What are my Trees Worth?

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Dave Powell, USDA Forest Service, Bugwood.org

I just finished a series of classes for woodland owners on a variety of topics, and one topic that continued to be of interest to the participants was the value of trees.  Specifically, they wanted to know what certain trees are worth in their market.  My first response always was, “they are worth what you value them at”, but that tended to not meet their needs.

Of course, they want to know what aspen pulpwood is going for or what the price for oak sawlogs is now or something else along those lines.  And unfortunately, I usually don’t have the answers they are looking for.  The problem is that the prices folks are paying for timber are not readily accessible to everyone who is looking for them.  That is because there are a number of other factors that play into what someone is willing to pay for the trees on your property.  Here is an example that will help to illustrate some of these factors.

Let’s say that you and your neighbor have wooded properties that have pretty much the same kinds of trees, of about the same sizes and ages.  He sold some oak off of his property last month for $300 per 1,000 board feet.  The same log buyer tells you now he will only give $150 per 1,000 board feet for your oak.  You are surprised by the sudden drop in price and so ask the buyer what has changed.  He tells you that the difference in price is due to the difference in your property.

The buyer tells you that the oak on your neighbor’s property was right next to the road, and so was easy to get to.  Yours is located a half a mile into the property and will require the building of a road to get to it.  Additionally, the hills on your property are much steeper than your neighbor’s, making for a slower and more difficult job harvesting the timber.  It will cost the buyer time and money to build that road and work on the steep terrain, so he has to offer you less money for your oak to continue to make a profit.

The buyer then goes on to tell you that not all oak trees are created the same.  Your neighbor has been actively managing his forest for the past 40 years.  He periodically thinned his stands (i.e. harvested trees to make room for the remaining trees to flourish) and favored oak production over other species in his forest.  These practices have produced high quality oak trees of large diameter and straight stems.

You on the other hand let nature decide on how your stand of trees will grow.  Now, there is nothing wrong with taking this management perspective, but you did not get nearly as high a quality trees as your neighbor did.  So instead of having the highest quality trees (veneer) like your neighbor has, you have grade 1 trees which are still valuable but don’t garner the same prices as veneer.

One thing the buyer doesn’t tell you is that your neighbor hired a consulting forester to manage the timber sale for him, whereas you are working directly with the buyer.  The forester your neighbor hired has knowledge of the local markets for oak, and so knows what a reasonable bid is for oak timber.  Managing the sale yourself will save you a bit of money, but you most likely will be getting less for your timber than you would if you had hired a forester.

Now, everything about this example is based on you knowing what your neighbor got for his timber.  More often than not, you won’t have a clue as to what timber is selling for in your area without doing some investigations.  The best way to find out what you might get for your timber is to solicit bids from potential buyers.  To do that, you need to develop a prospectus of what you are selling and distribute it to buyers for their consideration.

That sounds easy enough, but developing the prospectus will require detailed information about the trees you are selling and your woodlot.  Some landowners are capable of putting together these kinds of information, but this is really a job best done by a forester that you employ.

I encourage anyone who is considering selling timber to do some research into the process and talk with a forester to be the best informed they can be before undertaking any harvest.  Some great publications on this topic are “What is my timber worth?  And why?” and “Conducting a successful timber sale”.

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