Green Horizons Newsletter - AgEBB

Green Horizons

Volume 10, Number 4
Fall 2006

Marketing Marginal Timberland
Hank Stelzer, Extension Forester

They say that experience is the best teacher, and having experienced conducting my first timber sale at the MU Wurdack Farm, I wholeheartedly agree.

Nestled along the Meramec River in the Ozark hills of Crawford County, the 1,200-acre farm emphasizes research that integrates forage, livestock, forestry and wildlife practices. At least that is what the farm's mission is today. But, for many years the 800-acre forest component went unnoticed and unmanaged.

Logger
We checked the logger’s references to make sure he followed best management practices.
One of my first assignments upon becoming the State Forestry Extension Specialist in 2002 was to develop a working forest at Wurdack. The first order of business was to conduct a comprehensive forest inventory to see where we stood. Once that was completed, we developed a management plan that would place 360 acres along the southern edge of the farm under active management for the purpose of funding forest improvement practices on the remaining acreage.

Half of the designated area was harvested in 1996 on a competitive lump sum sale for 2,600 mixed hardwood trees containing an estimated volume of 305,000 board feet (International Scale). The successful bid generated $52,595 for the farm that helped fund the new educational building. However, during the harvest it became clear that the quality of the timber was good at best -- and in many cases, marginal -- as evidenced by the numerous butt logs that were hollow and left in the woods.

Then to further erode timber quality, oak decline moved in. This complex of insects and diseases really loves over-mature, stressed trees growing on thin and infertile soil. The Wurdack woods were guilty on all counts!

So, when it came my turn to conduct a timber sale, I got nervous. From the forest inventory I knew I was dealing with a marginal commercial timber resource. Further, since this was my first commercial sale upon returning to Missouri, I was unfamiliar with the timber markets in the region. So, I did what any responsible forest landowner should do in my situation... hire a professional forester.

The consulting forester marked and tallied all the harvestable trees according to the management plan. The sale inventory contained 1,418 trees predominantly in the 14"-24" diameter class. The volume breakdown by species was: 56,500 bd ft of black oak; 7,000 bd ft of red oak; 106,250 bd ft of white oak; 45,500 bd ft of post oak and 7,500 bd ft of hickory and misc species.

Despite advertising the sale twice in regional papers and sending out bid solicitations to over 30 loggers, only three individuals came out to inspect the timber. On the day of the bid opening we had only one bid!

Despite having only one bid, that was better than back in 1999 when no bids were received for the same timber. At least that is what we thought until we opened the bid. We were shocked; more like stunned. The bid on our estimated volume was a little more than $0.05 per bd ft. That was about one-half to one-third what we thought the timber should bring.

Our first reaction was to reject it! After all, we stated in the bid solicitation our right "to reject any and all bids". All that wood had to be worth more than pennies on the dollar.

Non-merchantable timber
Approximately 25% of the marked timber was non-merchantable due to past fire damage, oak decline and general neglect.
But fortunately, reality set in. Our unmanaged woods had all the signs of neglect: dead and dying red oaks everywhere, hollow centers on the white oaks (as evidenced by the hollow butt logs in the previous harvest on the adjacent tract), and the generally slow growth rates due to too many trees on the landscape. Neglected woods on poor sites in this part of the Ozarks are a real marketing challenge.

So, rather than view it as a busted timber sale, we chose to view it as a timber stand improvement that instead of costing us money to carry out actually generated some income. You know, the glass being half-full point of view.

My next step was to contact the logger with the winning (and only) bid. He could sense the dread in my voice of having the all or nothing option. But, he did what I was about to ask him and that greatly increased my comfort level. He gave me references. Each reference confirmed he was a skilled and reputable logger. With that, we agreed to the terms of a contract.

To date, 152,000 bd ft of timber (International Scale) has been harvested and it is estimated that the harvest is 90% complete. So, we anticipate a final harvest of 167,000 bd ft. That is about 75% of our original volume estimate. But, upon looking over the large number of hollow butt logs at the landings, I would say we are definitely in the ballpark of the original inventory.

Approximately 75% of the merchantable timber went into low-grade blocking and pallet material.
As for quality, it is breaking out pretty much as the logger suspected it would: 114,500 bd ft in blocking and pallets; 16,000 bd ft in ties; 9,700 bd ft in white oak staves; and 11,500 bd ft in grade lumber.

In summary, marketing marginal timber is a difficult task; one that might not meet original expectations. But, even in situations like this you need a professional forester to help you know what you have to sell in the first place and to give you sound advice when emotions run high. Finally, whether you have one bidder or ten, you can and should ask for references to ensure a quality harvest that you can live with.


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