University of Maryland Extension

Stewardship Planning - Harvesting

 Timber harvesting

Marketing Forest Products: Making It Happen

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 common questions and misconceptions of forest landowners:

"Leaving my woodlands alone is the best for wildlife and tree growth."  FALSE. Not necessarily...

Leaving your woodlands alone may not produce optimal wildlife habitat. Most forms of wildlife require varied types and ages of vegetation for food and shelter. In an unmanaged forest, overcrowding often retards tree growth, makes forests more susceptible to disease and insect damage, and reduces the diversity of wildlife habitats. Selective thinning provides more growing space and nutrients for desirable trees, which, in turn, reduces the stress and improves forest health. Other management techniques can be used to create needed wildlife habitat diversity. Why harvest forest products? The planting and harvest of trees is not only a way to receive some income from your property, but is also a major opportunity to improve wildlife habitat, access for recreation, and other forest benefits. However, this requires careful planning and objectives.

"Managing my woodlands takes a lot of money and time." FALSE.

Improving your woodlands can actually increase your income while maintaining the environmental integrity of the landscape. Careful selection of your firewood or timber can increase the value of your woodland for wildlife, timber resources, recreation and other forest benefits, while providing income. These harvest assets can be used to build roads, improve wildlife habitats, or implement other practices that would not be otherwise affordable. Improving your woodlands does not need to take much of your time either. State foresters and wildlife biologists, as well as private consulting foresters, are available to help you develop and implement a forest stewardship plan. These professionals can assist you in enlisting the services of reputable logging operators to implement the plan. In this way, you can achieve your financial goals and enhance your woodlands.

"Careful management is a good idea, but my woodlands are too small." FALSE.

Woodland areas of any size can be managed to improve wildlife habitat and tree growth. Through careful management, even small parcels of land can be maintained as scenic areas and also provide favorable conditions for wildlife. In many cases, owners of adjacent property can work together to improve management and reach shared goals.

 

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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.

 

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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.

 

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Common concerns about timber harvesting expressed by landowners

"It is unsightly." This can be minimized by having a sales contract that requires tree tops be cut close to the ground and using firewood or pulp markets to clean up slash left from the harvest of larger trees.

"The forest is damaged forever." Using a licensed consultant forester to administer the sale and market the trees will usually take care of this problem. Avoid harvesting methods such as diameter-limit cutting that cut trees based on diameter rather than their individual attributes.

"The trees left will be damaged." Again, a licensed consultant forester will work with the logging contractor to deal with this problem.

"The roads will be ruined." During the harvest process roads and log landings can be rutted and muddy, but most consultant foresters will require a performance bond from the logging contractor that is returned only after all the road are properly graded and seeded. Forestry Best Management Practices apply as well that all logging contractors must follow.

 

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Forest Harvest Perception

Many landowners are sold a vision by some buyers where just a few trees are removed. Unfortunately, poor harvesting choices result in a forest that loses wildlife and other forest values for generations. The use of diameter-limit cutting where trees over a certain diameter are cut fails to select trees on their individual attributes.

 

 

Principles for Marketing Forest Products

  • Harvesting should be part of a written forest stewardship plan.
  • A successful timber harvest should include three people: the landowner, the professional forester, and the logger.
  • Get payment in full before any trees are cut.
  • Get all agreements in writing. No handshakes!

 

 

Methods of Marketing Forest Products

  • Direct Marketing - Selling directly to a logging contractor.
  • 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.

 

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Types of Foresters

Maryland is one of the few states in this region that requires licensing to be considered a Maryland Professional Forester. The forester has a number and stamp. To be licensed the forester must have a 4-year forestry degree, experience, and acquire 8 continuing education credits every two years.

Public Forester

County-based forester who work for the state. They develop forest stewardship plans but will not handle commercial timber sales.

Consultant Forester

An Independent forester hired by you, who works as your agent to represent your interests and who works on commission or fee basis. The Consultant forester offers a broad range of services related to marketing timber, developing forest stewardship plans, and other services. Since this person represents your interests and is paid on commission, it is important that you feel comfortable with his or her decisions on your behalf. Interview a few consultants or get references from other forest landowners before you make a decision.

Industrial Forester

Forester who works for a particular mill and represents the interests of that mill.

The University of Maryland Extension Forest Stewardship Education has a fact sheet that lists Foresters who will work with small-acreage landowners. Click here.

 

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Benefits of Using A Professional Consultant Forester

  • Better Job Environmentally - A contract is used to assure protection of the resources. The forester checks regularly on the harvesting to protect your interests.
  • Individual Trees are Marked - Trees in the sale area are marked and tallied by type, size and product. This is the basis of the bid notice sent to potential buyers in the area. You know what will be cut before the harvest and you can better visualize what it will look like.
  • More Income - Stumpage is sold on a competitive bid process. Sealed bids are solicited by interested buyers and you and the consultant forester can select the one you want. The offers for the same trees will vary widely depending on the timber markets in the area and the needs of different buyers.

 

 

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.

 

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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.

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.

 

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Common Mistakes Made By Landowners

Harvesting timber too small or waiting too long. By having a forest stewardship plan prior to any harvesting decision, you can know what the opportunities are and the impact of those decisions.

 

 

What to Avoid

Diameter Limit Cutting

This means trees are cut based on size, not on their ability to grow after harvesting. This type of harvest will usually limit the health and productivity of the next forest.

Selling Timber with No Contract

If you have no contract, your interests are not protected.

Being Paid as the Timber is Cut

Use lump-sum sales where you get all your money up front, and an acceptable contract, before any timber is cut.

Erosion and Sediment Control Problems

The landowner has final responsibility. Violations can result in stiff fines.

 

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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.

A list of licensed professional foresters is available on the web or by calling your state forester or Maryland Department of Natural Resources Forest Service at 410-260-8531. Those in Delaware can call the Delaware Forest Service at 302-739-4811. For more information write or call the 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 also provides a stumpage price report that is available online and would be of value to counties that border Pennsylvania.

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