, soil erosion, aesthetics, and recreation, among many others that vary depending on each landowner’s specific objectives. However, one consideration that is at the top of nearly all landowner’s objectives is maximizing income.
Tennessee Timber Consultants is a forestry consulting firm that works directly with private landowners in managing one of their most valuable assets, their forests. We work solely for you, the landowner, to not only ensure that your forest is being sustainably managed, but to also ensure that your property and your financial interests are protected. We are your agents.
When it comes to selling timber, you have to change your viewpoint from landowner to business owner because when you own timberland, you not only own a forest, you also own a Business. You have an inventory of product (trees/timber) that you wish to market to potential customers (sawmills, loggers, brokers, etc.) who wish to purchase that inventory.
Which begs the question, “How much timber do I have in inventory? How much is my timber worth?” For the average landowner, unless you obtain an appraisal, you simply don’t know. You are merely pricing your product based on what the buyer tells you it is worth. Not all trees are created equal. Prices paid for standing timber relate to tree species, tree size and quality, logging access, logging terrain, and distance to markets in a fluid economic environment. On top of that, more than ever before, prices can also be dictated by export markets.
Just like trees, not all buyers’ markets are created equal. Some buyers may not only be able, but also willing to pay more than others based on their current individual markets and circumstances.
No one knows a buyer’s markets and circumstances except that buyer and those involved in running his or her business. This is precisely why we advertise our sales near and far, online and offline to get our clients the best offer possible for their timber.
It is vital that landowners understand that selling timber is not an event, it is a process. When you hire Tennessee Timber Consultants to sell your timber, you are hiring us for the entire process, from beginning to end. While being mindful of the landowner’s objectives, we determine:
- Forest Conditions on a stand by stand basis
- When and Where to harvest
- What type of management system to implement within each stand
- Thinning, Group selection, Single-tree selection, Retention harvest, Clearcut, etc.
- How much timber is being sold
- Total acres within the sale area
- Total number of trees to be sold
- Total volume (boardfeet, tonnage) to be sold
- What the fair market value of that timber is
- Develop a sale prospectus for the timber being sold
- Including volume, but not value of the timber
- Including Terms and Conditions of the sale so all buyers are on an even playing field.
- Market/advertise to all reputable buyers in the region
- Sell your timber through a sealed bid, lump-sum situation (in most cases)
- Assist you in executing a timber contract/deed with the eventual purchaser
- Monitor logging operations from start to finish
- Establish a Tax Basis for the timber sold to minimize tax exposure
For those of us in the industry like timber buyers and consulting foresters, it’s nothing new; we do this on a daily basis. But, for the average landowner, selling timber can be a once-in-a-lifetime opportunity and should be managed as such. If done properly, quality timber can be managed in perpetuity. Unfortunately, in most situations it takes decades before we see the result. We may not be around to reap the benefits, but those that we leave behind will be. For more information regarding selling timber and other forest management services, we encourage you to explore our “Woodland Owners Forestry Guide,” or give us a call at 731-968-2953.