I recently had the honor and pleasure of participating in a meeting with a client family. The purpose of the meeting was to develop a mission statement for the management of the family forest. Before the night was through, we had input from every single person in the room. The discussion was lively at times to say the least. While not everyone agreed on everything, we did arrive at a few specific objectives that will guide the forest management of their family forest for years to come. This was one of the most satisfying and productive meetings I’ve ever had with a client.
We begin each formal forest management plan we write for clients with a statement of ownership objectives. Normally, we identify primary and secondary objectives for each client. A simple objective statement that one client chose was “I wish to maximize present and future income from timber sales as my primary objective. Secondary objectives include maintaining and enhancing general wildlife values and protection of soil and water resources.”
The above statements have strong implications. In order to maximize present and future income for the specific client above, we analyzed his forest and found it consisted of mature loblolly and shortleaf pine species along with a light stocking of mixed hardwood sawlogs. The logical method to maximize present income is through a timber sale. Further, we needed to address the issue of maximizing future income. We know that pine plantation management is the most effective method for ensuring full stocking levels of economically desirable trees on the forest. We performed an economic analysis that resulted in defining specific steps to maximize the present net worth of the recommended pine plantation.
The secondary objectives of maintaining and enhancing general wildlife values plus protection of soil and water resources implied that choices must be made. Resources are limited and forest management is the key to improving specific benefits. Your forester can help you to determine whether your objectives are attainable and may be able to help you identify any inconsistencies or trade-offs that are necessary in order to achieve them.
Wildlife values are affected through habitat manipulation. In order to promote wildlife diversity and to protect soil and water resources, we designated a streamside management zone on the forest where hardwoods were the predominate species. We left an undisturbed area along the creek, approximately 100’ wide on each side of the creek, during the timber sale. This area comprised about 12% of the property. In addition, water bars were placed on the woods roads after the logging operation to help stabilize the soil on the roads. The logging sets were seeded with grass and a wildlife mixture in order to provide cover for the soil and to provide some dessert for wildlife.
This process of considering forest ownership objectives and developing a statement of purpose is a profound one that I encourage each of you to undertake in a thoughtful manner. The conscious effort to think about your forest and what it means to you will raise your level of awareness and appreciation for your forest. As you think about it, talk it over with your spouse, family or others involved. The idea is to develop a vision of the future. This will give a sense of purpose to management and will provide long-term direction for your forest. Sharing that vision with all owners and with your forester will encourage a sense of commitment to that direction. This will focus the attention of management in a more purposeful and intentional manner.
It is interesting how the markets for timber differ from one part of the state to another. The price for timber has as much to do with market forces as they do with timber characteristics. The market forces in one area may be stable for a time, and then may change rapidly due to a wide variety of factors. Therefore, the best I can do in my newsletters is to give you the overall picture. Remember that the market factors for your timber are specific to space and time.
We’ve had the good fortune to maximize income for our clients these past few months as timber markets rose moderately this past winter and spring from the levels seen last fall. Most mills had plenty of logs as the weather was dry during the late fall and winter. However, the strong economy has provided stable domestic markets for lumber, plywood and panels. On the other hand, our exports are rather puny. As Asian markets have improved, the U.S. lost ground to Canadian and Russian exports of lumber and logs to Japan. Canadian lumber also is pouring into the U.S. and this trend seems likely to continue for the time being.
Stumpage prices for pine sawtimber have been moderately good and are basically in line with an upwards long-term trend. We’ve seen individual sales of generally good timber to run from $375 - $500/MBF, Doyle Log Rule in the past three months. We are seeing greater distinctions in prices for timber based on size, quantity, quality and other characteristics than we’ve seen in the past. This is indicative of greater market sophistication and competition, which may be a more pronounced trend in the South.
We expect another dry summer for the South and are blaming the winds from El Nino as the cause. We expect that prices for pine sawtimber will be rather flat this summer. High production will keep prices from rising.
Pine pulpwood prices have eased lower and haulers are on strict quotas. We believe prices for pulpwood are unlikely to rise in the foreseeable future. The high amount of pine plantations that need thinning is saturating the market with wood. Pulpwood mills are getting as much wood as they need from their own land and don’t need to purchase much outside wood.
Don’t expect any new pulpwood mills to be built because of environmental concerns. We’ll probably see existing mills periodically increase production, but no new pulp mills. We do believe that the state could support another large OSB mill. This kind of mill would use pulpwood-sized trees to make panels. There certainly appears to be plenty of resource available to support a mill of this type.
Landowners should consider income from pulpwood thinnings to be as a commodity. We suggest that it is more important to do thinnings to increase growth of the residual stand than it is to maximize income from the thinnings. Delaying thinnings in hopes of getting high prices for pulpwood is unwise, in our opinion. We believe profits for private landowners are made in selling sawtimber.
The supply of sawtimber in the state declining and will remain that way during the next ten to twelve years. We believe that there is a good chance that pine sawtimber prices will peak in three to four years and then remain at high levels for another three or four years.
A comparison of the average quarterly lumber, panel, and pine sawtimber stumpage prices for the last four years appears below:
* Compiled by Templin Forestry from Random Lengths
** Templin Forestry
The markets for timber change quickly. The information we give you on stumpage rates are like giving you the quarterly mean temperature, you don’t see the highs or lows that change every day. The information does show trends but is not applicable to a specific tract of timber at a specific time. For that you need to consult your forest advisor.
The average timber prices our clients received as compared to the reported averages in Louisiana for the last year and a half are shown below:
*
Published by the Louisiana Office of Forestry
To the unwary, a board foot is a board foot. A board foot is defined as a 12” x 12” x 1” board.
We use the Doyle Log Rule in Louisiana and in surrounding states for
estimating the board foot volume in trees.
The Doyle Log Rule underestimates the number of board feet in smaller
trees and overestimates the volume of large trees.
This has a tendency to even out the stumpage price of timber over a
variety of sizes. A stand of trees averaging 13 inches in diameter could bring
the same price per board foot as timber averaging 18 inches in diameter using
the Doyle equation. This gives the
illusion that a board foot is a board foot, no matter what the size of the trees
being sold. In reality, nothing
could be further from the truth.
Generally speaking, higher value products can be made from larger
trees. The wholesale price of #2 2x6 of Westside southern pine lumber averaged
$415/MBF in 1999. The wholesale
price of #2 2x10 averaged $479/MBF.
You can make more 2x10 lumber out of a larger tree than you can a small
one.
The actual cubic foot volume of trees is the most accurate measure of
volume we have for trees. There are
more cubic feet per board feet in smaller trees than in larger trees.
Most often, the cubic foot volume is then converted into weight, or tons.
Weight is becoming the industry standard for measuring most kinds of
timber. Log trucks are weighed on
the way into the mill and then weighed on the way out.
The difference is the amount of timber delivered.
Cubic feet, tons, board feet, and cords are all units of measuring
timber. It can be confusing and as
I always seem to preach: have a
professional forester you trust help you. We
always show both the estimated number of board feet and tons (along with the
other units mentioned above) in all our timber estimating work.
This gives everyone the kind of information they need to make better
decisions.
Celia Jones, wife extraordinaire, has opened Gibsland Garden & Gift in beautiful downtown Gibsland. Besides the normal garden and gift items, she also stocks a number of forestry and hardware items. Stop by on your way through Gibsland and see what all she has there.
There is an excellent organization that specializes in promoting the restoration and management of longleaf pine throughout the Southern United States. This group is based out of Auburn University and is probably the best source of information for foresters and landowners interested in longleaf pine management. Their conference will be held October 16-18, 2000 in Alexandria, Louisiana. Call Sue Grace at (337) 266-8618 for more information.
There are more people wanting to buy timberland than ever before. We have an excellent recreational piece of property for sale right now. We sold eight properties since our last newsletter and anticipate having more listings of land this summer. Be sure to check our WebPages at http://www.templinforestry.com and click on Real Estate to see information on our most current listings.
Marketing strategies have never been more important for getting top dollar for your property. If you are a buyer or seller, be sure to contact us.
405 acres of land in Catahoula Parish, Louisiana. This tract has one mile of highway frontage on La 124 and ½ mile of frontage along the west bank of Black River. This tract should provide excellent deer and duck hunting experiences for the buyer. Some of the land is open and some timbered. The tract is located approximately 18 miles south of Jonesville. $650 per acre. Call for a prospectus on this property.
We bring buyers and sellers together. Be sure to call us if you have an inclination in either direction.