Consulting foresters' choice of scale

[Brian Beauchamp]

I won't share my numbers with a forester, of anyone else for that matter. What I cut out of a tract is my business, not theirs. If I'm dealing directly with the landowner on a a pay as I cut sale I share everything with them, but no one else.

Most of the loggers around here want to cut on shares, so it's pretty transparent as long as you can confirm that they are taking the logs where they are supposed to be taking them and not shaving loads somewhere. You must do a lot of lump-sum buys when dealing with foresters there. We (a collective foresters' "we") will ask, but it is up to you to share the information in that case. It is so we know that we are not cheating the landowner or the buyers. We have to be as close as we can to the actual value or someone is losing. If we scale low, the landowner loses. If we scale high, the buyer loses and may be reluctant to do business with us again.

A lot of the volume numbers depend on your utilization. Some guys have good markets for pallet and blocking logs and push that over firewood. Some are doing real well at firewood and will run a lot of blocking into it. I've seen some outfits cut the tree off at the first limb and leave the rest, while others clean up every scrap of firewood they can get.

I agree utilization depends on how well the markets are understood, but it is also a matter of deciding how much time it is worth to you. Unfortunately in my area, the loggers have tunnel vision when it comes to the available markets here. There are only a couple that even consider taking anything 'less' than pallet material. It makes it difficult to get proper forest management implemented sometimes when utilization of certain materials reduces profitability for a logger. I completely understand that though and do not blame a logger for making a sound business decision.

If I start sharing information with a forester he may think he's underscaling the tracts and push the volumes even higher. I wish all foresters were like Ron W. and had a practical work background in the industry.

It is our job as foresters to help the landowners make decisions and market their timber to the buyers. With your input, we can do a better job for both of you. It's not a competition; it's a business interaction. I have a lot of respect for honest loggers...they do a lot of dangerous work for very modest pay and they earn every penny they get. I want them to know what they are getting as accurately and as precisely as I may provide it to them, then they have more confidence in placing their bids. If they have markets and utilization ability beyond what has been tallied, great...I expect the offers will reflect those markets.

[Frickman]

Brian,

Every sale here that a forester is involved with is a lump sum, pay before you cut sale. That includes both public and private timber. This is all high or higher quality hardwood, no softwood. Every tree over 10" dbh is scaled and marked. Some of the larger sales will be broken up into blocks and you pay a certain percentage of the sale price before starting each block. The timber buyer takes all the risk on volume and quality. The sales prospectus will state that the volumes and quality listed are the forester's best judgement but are not guaranteed. The bidders are welcome and expected to scale the timber themselves. It is a good way to sell timber, especially larger tracts. The trees will be individually marked and everyone is bidding on the same thing, so it is a level playing field. I just wish that the foresters would keep score the same way the buyers are. They're counting touchdowns and we're counting home runs.

This sale works the best is if the forester and landowner determine the harvest prescription and then market what they want removed from the stand. If they are looking toward the future they can just mark everything they want gone and sell it to the highest responsible bidder. The buyer figures out how to market everything.

You say that this is not a competition, it is a business transaction. Yes it is a business transaction, but it is a competition too. And a fierce one at that. I'm trying to find the same timber the forester is and buy it outright from the landowner rather have it go through a forester. And not just to save some money. I have a personal policy of paying as much as I can for timber, not as little. It helps me find more tracts as my happy landowners spread the word about me. It's about doing what's right for the timber stand and the landowner. Now this is off the track of what this thread was originally about, but I know of only two consulting foresters who do not high grade/ diameter limit every tract. And one of those only works part time. They'll mark a few cull trees for show but mostly they high grade. So as much as loggers are sometimes bad mouthed for being all cut and run, slash for cash, and foresters are heralded as being the saviors of the forest, I've found the opposite to be true. I have logger friends who like me care about the future of the forest and the industry and are willing to make a little less money now in exchange for better, healthier timber in the future. Most, but not all, of the consulting foresters I know are in it for the quick cash and retirement in Florida in twenty years. They didn't come from a timber background, or even a rural background, and all they seem to know is what some professor told them in college. It's ok to not come from a timber background, not everyone has. But you better know the industry and local markets well before you start representing yourself to landowners as a professional consulting forester.

This isn't intended to be a rant, it's just the way I see things. I have bought alot of timber over the years, and intend to buy alot more. And I have looked at alot more than that, so I've seen what goes on. As soon as I learned to walk I was out with grandpa in the woods buying timber. Even way back then one of his biggest gripes was the sme thing, the foresters were using different scales than what the local industry used. Why can't they just get on the same page as the rest of the industry?

[SwampDonkey]

You can blame the forester for high grading, you can also question whether the landowner is knowledgeable about his practices or out for a buck to. It's hard to know sometimes. I can't imagine a landowner, who wants his ground managed properly, letting foresters and loggers leave all that top wood around and their woods ground high graded. I would assume the word would get around quick. Of course woodlot owners are awfully independent and figure what they do is nobody else's business and when things go wrong many are too embarrassed to say much especially when being advised to get help before hand.

[Ron Wenrich]

Its all about credentials and reputation.  I've heard all those stories about loggers who will trash your land and ruin your timber.  I can even give you names and tell you what truck they drive.  They don't buy timber from consultants, because most consultants know them as well.

But, the better loggers pay as much as you will get from a consultant, and they will leave a better job.  There's a lot of ways to trash a stand of wood.  Diameter limits is one of the easier ways to do it while telling the landowner you have their best interests at heart.

Landowners have swallowed the pill that only foresters can do them right.  Its a matter of credentials.  They have experience (although not all of it good), and they have the letters behind their name that some organization has said they were "certified".  Some have to pass a test to be licensed.  But, how many of them have ever had their work checked by anyone other than a logger? 

Passing the buck to the landowner is the easiest thing in the world.  A forester who claims that they do things a certain way because a landowner said so is taking the easy way out.  How many landowners really know what is best for their woodlot?   That's where being a professional comes in.  I only know of a few foresters that will walk off of a woodlot when the landowner doesn't want to do what he recommends.  Although the landowner owns the woodlot, I don't have to put my stamp on the way they want to manage it.

[SwampDonkey]

Forester's or technicians certified under an association that does not peer review isn't worth salt. The only association of professional foresters in Canada that I've heard of about a peer review process is the BC association. That's one reason I've never joined the NB association, there is no peer review. You write and pass a test, and your in for life. It's not much more than becoming a member of the Lion's club.


As far as doing the right thing by the landowner, well who's the boss? You offer advise, if it ain't taken, it's now the Forester's fault? Hmm. It's easy to walk away if the government is covering your pay cheque, if your on your own you might go hungry.

[SwampDonkey]

I'll add one more scenario to the mix, which is extremely common around here. One logger, usually a forester or technician in this case, will do a good stand improvement or use a selection system to remove the worst first and leave a good neat job behind. Goes onto his next job. Landowner calls up another logger in 2 months to come harvest the rest because he gets greedy or wants a new car. Or it's possible he gets coerced into thinking the previous logger high graded his woods, so he's told "you might as well cut the rest".

[Frickman]

Ron,

I walk away from alot of timber, both consultant and non-consultant timber, when I don't agree with a harvest prescription. No matter who ordered the harvest and laid out its parameters, my name will be attached to that woodlot for the next fifty years. People forget who the forester was and even who the landowner was, but they'll always remember that so and so logger who came in and destroyed the woods.

Swampdonkey,

That scenario has happened to me. I went in on one job and low-graded a nice stand of cherry. Took my time and didn't skin and bust up the residual stand. Fifteen years later it would have been a gorgeous woodlot with lots of veneer. The week after I left the landowner had someone else come in and clearcut everything I had left. I made money, so I didn't care much. It still broke my heart kind of though.

[Ron Wenrich]

As far as doing the right thing by the landowner, well who's the boss? You offer advise, if it ain't taken, it's now the Forester's fault? Hmm. It's easy to walk away if the government is covering your pay cheque, if your on your own you might go hungry.

If you mark it, you own the management, no matter who writes the check.

[jrdwyer]

Most consultants will accept jobs where landowners want a high grade because a majority of us work on commission. No mark, no sell, no eat!

In my previous job with the Kentucky Division of Forestry, I once marked a light selective harvest for a landowner which was paid for/subsidized by the citizens of Kentucky. The landowner sold the timber as a heavy high-grade (ignoring the time and effort I put in) to a logger who convinced him this was the most profitable way. This was a good lesson for me and also a statement about the folly of government subsidized forestry (the landowner did not have to reimburse the state of Kentucky).

I personally feel no remorse in marking a 14" diameter limit cut if that is what my client wants. If fact, I have a 9 acre sale just like this coming up. I still get my client the highest market price up front, write and administer the contract, and make sure the property is protected from damage throughout the process. Believe me, this is much, much better than a share timber sale where the receipts are disputed after the fact and ruts 2 feet deep are left on the property. If you don't think this happens, then you need to take a trip to western Kentucky and I can show you some examples.

Most ethical consultants will explain to landowners all the options available. Long-term timber management is not often the choice of landowners looking to cash out and then sell the land. It is the choice for many landowners like farmers and families who want to keep the woods healthy, productive, and valuable over the long haul.

I do know other consultants who seem to always have timber for sale with very high volumes per acre which could indicate a high-grade. Is this their ability to persuade landowners to high-grade or just the desires of many landowners? Probably a combination of the two.

It is a very competitive and challenging game, but in the end consulting foresters offer value above and beyond the commission rate they charge.

[Ron Wenrich]

It is a very competitive and challenging game, but in the end consulting foresters offer value above and beyond the commission rate they charge.

I've seen that statement used quite a bit by many consultants.  I guess a lot depends on what you call value.  Its a lot different when you are on the procurement side, and you have to prepare a bid.  Any time you bid on timber you are up against other mills. 

[SwampDonkey]

And I wonder how many mills procuring volumes from private land visit my woodlot to see how I'm managing it. In my circumstances, none of them. The large industrial mills around, have their own freehold and crown. They don't need to buy my wood. The smaller mills have a sublicense for crown volumes from the bigger players and their own wood ground as well. There must be lots to go around, since they are exporting round wood steady. We have one local mill here that is softwood only. They will buy up private woodlots, flatten them, no exceptions, and if it's hardwood ground they won't do any silviculture on it. If the regrowth is poor they will reforest some with spruce. I understand they have a budget to operate on like any mill. You can only spend on silviculture based on what your net profits are. They hire most of the cutting by independent loggers.

[jrdwyer]

"I guess a lot depends on what you call value."

A recent timber sale I completed and sold will sum it up nicely. Selective marking with long-term timber management as the main goal of client. Stand selectively marked (100% mark and measure) and AGGRESSIVELY marketed to over 60 buyers. 5 bids received with the price variation of 220% from high to low bid and 52% from #1 bid to #2 bid. I cannot say the high bidder overbid as these guys have been in this business since the early 1950s with their dad in the business before that. The other bidders were probably too conservative with their pricing of walnut veneer. Walnut veneer logs can vary from $1-$20/bf depending on size/grade, who buys it, and when it's bought.

So I did my job and the client got the top price (paid upfront) and that alone covers the commission.

Above and beyond, they will get an improved woodland with cull and partially cull trees cut down and/or deadened (some TSI may be required) which will result in higher rates of growth and value in the future. BMPs will be followed during the sale to ensure the site is protected and the soils stay productive. Finally, a good growing stock of healthy timber (remember I looked at each and every leave tree to gauge its health) is being left for harvest 15-20 years down the road.

I hope this sums up the value a good consulting forester can provide to a landowner.

[Ron Wenrich]

That's not really a good comparison.  You've taken one of your sales, and judged all buyers by the outcome.  I might point out that 90% of the potential buyers didn't participate, and that market conditions are pretty flat.

A better comparison is where a landowner had several mills give offers on timber and where a consultant sold that timber for a higher dollar value than the mills were offering.

My point in buying timber is that a lot of factors go into the sale bid.  It doesn't matter if there is another competitive buyer or not.  Bottom feeders bid on sales just to see what the sale price is.  They have no interest in buying the timber, but will take if for a low bid.  Top bidders will buy timber to keep others out of their area, they need the timber, or they are willing to pay a premium for some other factor.

[jrdwyer]

Ron,

I used this sale because it was the most recent (2009) and fresh in my head. It is a valid example and explains how one should never underestimate what the market can pay, even when conditions seem poor. I can't disclose prices per bf or per acre for this sale because of client confidentiality, but the price received was above my expectation and above published averages for high quality stumpage sales in Indiana for 2008.

Although I only received 5 bids on this sale due to its limited total volume, many more buyers did look at the timber. I would never underestimate the fact that buyer A seeing buyer B or buyer C on site could potentially influence his or her bid on the timber. Even on highly desirable sales, I usually only receive 8-12 bids out of 60 or so potential bidders. This does not mean that the client is not receiving the highest market price, rather all the competitive buyers who want to bid are bidding. If a buyer can find less expensive timber elsewhere without bidding, then so be it.

Over the years, I have had numerous sales where a timber buyer approached the landowner prior to me being involved and made an offer on some or all of the timber. I have even had a case where different timber buyers made offers one after another and they each spent their time marking and measuring different trees. It was no wonder that buyer #2 had a higher offer than buyer #1. The landowner in this case (an absentee) did not even realize this fact until I pointed it out to him. In all of these scenarios,  I sold the timber for significantly more than the buyers initially offered. All consultants have such stories to tell, as it is very common.

Competition amongst buyers for a well-defined resource DOES result in higher prices being paid to the seller. This applies to trees, land, or any product. The more scarce/unique the resource or product, the higher the potential for gains to a seller and/or agent who uses good sales and marketing techniques.

Many landowners know very little about timber and its value or how to properly market trees for sale. Why then would a landowner trust the opinion of buyer who makes an unsolicited offer on some or all of the trees? Why would a landowner assume that a buyer is qualified to manage their forest? The independence of a consulting forester, especially one with good credentials and who can actually manage a woodland, offers a desirable middle ground to many landowners.

"A better comparison is where a landowner had several mills give offers on timber and where a consultant sold that timber for a higher dollar value than the mills were offering."

Not sure what you are getting at, but a if you mean a comparison between prices paid to landowners with and without a consultant involved, then please refer to this study:

Valuation of Consulting Foresters'
Contribution to Timber Sale Prices

by
Ian A. Munn
Department of Forestry
Mississippi State University
Mississippi, 39762-9681

and
E. Carlyle Franklin
Woodlot Forestry Research and Development
North Carolina State University
Raleigh, NC 27695-8006

In high quality hardwood stands, I would say this study underestimates the value consulting foresters can provide to landowners.

Joe Dwyer

[Samuel]

Forester's or technicians certified under an association that does not peer review isn't worth salt. The only association of professional foresters in Canada that I've heard of about a peer review process is the BC association.

Alberta has one also.

[cheyenne]

O.K. I'm still dumb I've read through this thread ten times and I don't see where anyone has answered the question. Why can't we all use the same scale or is it the fact of money..Scale to the landowner..verus...scale to the buyer...verus scale to the the mill..yadda..yaddda...yadda....Cheyenne