The harvest of timber is something that most landowners only do once or twice in a lifetime. Whether or not the experience is a positive one will depend upon whether or not you use professional forestry assistance. Below are some best practices to keep in mind when considering a timber harvest.
"U.S. Forestry: Luke Paper Mill and Woodlands Site" by World Resources is licensed under CC BY-NC-SA 2.0
Why Harvest Forest Products?
* Natural events such as damage by gypsy moth, storm damage, and other factors provide an opportunity to harvest forest products and receive some revenue that would otherwise be lost.
* The thinning of a forest that is crowded will allow the remaining trees to grow faster in diameter.
* Some forest types such Virginia pine are short-lived and will decline if not harvested.
*Harvests can create needed types of wildlife habitat on the property.
* Harvesting can provide income for special life needs such as a child's education, retirement, start of a business or other needs.
Common Timber Sale Terms
- Board Foot - Lumber cut from logs that is 12" x 12" x 1".
- Thousand Board Feet (MBF) - The unit of volume used in timber sales and inventory work.
- DBH - Diameter at breast height which is 4.5 feet off the ground.
- Stump diameter - This is the diameter at about 6 inches from the ground. A stump diameter of 14 inches would be equal to about 12 inches DBH.
- Stumpage Value - Value of the timber uncut "on the stump." Price the landowner receives.
- Highgrading - A poor forestry practice where the best trees are removed and the poorer quality ones are left.
- Diameter limit cutting - A poor forestry practice where all trees above a certain diameter are cut and the smaller ones are left. The rationale is that the smaller trees will make up the new forest, but these trees are usually the same age as the ones that were cut and grow poorly after harvest. Trees to harvest should be selected on their individual characteristics.
Principles for Marketing Forest Products
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Harvesting should be part of a written forest stewardship plan.
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A successful timber harvest should include three people: the landowner, the professional forester, and the logger.
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Get payment in full before any trees are cut.
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Get all agreements in writing. No handshakes!
Methods of Marketing Forest Products
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Direct Marketing - Selling directly to a logging contractor.
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Indirect Marketing - A consultant forester acts as your agent in the sale. Most landowners lack the knowledge or experience to market their timber, administer the sale, deal with loggers, and handle the many permit issues.
Sale Methods
The method of sale can affect how the forest is harvested. Remember get all agreements in writing - no handshakes. Most timber sale contracts allow the buyer 1-2 years to harvest the timber. There are tax implications depending on the type of sale. The landowner should check with a timber tax accountant or the forester regarding this issue.
Lump Sum Sale
The logger and owner agree on price for total sale, based on marked timber volume and value. The owner gets money before timber is cut. In many cases, a portion of the agreed upon price is paid at the time of the contract signing, and the remainder at the time of the start of the harvest.
Sell by Unit
Buyer offers a price per unit - so much per thousand board feet - measured at the landing or mill. This requires a trust that the logger will take all wood to the mill.
Percentage Basis
Provides seller with 30 - 60% of the profit from sale to the mill. Least desirable.
The Timber Sale Process
Develop a forest stewardship plan.
From landowner references and personal interviews, select a consultant forester who represents your interests.
Get a contract or a letter of agreement from the consultant.
A written agreement will help avoid misunderstandings and make clear what is expected. Each agreement should fit the landowner's needs and be mutually acceptable. Some of the things to consider in your contract with a consulting forester:
- Location and description of the property
- Description of services to be performed
- Time frame in which services are to be performed
- Form in which the information, advice and reports will be provided
- Ownership of data such as timber inventory, survey notes, computations and analyses
- Responsibility for determining and marking property or project boundaries
- Assurances that the forester (or the company) will meet all legal requirements for the work to be performed and that workmen's compensation, liability protection, and other labor and safety laws are met for persons working on your property
- Contract performance and quality standards, including penalties for failure to meet contract specifications. In the case of timber harvests, include the frequency of inspections or other supervisory duties
- Amount you agree to pay (typically agree to 10-15% commission on gross timber revenues) and the schedule for payment.
Consultant will mark and tally trees to be harvested.
Solicit bids from potential buyers.
Select logger, develop contract, and preferably get money before harvesting takes place.
Maryland/Delaware Master Logger Program
The Maryland-Delaware Master Logger Program is a voluntary training and education program for loggers who work in Maryland and Delaware. The program helps loggers meet the ever-increasing demands of the logging profession. The courses provide information about current environmental regulations, forestry principles, and safe work practices.
If you are planning to sell timber, you will need a timber sale contract between yourself and the timber buyer. Cornell University provides a sample timber contract you may want to consider. The contract should cover the terms of the harvest, including:
- Location of the timber being sold
- Time period in which cutting can be done and when the contract expires
- Species and volume of timber being sold
- Purchase price and payment procedures
- Utilization requirements such as stump height, log lengths, cutting to a minimum top diameter
- How cut products will be measured if the sale is not based on a lump sum payment
- Damages to be paid for improper cutting or damage to property
- Performance bonds or escrow accounts, if any
- Type or size of equipment to be used and how cut products will be moved out of the woods
- Location of logging roads, skid trails and log landing areas
- Erosion control precautions or site restoration requirements Riparian area or stream crossing concerns
- Weather related limitations
- Disposal of solid waste, trash, waste oil or other debris generated by the logger
- Disposal or reduction of logging slash (limbs and tree tops)
- Compliance with cutting notice laws or other logging ordinances
- Supervision of the sale, including authority to halt logging if contract provisions are being violated
- Liability and Worker's Compensation insurance
- Final inspection to assure contract compliance
- Other issues of concern to the buyer or seller
Consultant administers sale by working with logger.
Final site inspection and return of performance deposit.
Where to get help
* The sale of timber products should include three people: 1) the forest landowner selling the timber; 2) a licensed professional forester to assist the landowner in determining which trees should be harvested and working with the logger; and 3) the logger who carries out the actual harvesting of the trees.
* The Maryland Department of Natural Resources Forest Service's "Online Forester" website includes ways to find Forest Product Operators and Licensed Tree Experts in Maryland.
* A list of licensed professional foresters is available here.
* Call your state forester or Maryland Department of Natural Resources Forest Service at 410-260-8531
* In Delaware, call the Delaware Forest Service at 302-739-4811.
* For more information write or call the University of Maryland Extension's Wye Research and Education Center, P.O. Box 169, Queenstown, MD 21658 / 410-827-8056 or Western Maryland Research and Education Center, 18330 Keedysville Road, Keedysville, MD 21756 / 301-432-2767.
* Penn State Cooperative Extension provides a stumpage price report that would assist property owners in counties that border Pennsylvania. Visit our Timber Market Resources page for more information.