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What is typical in a timber sales contract?

Started by KYGirl, January 02, 2018, 08:45:09 PM

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KYGirl

Hello all-

I can safely say I know nothing about timber or timber sales. My grandmother is interested in selling the timber on her land in a rural area here in Kentucky. She was approached by a timberer who offered her the following contract:
-a select cut of land that she outlines
-33% of sales of saw logs
-50% of veneer logs
-tickets from timber buyers and saw mills will be provided with a check paying her weekly

Does this sound fair and customary? It also states that land will be put back to master logger requirements.

WDH

I would not sell it without getting the timber appraised so that you know what it is worth.  You will need a Forester with knowledge of the local markets to do this.  It is good business to always know what something is worth when you are ready to sell it.  Especially timber as most people do not understand how to value timber. 
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thecfarm

There is pobably a big dollar amount being waved around. Spend a little bit of that amount and you could make it even a bigger amount. There are some that will lowball.
And welcome to the forum.
It took years to grow that forest. It takes time to figure out what it's worth.
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Magicman

The Forester would mark and scale each tree that would be removed.  You would then have an accurate estimate of how much timber would be removed as well as the income.  Yes, you would owe a % to the Forester for his professional services, but it would assure you that your woodlot was properly managed.

And Welcome to the Forestry Forum, KYGirl.
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Southside

No matter who you hire, Forester, Logger, etc, do your homework and check them out. Ask for references, visit other jobs they have completed, talk with those landowners, and don't just speak with the people you are directed to. Around here we file a simple form when beginning a logging operation, this is filed with the Forestry Department and is publicly available, so if it's similar there you could possibly view a logger at a current operation so that you can get an idea of how things look, operate, etc.

Just like any other business there are good and bad out there, in addition some fit better than others with certain landowners. Just be sure to ask every question that you have before signing any paperwork. 

Welcome to the Forum, there are many members here who have years of experience and are willing to help you, just ask.
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Claybraker

My siblings and  I signed a timber sales contract last month. We used a Forester we dealt with in the past, he put it out for bid and we received 7 qualified bids.  I really like the idea of getting multiple bids.  If it takes a little longer to get the money, don't get frustrated, because your grandmother will probably make more $$ at the end of the process.  Trees keep just fine on the stump.

TKehl

How many acres are we talking about? 

Do you have an idea of what tree species are there?
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East ky logging

That's about the average going rate that's paid here in east ky. But a lot of that price depends on size of the place,terrain,road access,species and quality of the timber.
They who can give up essential liberty to obtain a little temporary safety deserve neither liberty or safety- Benjamin Franklin

timberking

What everyone has already said.  Educate yourself about the market, bring in a forester and don't get pressured into making a snap decision.  Not a crop of corn that has to come down today.  Good luck!

KYGirl

Thank you all for the warm welcome and your responses. It's 80 acres, give or take. I'm not sure how much she wants timbered at this time. She has some white oak and walnut--the other I'm not sure. She has contacted a few foresters in the past with mixed results. Most did not respond to calls, one said she should find someone more familiar with the local market (he was 90 minutes away??), and one told her that he would be happy to tag the timber, but that he didn't have much luck with sealed bids in our area.

East KY Logging--do you know of any foresters in the area? She's very near Magoffin Co.

East ky logging

No. Sorry but I have never dealt with a forester since I've been logging. I just have known of one local job on private land that was handled by a forester. You might be able to check out U.K. Forestry department or someone from the Ky department of forestry. 
They who can give up essential liberty to obtain a little temporary safety deserve neither liberty or safety- Benjamin Franklin

square1

Quote from: KYGirl on January 03, 2018, 10:09:09 AM
Thank you all for the warm welcome and your responses. It's 80 acres, give or take. I'm not sure how much she wants timbered at this time. She has some white oak and walnut--the other I'm not sure. She has contacted a few foresters in the past with mixed results. Most did not respond to calls, one said she should find someone more familiar with the local market (he was 90 minutes away??), and one told her that he would be happy to tag the timber, but that he didn't have much luck with sealed bids in our area.

East KY Logging--do you know of any foresters in the area? She's very near Magoffin Co.
A search of "forester" on this site turns up 103
https://forestryforum.com/board/index.php?action=mlist;sa=search;search=forester;fields=name,group,email;start=0
https://forestryforum.com/board/index.php?action=mlist;sa=search;search=forester;fields=name,group,email;start=100
Click on the user name and you can see where they are, how active they are here, etc...

Claybraker

Yep, see what services the State has to offer, with an eye to developing a management plan for the land. Raising a little cash is a valid objective,  and often you can increase the future earning power of the land with a well conducted harvest or screw it up for generations with a poorly conducted one.

PineNut

About 40 years ago, my sister and I had some timber to sell  in North Carolina. Several people made an offer on the timber, the highest being about $8k. We turned it over to a  forester to sell and after we paid his commission, we received $25k. It is best to let professional people handle it for you.

Ron Wenrich

The Assocation of Consulting Foresters has a directory of members.  For Kentucky, there's 18 members.  You should be able to get some guidance from there. 

https://www.acf-foresters.org/
Never under estimate the power of stupid people in large groups.

Claybraker

One thing that set my spidey senses all tingly is there's no low grade stuff, just saw logs and veneer.

starmac

Out of curiosity, exactly what does it mean that the land will be put back to master logger requirements?
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East ky logging

Being in the same general area as the logger that she was talking to I'm sure it's following the guidelines set by the Kentucky master logger program.  Pretty basic stuff like water barring the roads on slopes,removal of tree tops out of streams,sowing grass on landings, roads and stream crossings after you take the tiles out and things like that.
They who can give up essential liberty to obtain a little temporary safety deserve neither liberty or safety- Benjamin Franklin

paul case

The 33% sounds right on pallet and low grade and 50% is right on the veneer logs but we get grade saw logs and all walnut on 50% as well.

PC
life is too short to be too serious. (some idiot)
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dustyhat

I log and saw and i would never sell my sawlogs any less than 50% and they should only ask for no more than 35% of your veneer. its your timber not theres, sounds fishy, seriously.

dgdrls


Ron Wenrich

I've never been an advocate of having timber cut for shares.  There is too much dependency on the logger's skill in bucking and marketing of logs.  There is also the dependency on the logger honesty and bookkeeping ability. 

Putting it out on bids gives everyone an even footing.  The timber is marked and volume is estimated.  A good forester will be pretty close on their cruising ability and volume estimation.  Every bidder will look at the same trees.  The bid prospectus should have the volume broken down into species, with the number of trees in each diameter class, and the volume of each.  The marking should be done to encourage good management by removing low value trees.  It should also encourage regeneration.  Payment for timber is always in advance and the forester should administer the contract to assure good logging standards are met. 

Loggers should have the ability to know what sort of value they'll get out of the trees.  Loggers should be able to figure out what the yields will be by grade and attach a value to it.  I've sold timber for landowners as a consultant, and I've also been a procurement forester.  I know how it is done and know many a logger and mill owner that buy timber on this method and makes money. 
Never under estimate the power of stupid people in large groups.

paul case

I only know my experience.
Timber here in my area is marginal at best. Buying it on bids much of the time pays the owner less than what shares cutting will pay. The loggers that bid on timber here generally buy any tree that is more than 12'' dbh and only pay for the butt logs. That is their way of insuring against poor quality logs.
Most cannot tell ALL the defects inside the tree til it is cut.

That is just how they do here in my area. 20 miles from here is different.

I would say that references for a logger would be good to check out. The questions to ask the people he has cut for is Did you get paid? and Were you satisfied with their work?.

PC
life is too short to be too serious. (some idiot)
2013 LT40SHE25 and Riehl edger,  WM 94 LT40 hd E15. Cut my sawing ''teeth'' on an EZ Boardwalk
sawing oak.hickory,ERC,walnut and almost anything else that shows up.
Don't get phylosophical with me. you will loose me for sure.
pc

WV Sawmiller

Paul,

   I think that is an excellent point and it does make sense loggers might bid less if they have to pay for the tract/logs before cutting.

   I have not sold nor do I intend to sell any of my timber but if I did the thing I would be most interested in would be talking to previous customers and get their opinion of how well the logger honored his promises even if the return was more or less than originally projected and how good a job they did with clean up and protecting the owners property.

   If the logger's reputation turns out to be good you might use him on a trial basis then bring him back in a year or so for more cutting as appropriate.
Howard Green
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