Am I getting low balled? Lumber question.

[Bricore]

We live in Alabama and have 8 acres of grown hardwood trees. I called a guy out to see what he'd give me for the lumber. He said $7.00 per cord of pulpwood (but wrote $8 on the quote), $20 per cord of logs.

I have no clue how many cords we'd get so I asked about how much per acre it would be. He said about $250-$500 acre. So, on the high side we'd get $4,000 for all 8 acres.

That seems low to me because we talked to a guy when we bought the house and he said he got $8,000 for 5 acres of hardwoods that weren't as nice/big as ours.

Maybe, the market has changed though..

He seemed like a really nice guy and we could use the money but I don't want to get ripped off either.

What do you think?

[highlands]

Those numbers are in the ballpark. The price paid for wood varies _tremendously_ with the quality of the wood and with the markets. Markets were very down. Now they're a little better. They're not high though. Firewood is actually doing better now than it was a while back.

Of course, this is assuming this is firewood, not lumber. How do you know? Is it worth having a forester come spend an hour perhaps looking at it with you. The county forester may do it for free. Logs might be big but if they go punky or are knotty, crooked or have other flaws then the value goes way down. Unless you know logs you have a hard time sizing this up.

If you have quality lumber then the price goes up a LOT. Pulp gives us the least money. Firewood next up. Then pallet logs are more valuable. Then lumber. Then cabinet wood (e.g., clear maple). Then the birdseye and such maple with no heart pull in the top prices because they get made into veneer. Buyers come to our log landings and bid on the individual logs. They can go for $5,000. If only all logs were veneer logs. Ah, but then I would be having to burn veneer in my wood stove and we can't have that now can we...

The veneer buyers tell me that they load the logs on ships down at the ports. The ships have mills right on board. By the time the ships get to Japan the logs are paper thin rolls of veneer. You see, all of our veneer gets exported to Japan - they pay very high prices. Then they make trinkets and sell them back to Americans on vacation who bring them home and keep knicknacks in them.

Cheers

-Walter
Sugar Mountain Farm
Pastured Pigs, Sheep & Kids
in the mountains of Vermont
Read about our on-farm butcher shop project:
http://SugarMtnFarm.com/butchershop
http://SugarMtnFarm.com/csa

[Cabin Fever]

I suggest that you visit the Alabama Forest Owners Association's website. (We are members of the Minnesota Association.) The Association will likely have helpful information and recommend foresters that can help you conduct a timber auction.

[Ramblin Wreck]

Timber prices have been very volatile. Also, it seems especially hard to find a logger will to clear a small stand. It's almost a nuisance for some loggers to move in their equipment, or at least they act like it is. I "gave" some pulp/tie logs away last year for around $300 an acre, but I needed it out of the way for pasture development.

[springvalley]

Get a second opinion. >Thanks Marc

[PNP Katahdins]

Originally Posted by springvalley

Get a second opinion.

And a third.

Peg

[Sawmill Jim]

I don't like the sound of it .If these are red and white oak of any size

I know some mills are going by weight but i prefer Doyle scale as in m bf .

Slow down and educate your self some here is you a start http://www.forestryforum.com/

[silverbackMP]

Hire a forester!!! Let him/her negotiate the contract, supervises, etc.

Out ten or so loggers I know, I would trust one.

[texican]

Unless you simply want the trees "gone", assume you're going to get what the bull gives the cow. Timber prices are low... can't give it away around here.

If you do sell, be there to watch them, and count the loads. I'd do a timber deed, spelling everything out in detail. Insure you have the means of getting payment... do a quick search on this site on deals gone bad.

No matter what you agree on up front, odds are, he's going to lower the price after the work is done.

You may not be getting lowballed... but guarantee you he's not going to lose any money.

[TnAndy]

Originally Posted by Bricore

We live in Alabama and have 8 acres of grown hardwood trees. I called a guy out to see what he'd give me for the lumber. He said $7.00 per cord of pulpwood (but wrote $8 on the quote), $20 per cord of logs.

What constitutes cordwood, and what are "logs" ?

Since there is 12-13 bucks difference, it's clearly in his interest to make sure there is way more cordwood than logs, huh ? What's the cutoff point, size wise, and who does the measuring ? Do you get to see the mill receipts ? ALL of them ??

No, there are so many ways to screw you on this deal, it isn't even funny.

Here is how you sell timber:

1. GET A BUSINESS ATTITUDE. You're not friends, or buddies, or whatever....this a BUSINESS DEAL, and if you need to come off as an "A" hole, do it. Selling timber is a one time deal for most people, and a whole lot of them get beat like a drum when they sell.

2. Get a job price....whole job, you don't care what goes where, which mill, what they pay, what size anything was, etc....you have a WHOLE JOB price. Don't get into cords or board feet or tons, or anything else that has to be measured.

Let THEM cruise the timber and figure what they will get. Lot of them won't want to do it..."It's better if we just cut, then measure, then each take our percentage"....but unless you plan to stand there all day, every day, with a log rule, OR follow each truck to the mills to record the weight of the loads, you ARE going to get beat on this type deal.....almost a guarantee.

Once you get a WHOLE JOB PRICE, you may decide "heck, that ain't much money.....forget this".....which is a LOT better than AFTER your timber is gone feeling like "heck, that wasn't that much money"...AND YOUR TIMBER IS GONE.

Lot of times when the buyer gets into quotes for tons/boardfeet/etc, they start throwing mythical figures around about how much wood is out there, so it looks like you will make a small fortune off your tract, ( "Yeah....I cut a tract like this just last week, and we got blah, blah, blah off of it" ) then later, "it turned out there wasn't that much there after all"......yeah....right.....but now the burden of proof is on you, and the timber is still cut and gone.....good luck with that.

3. THEN, make SURE you get at least 2 bids....that is the very minimum, 3 or more is much better. Friend of mine sold 15ac some years back....called me to see if $17,000 seemed fair....told him I had no clue, can't see it from my house, get several bids....called me back to say it went for $85,000 to the highest bidder ! ( Lot of LARGE oaks, and timber was selling higher then ).....so you can see from that, the low ballers ARE out there.

4. HAVE A WRITTEN AGREEMENT. Terms should include dollar amount of sale, payment terms, after cutting terms ( like clean up/etc ), penalties for out of boundary cutting/failure to meet other terms/etc. It should also require copies of their workman's comp insurance certificate ( because without them having WComp, YOU could be responsible for anyone working and hurt on your property ) and liability insurance coverage ( in case they damage your property in the process of being there )

5. THEN get a deposit. I wouldn't take less than 20-25% unless it was a huge tract. IF they start whining about "they don't have it"....then guess what, they "won't have it" when it comes time to pay you either.....they have money problems and those are gonna become YOUR problems down the road. They don't have enough operating capital to be in the logging business.
I would also demand weekly settlement checks if the job was large enough to go several weeks or more.....no check on Monday, no cutting that week. Hold a TIGHT reign on them, or you'll be sorry later. There are a lot of little fly-by-night loggers out there with some junk equipment, and a couple chainsaws.....and a real song/dance about how great this is going to be.

6. THEN get a performance bond, paid for by them, for the rest of the money, AND whatever contract conditions you set up....clean up, stump removal, skid roads sown with grass/strawed. clear cut everything, etc.....whatever it is you agree on, make sure SOME third party insures ( by a bond ) that this will happen.

7. Get references.....you want the name/phone number of the last 3 private owners this guy cut timber off of ( get the dates of the sales to insure they ARE probably the last 3 )....not just ANY 3 he "cherry picked" ( Like a lady asked me once "you got any GOOD references ?".....and I replied "Madam, I'm not quite so stupid as to give you the bad ones".....ahahahahaaa )...then CALL THEM....ask how he did, were they satisfied with the results of the sale, etc.

8. Finally, MARK THE BOUNDARY of the sale area. Take BRIGHT paint, slap it from tree to tree ( including the base of the stump in case THAT tree gets cut ) on the trees that DON'T get cut that circle the area that IS to be cut. I once saw an owner get some cheap signs printed at a local print shop that said "SALE BOUNDARY...STOP HERE" and stapled them to around the sale area ( to be removed later ) trees in addition to the paint so there was no excuse for out of bounds cutting.

Clear cutting is the best way to log, versus "high grading" ( just taking out the good timber, and leaving the less valuable, poorer trees ), but if you do decide to high grade, also mark THOSE trees to be cut ( with different color paint ) and especially the base of the stump. Doing this ahead of time will also get you the best bids on your timber as they can cruise it behind you more accurately figuring the volume of wood they will get.

[big rockpile]

Ok your talking about two different types of Timber.You say Hard Woods and he gives you a price for Pulp Wood.Most hard woods are not used for pulp which brings a lower price.

big rockpile

[KMA1]

TnAndy gave some good advice. The only thing I don't agree with is getting a job price rather than a price /wood cut. My forester friends always have advised me to sell by the amount cut. I got priced both ways on some timber I had to have cut, and I came out with about 40% more money paid to me for cut timber over the bids I had from the companies to buy the standing timber.

It is a very good idea to have a forester cruise the timber to estimate what you have and can expect moneywise, but always get several bids.

By the way, I would wait until the economy improves before I sold if at all possible.

If you are in north Alabama, I can recommed a forester to advise you if you wish. Just send me a private email.

Good luck.

[TnAndy]

Big Rockpile:

Depends on the location and type of paper mill. Here, almost ALL paper wood is hardwood.

Plus, now days, pulpwood goes for a variety of products from chipboard (OSB) to boiler fuel. There is literally no wood that has no use.

[Bricore]

Thank-you everyone! You have given me a ton to think about.

I did call the Alabama Forester Commission Office and a gentleman is coming out this week to look at our trees. He told me that, "loggers are like used car salesmen but they start low and you work them up higher."

In that 8 acres of woods we mostly have Oaks, Hickory (which the forester told me Hickory wasn't worth much), Persimmon trees, Sassafras trees, and Elm. There are a few that I have no clue what they are but they are not pines (we have pines on the other side of our place but we don't want that logged.)

I am going to write everything down. Thank-you all so very much for your help (TNANDY, I never thought about taking deposits,performance bond, or any of that...Thank-You, Thank-you!!) . It looks like I have lots to learn so I better get busy!

Thanks again!

[big rockpile]

Originally Posted by TnAndy

Big Rockpile:

Depends on the location and type of paper mill. Here, almost ALL paper wood is hardwood.

Plus, now days, pulpwood goes for a variety of products from chipboard (OSB) to boiler fuel. There is literally no wood that has no use.

Well down South I would take Pine to the Paper Mill but it was small and Long.Bigger ones went for Electric Poles.Here Pine goes for Lumber but the Logs are much Bigger.Plus here we can cut Pulp Wood in 4 foot Leights up to 20+ feet and Big around as we can load on the Truck.Pulp wood goes for anything from Bedding to Fiberboard.

Mostly cut Oak here the White Oak is used for everything but if its clear can get the most for Barrel Staves,Charcoal Mills get alot.Big thing now is Rail Road Ties.

Plus seems everyone is cutting Red Cedar.

But your right any tree can be used.

big rockpile

[TedH71]

Sassafras is mostly used for home made root beer. Gotta try that sometime!

[fantasymaker]

TNAndy has it right!
Get a job price and a share price being clear that the job price will be the minimum.

[Michael W. Smith]

All good advice here.

And to add (or reiterate) always get EVERYTHING in writing on the contract. Don't go by "Yeah, we can do that." "Yeah, we will do that." or "I'll make sure it gets done." HAVE IT IN WRITING - because once the job is done and something you agreed to verbally wasn't done, you have no proof.

And yes, ALWAYS get money up front BEFORE they cut. Half the money up front is good, the rest when the job is finished, or BEFORE it's finished is even better.

Stipulate what time frame. They can get you in a contract and then wait till next year to cut. Or they can start, and go to other jobs before they finish yours. Have a time frame when they can START and when they MUST be done.

Get 10 different loggers to bid, and you WILL get 10 DIFFERENT estimates.

And has been said, with the economy slowdown, timber prices are lower than they were. If you don't NEED the money, wait a few years. Unless a windstorm comes through and destroys your woods, those trees will continue getting bigger each year which means a bigger check when you do actually cut them.

[o&itw]

Originally Posted by Cabin Fever

I suggest that you visit the Alabama Forest Owners Association's website. (We are members of the Minnesota Association.) The Association will likely have helpful information and re
commend foresters that can help you conduct a timber auction.

I would check first with your state department of Ag/Conservation/Natural Resources. Under one of these headings will be some kind of Forestry Division
and usually they will have county or regional forester who will help you determine the value of the trees, make sure you get a good contract (one that limits the damage the loggers can do to your land, and what they are responsible for cleaning up) etc. If they have them in your state, and most states do, it can help make sure you get fairly compensated, get the type of harvest that is best for your land, and get a contract that protects you and your land from indiscriminate loggers.