New England Forestry Consultants, Inc.
|Volume 2, No. 2
The Timber Harvest - Does a Consulting Forester Make a Difference?
As many landowners already know, the advantages of a consulting forester assisted timber harvest are numerous and far outweigh the cost of the assistance. However, there are also many landowners who cannot fathom the idea of paying a forester to assist them when they can sell their timber directly to a local logger or mill. Obviously I have a bias, but I am quite confident that the involvement of a consulting forester with the harvesting of timber provides numerous advantages to the landowner. These advantages include higher stumpage prices, enhanced long-term productivity, additional services, and "peace of mind."
In most circumstances, a consulting forester assisted timber harvest will yield a greater net return to the landowner than a non-consultant harvest. A study published in the winter 1995 edition of The Consultant stated the following: "The average price per acre... for consultant sales was $934.46 in contrast to an average per acre of $525.90 for non-consultant sales, a difference of $408.56 per acre. Per acre prices for consultant sales were 78 percent greater than non-consultant sales." Taking into account that the consultant assisted sales had greater volumes and better quality wood (probably a by-product of a history of long term consultant assisted timber management), the final difference in the per acre price was $152.83 dollars or 29 percent. This greater return is significantly more than the cost of the assistance provided by the forester.
Time is Money
The reasons for the higher return of the forester assisted timber harvest are many but can be summarized with the concept that the forester adds value tot he wood being sold. The assisted sale relieves the buyer of a number of responsibilities. The timber to be cut is designated by the forester, the harvest area is identified, boundary issues have already been resolved, landing locations have been designated, in many instances skid trails have been assigned, and the buyer does not have to deal with the landowner. The timber buyer simply needs to show up and cut the wood. Forestry services reduce the amount of time required by the timber buyer to acquire the wood, which is directly associated with the cost of doing business by the timber buyer. Time is money because the cost of doing business is reduced, more money can be designated to the timber.
Unacceptable growing stock being removed.
Information is Power
The second reason that assisted sales generate higher stumpage prices is that the forester is familiar with all of the potential buyers and their respective circumstances. The forester understands the current market and can solicit prices from the buyers paying the highest price at that time. The Consultant articles states: "A consultant who knows the high price buyers in the sale area and aggressively solicits bids from them will capture additional price increases for his client. It's reasonable to argue that any such consultant would take credit for directly increasing timber revenues and also for capturing the premium paid by high price buyers." Market information is a powerful tool.
Enhanced Long Term Productivity
In most cases the purpose of a timber harvest is not to just "cash out," but to also manage the forest to allow for harvesting over the long term. In order for this long term management to occur, the low quality immature trees must not be harvest, and the unacceptable growing stock (trees that will never become quality sawlogs) must be removed.
High Grading Hurts Landowners
Sugar maple and oak at 14 and 16 inches diameter at breast height is always in high demand by sawmills. "They will buy that up as fast as it's produced," states Dave Kent, Keene Center Manager in a 1998Farming article. "But if a landowner is not financially strapped, he'd be crazy to sell it. The productivity of the site can be degraded by taking those trees out," says Kent. Those trees will be worth significantly more money if they are allowed to mature.
The Removal of unacceptable growing stock has always been an issue associated with timber harvesting. It's an issue primarily because there is no money in it. Very few loggers can make a living cutting unacceptable growing stock, and over the years this situation has resulted in the high grading (taking the best and leaving the rest) of various timber stands. "I am very sympathetic to the loggers concerning the removal of the unacceptable growing stock," states Tony Lamberton, Manchester Center Manager. "However, this is simply the nature of the business. I explain to the cutter that my client has long term objectives for this land, and that the only way to achieve these objectives is to remove the unacceptable growing stock. I tell them that they have to take the tail if they want the hide, and this issue is not negotiable."
You Get What You Pay For ... And Then Some
Setting up a timber harvest is a complex process. Property lines must be located, harvest areas must be designated, appropriate stream crossings must be determined, occasional coordination with abutting landowners and government agencies needs to occur, timber sale contracts protecting the interest of the landowner must be produced, and (of course) the appropriate trees must be designated for harvest. Almost all of these services will be incorporated in the consulting foresters fee to administer the timber harvest.
Peace of Mind
Peace of mind to the landowner is probably the least considered, yet most valuable aspect of a consultant assisted timber harvest. When a landowner is assisted by a consulting forester, he/she will have the comfort of knowing that his/her interests are being protected.
Ninety percent of the timber buyers/loggers I know are good, honest people. However, they have an inherent conflict of interest with a landowner. The timber buyer's objective is, and should be, to buy the landowner's timber for the lowest amount and sell it for the greatest profit. There is nothing dishonest about this concept and is the very premise of a successful business. The role of the NEFCo foresters is to level the playing field for the landowner. NEFCo foresters do this by utilizing their market knowledge to get the owner the best possible price. NEFCo foresters also ensure that the quality of the harvest operation in the woods is not compromised during the timber harvest. Combine these two factors with the foresters initial input of proper tree selection to maximize future timber values, and it becomes very clear that the forester adds tremendous present and future value for the owner.
Does A Consulting Forester Make A Difference?
The advantages of a consulting forester assisted timber harvest as opposed to a non-assisted timber harvest are numerous. Studies indicate that assisted timber harvests will net the landowner more revenue, and the additional generated revenue will be greater than the cost of the forester's assistance. While the revenue generated by the assisted timber harvest is significant, there are additional benefits as well. Maintaining and/or enhancing the productivity of a harvested area is vital for continued long term forest management. The complexity of setting up a timber harvest and insuring details such as boundary line locations and stream crossings are part of the consulting foresters role - to protect the landowner from potential problems. Finally, the knowledge that a forester is looking after your interests is an additional value which can not be assigned a monetary limit.