Timber Sales: Harvest and Sell Trees with Success

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What is a timber sale contract?
How do I sell trees?

For many landowners, a timber sale may take place only once or twice in their lifetime, and has the potential to alter large areas of woodland.  It is for this reason that all the right planning needs to be done and all the precautions need to be taken so that you get what you want now and into the future.

Some benefits from conducting a timber harvest include:

  • Improving wildlife habitat – by creating conditions that will attract the wildlife you are looking for
  • Enhancing recreational opportunities – widen/improve trails and roads and the network of trails on your property
  • Improving the aesthetics – by creating visual diversity through favoring species with different colors and textures and creating a mixture of different sized trees with more shrubs and ground plants
  • Reducing the wildfire hazard – the buildup of dead and dying trees can create the right conditions for wildfires.  Regular timber harvests will reduce this buildup and keep trees healthy and vigorously growing.
  • Income from the sale of timber – can be thousands or tens of thousands of dollars

Some reasons to conduct a timber harvest include:

  • Trees are too crowded – this will stress trees and cause them to become susceptible to insect and disease attacks 
  • Favor one species over another - create better growing conditions for your favored trees by removing undesirable or non-native trees and shrubs
  • Start a new forest – the condition of the existing forest and/or the goals of the landowner may dictate that removing all the trees and planning for the growth of new trees is the right thing to do

Read more about the benefits of selling timber in Multiple Benefits from Forest Management 

Why work with a forester when conducting a timber sale 

Many landowners are skeptical about employing a professional forester. They believe that using a forester is nothing more than an added cost. In fact, research shows that landowners working with a professional forester during a harvest end up with a healthier forest, greater satisfaction in the results, and more money. Here is what a forester brings to a timber sale and how these skills can help you meet your objectives and get a fair price:

  • Forestry expertise – can estimate the volume of timber to be harvested, mark the trees to be harvested in line with your goals, and plan for how the sale will take place including how the trails and roads will be used
  • Market knowledge – can ensure that you get fair market value for your trees and match the local demand for timber with your forest and goals
  • Experience with loggers – will know and have experience with reputable loggers, their equipment, and can communicate your needs and concerns
  • Sale oversight – can protect your interests during harvesting, ensure that best management practices are properly implemented, and administer the timber sale contract

Learn more about foresters on the Assistance page 

Working with a logger 

Connecting with the right logger is critical to you getting the most out of any timber harvest.  A forester you employ will help find the logger that offers the best combination of skills, willingness to address your needs, and price for your timber.  There are many reputable loggers that work in the state, and the best of these participate in the Master Logger Program.  Other characteristics to look for when considering a logger include:

Training and education
Experience
References
Proof of insurance

Learn more about loggers on the Assistance page 
Learn about the different harvesting equipment loggers utilize in Logging Methods for Wisconsin Woodlands 

Assembling the critical information for your timber sale to be a success

It is best not to go forward with a timber sale until you have some critical information in place.  Before any paperwork is signed, hands are shaken, and equipment comes onto your property, you need to know what you hope to achieve by harvesting trees.  It is also important for you to communicate to loggers what your goals and expectations are for the harvest. 

A prospectus is a document containing the information about your forest and the timber sale that you want to share with potential loggers.  It is used as an advertisement to loggers about your sale and provides clarity between you (the seller) and the logger (the buyer). The prospectus includes information on:

  • The trees you are offering for sale – a list of the different species to be cut and their estimated volumes (also called stumpage)
  • Your property – the owner’s names, a legal description for the property, any restrictions on what kinds of equipment can be used and what time of year the harvest can take place
  • Your requirements of the logger – any road building needed, a bid bond, how the bid will be made and when and how payment will be made

The prospectus should include a clause allowing the seller the right to refuse any and all bids. If there are too few bids or all bids are below what the owner feels the timber is worth, this clause allows the owners to withdraw the timber from sale.  A forester can assemble all the needed information for a prospectus, and can make sure that it gets to the right loggers for your needs.  Once the sale prospectus is mailed, you will receive bids for your trees. 

Learn more about the sale process in Lake States Woodlands: Marketing Timber 
Learn what your timber might be worth in What’s My Timber Worth? And Why? 
Learn about the factors that influence timber prices in Factors Influencing Timber Prices for Landowners 
Learn about measuring trees in Measuring Trees and Estimating Volume 

Learn In Less Than 5 video: Measuring how your woodland is changing

Two ways to sell timber

Timber can be sold either as one lump sum or can be sold by the product that comes off your property (called a scaled product sale).  One system may be better than the other depending on what you are selling and how you plan on reporting the income from your sale.

Lump Sum Sales                                       
From the perspective of the landowner, lump sum sales, in which buyers submit one bid for all designated stumpage, is the simplest way to sell timber. Buyers must determine the volume and quality of timber, and may offer a single payment or several partial payments. If you conduct timber sales infrequently and are planning on reporting income from a timber sale as capital gains, then the lump sum sale is the way to go.

Scaled Product Sale
Scaled product sales are more complicated. Bids are based on prices per unit volume by species, product and/or grade. For example, a bid might include $300 per thousand board feet of red oak sawlogs and $18 per cord of hardwood pulpwood. Landowners who sell timber frequently may be best served by holding scaled product timber sales.

Here is a sample timber sale prospectus that advertises an upcoming timber sale 
Learn more about these sale methods in Lake States Woodlands: Marketing Timber 
Learn how to treat income from sales as capital gains in Determine Your Basis and Keep More Timber Income 

The Timber Sale Contract

The contract is the most important part of the timber sale, and should not be left out or glossed over.  The contract protects both the buyer and seller as each knows what is expected of the other.  It is best to utilize a contract that you and your forester create rather than one the logger provides.  The contract should not give the buyer free reign, nor should it be severely restrictive either. 

A timber sale contract can be complex.  A landowner should consider consulting with both a forester and an attorney to cover all aspects of the contract.  Foresters are not always aware of all the legal and liability concerns.

Key elements in the contract include: liability and responsibilities; property and sale description; sale method; bid price; sale date; terms of payment; utilization standards and bond requirements; notification and cutting notice responsibility; end of sale requirements.

Some bad things that can happen if you don’t have a contract for your timber sale:

  • You could be liable if someone gets injured on your property
  • It may take a long time to get payment or you may not get payment at all
  • The logger may take only the best trees and leave the rest even though this is not what you may have wanted

Here are the things to be included in a timber sale contract 
Learn more about a timber sale contract in Understanding the Sample Timber Sale Contract 
Learn how to have a successful timber sale in Conducting a Successful Timber Sale  

Self-paced "Conduct A Timber Sale" Lesson

This session will cover how to choose a forester and logger and the steps to holding a successful timber sale that ultimately meets the needs of you, the landowner.

After this lesson, you will:

                1. Know what to look for in a forester and logger

                2. Know the steps to a successful timber harvest

If you have questions after this lesson, please email us.
See the main page for more self-paced lessons.
Are you using an iOS device (iPad, etc)?  Check out our non-Flash videos.

 

Related Blog Posts

To cut or not to cut
What are my trees worth
Ode to a clearcut 

Related Publications

Hiring a consultant forester
How to hire a contractor
Timber harvest and sales section of the publications
Tree and forest value section of the publications

Related Websites

Directory of WI Cooperating Foresters
Society of American Foresters (professional organization)
WI Master Loggers
WI Circuit Court 

Hear From a Woodland Owner

DeWitt talking about the aesthetics of a timber sale

Looking for More Information?  Try:

Assistance with Your Woodlands page
Silviculture: The Art and Science of Harveting Trees page