Believing in Professional Forestry
Professional forest management services bring greater benefits to landowners than would otherwise be achieved. However, some folks don’t believe consulting foresters are worth paying. They simply do not want to part with a commission when they could sell their timber themselves and save what they consider to be an unnecessary fee. Landowners who do hire consulting foresters would tell a different story.
Over the past 22 years, I believe that every one of our clients received more net income for their sawtimber than they would have received without us (with the exceptions of a few small salvage sales). Over the years we’ve had several occasions when our help resulted in our clients receiving +100% more money than they were offered before coming to us. This has been due to following specific steps of gathering the pertinent information and presenting it in a manner that is understandable to clients and buyers, generating competitive market forces, and following through on our word. We have developed an understanding of the timber markets and a reputation for reliability. This translates to even greater benefits for our clients. We have confidence in the benefits our services provide.
In order for a landowner to receive the best price for selling timber, all the elements and necessary steps for successful marketing must be taken. If one takes only six out of seven steps, the process is flawed and the results reflect the error. The steps aren’t detailed here. However, studies have consistently shown that forest landowners receive an average of 20% more for their timber using consulting foresters than they do when using the free services offered by forest industry, extension, and state foresters. There is an even greater disparity when landowners conduct their own sales.
There are other benefits to using professional forestry services than purely financial reasons. Consulting foresters will ensure a proper timber harvesting contract protects the interests of his client. He will work with the logging contractor and client to make sure everyone has a clear understanding of the expectations of both parties. If problems arise during the harvest, he can most likely resolve the problems. Every decision made affects biological energies. The first truth of the forest is that “everything is related to everything.” Professional forest management controls disturbances in the forest and directs the focus of nature’s energies to desired processes and outcomes. Landowners automatically receive benefits from professional foresters through the understanding and respect foresters give to the biological processes occurring in the forest.
A friend of mine recently sold his timber and decided to do it himself without a forester’s assistance. It was a surprise to me that he would do that when I had advised him beforehand that he would be better off getting help from me or another consulting forester (I had mentioned a mutual friend who is a well respected consulting forester). He believes he got a good price because he got four lump sum bids (even though he didn’t have any idea of how much timber he sold) and saved paying a consulting forester’s fee.
When he told me about this, I could feel my face flush hot with anger while thinking that he didn’t respect what I could have done for him. I then felt sad and vaguely guilty, somehow responsible for failing to communicate the benefits he would derive from using professional help. Finally, I got to a place of forgiveness for both him and myself. He only did what he felt was in his best interest. He was motivated more by fear of losing money rather than trusting the benefits of professional assistance. He just didn’t believe I could make a difference for him.
One cannot change the beliefs of another, and for the most part it is a waste of energy to try. The world shows us a reflection of what we already believe. I believe God works through the universe to bring us opportunities to learn our lessons. We learn our lessons only when we are ready.
I am grateful to each client with whom I’ve ever had a relationship and for those yet to come. Each of you helps me on my journey through life. I hope that as I join with you in the intent to maximize your benefits from forest management, the blessings from our professional relationship extend and multiply from the truth that everything is related to everything.
The markets for timber are unstructured. There is danger in using averages to assess the value of any specific timber without making adjustments for location, topography and soils, exterior and interior access, total timber volume, per acre timber volume, timber size, quality, distance to markets, and the degree of market competition. As a landowner, specific information is your friend. Relying on good luck in selling timber is like trying to walk through a minefield without a map. The objective of this portion of our newsletter is simply to give you our perception of the changes occurring in the markets for timber.
This past winter brought more normal rainfall patterns to Louisiana after three years of drought. Even so, most mills weren’t too concerned over yard inventories having the past three years of relatively unrestricted flow of timber from the woods to the mills. During the year of 2000, prices for pine lumber and panels steadily decreased even though housing starts remained strong. Prices for timber only modestly decreased throughout 2000. The prices of finished products reflect an over-supply of lumber and panel production for our domestic markets. Combine our high domestic production with the lumber imports from Canada and we end up with low lumber prices and ultimately low stumpage prices.
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 Commerce Department is still sorting out what to do about the countervailing duty that expired April 30, 2001 on Canadian lumber imports into the U.S. At the moment, they have decided that there is reason to suspect that Canada has an unfair advantage for importing lumber, but nothing is currently in place and they are still studying the matter. That fact has kept domestic firms uncertain and fearful of the future, and has had a downward effect on timber prices. I believe that the Commerce Department will probably reinstate some sort of duty on Canadian lumber, although it will most likely not fully reflect their advantage. The Canadians are our friends and we have many common interests so we’ll probably let them off fairly easily.
We don’t export much in the way of logs or lumber. The high U.S. dollar makes it difficult for foreign countries to buy our products. Over-production of lumber and panels means we will probably see a few more mill closures throughout the South this year. You can see from the graph above that lumber, panels and pine sawtimber stumpage prices are all at or near four year lows. We did see a rebound on lumber and panel prices during the second quarter of this year. However, that rally has subsided and prices for lumber and panels have fallen back close to their previous levels. The major factors affecting the prices of these products are not expected to improve in the foreseeable future.
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
During the last six quarters, our clients received an estimated average of just over 23% more for pine sawtimber than the average stumpage rates reported by the Louisiana Department of Agriculture and Forestry for the state.
The average stumpage prices shown above are a barometer showing general trends of the timber markets in Louisiana. They have no applicability to your specific timber without applying adjustments for the characteristics enumerated in the second sentence of this article. The key to getting the best price for your timber is getting professional help from a qualified consulting forester who has no conflict of interest.
Using High Tech Forestry Tools
Science and technology in all fields of endeavor are progressing so fast that it is difficult for even the most devoted practitioners to stay at the leading edge of their fields. We have made a constant commitment to bring first class professional forest management services to our clients throughout our history as evidenced by our numerous certificates of continuing education and diverse certifications, registrations, and licenses. About two years ago, we bought a software program ArcView. This program is a Geographical Information System (GIS). This program has helped us make pretty maps that are more accurate than the hand drawn maps we made in the past. We can view and display layers of information, such as topographic maps, aerial photos, soils, timber stand maps, roads, etc. However, the program’s capabilities extend far beyond mapping. It has the capabilities for storing and analyzing tabular data connected with a point or area and displaying that data and the results of the analyses visually. We have built a database system using this program that is being used for displaying a variety of timber stand characteristics for our clients who have large and complex holdings. We can ask questions (query the data) and locate specific areas based on a variety of characteristics. This helps us to identify specific areas having forest management opportunities, track timber stand and forest wide changes over time, keep records of treatments, income and costs. This program is complex and requires a constant commitment to keep it updated and moving forward. We find this tool fascinating to use and are further developing our skills on an on-going basis.
Another high tech tool we are using is a Global Positioning System (GPS). We use this unit in the field to measure acreage of timber stands, streamside management zones, location of roads, improvements, etc. This unit receives signals from satellites to pinpoint our position on the earth. We are using this system for determining acreage for management treatments such as site preparation or herbicide treatments. Exacting acreage determinations save our clients money and result in more accurate chemical treatments of an area. We then bring the GPS data into our GIS program in order to more accurately store and monitor information.
These tools seem very high tech and cutting edge to us. However, they don’t replace common sense or knowledge of forest science or business. They are merely state-of-the-art tools that enable competent foresters to provide better services.
There are more people wanting to buy timberland than ever before.
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.
26.8 acres – Rapides Parish, Louisiana - $52,000.00
This property is in the Paradise Community with approximately 385 feet of frontage along Paradise Road. It also has a great deal of frontage along Flagon Bayou. The property supports a mixture of large pine sawtimber, oaks and beech. The property is low for the most part and although may not suitable for intensive development, would provide an excellent house site with water and electricity available along with the conveniences of living close to stores, churches and schools while having a beautiful forest surround you. Call us for a full prospectus on this property.