Timber Buying Tips

[CX3]

Hi all.  I havent posted in a while so here goes. 

In my part of the country there is a whole lot of good walnut.  We were real busy the first part of the season, then it just kinda slacked off.  We have been scouting the country looking for jobs, even traveling a pretty good piece from the house to try and buy timber.  No luck. 

People just seem they are not interested in letting go of the trees.  I have even offered to cut all the tops for firewood on some smaller but good jobs.  I offer more than a fair amount for the timber and use a good buyer.  The market is good, averaging most jobs over 1.20 pbf.

Does anyone have any tips on what a guy  could do to advertise a little differently, or get ahold of the right people?  I know one thing, door knocking does not work, either does craigslist.  It is no secret that I am not the biggest logger around, but by golly I treat people fair and I really think this slows me down some.  When I do get to bid a job I lose it because I am off by a fair amount.  When they tell me what someone else said the timber would bring my jaw just bounces off the mud.  I dont know if they are lieng or what but there is no way some of those numbers are correct.  In my opinion this is where the "stories" start about people getting shafted on timber sales.  Then the logger cuts a check and moves on to the next lie.  I will not do this even if it means starting at Mcdonalds in the morning. 

What am I doing wrong, or what do I need to start doing? 

[motohed]

I would talk to your state forestry division , or DEM and see if they have a list of foresters or harvesters . You should be able to get on the list , also check with the local forestry guy for your state . Give him the run down of your operation . He should have some idea of the price per MBF.
You could also check local mills for their purchase price of different species . You can also advertise in local papers or timber magazine , also if you have previous references ,it will help .

[Ron Wenrich]

What kind of bid sales are you talking about?  If its a bid sale by a forester, then your problem may be that you're too low on the price of timber.  Those sale numbers are probably accurate.

Learn what your competition is doing and how they are bidding.  If you're too far out of the mainstream, you better look at your markets and your operations.  The better loggers make their money at marketing logs, not at cutting timber; although they do go hand in hand.

The best method of landing timber is to offer a fair price, know what you're talking about, and knock on doors.  I have yet to see any successful procurement program that didn't rely on face to face contact with the landowners.  If you aren't real knowledgeable about forest management, then either brush up on it, or rely on a forester to help you out.  Or, you could just bid on sales and let the foresters find the timber and make it available.  Just remember that their time is worth something and it provides you with more time to market logs and cut timber.

[Ron Scott]

Ditto! to the above. Also get to know your local consulting foresters and get well known for your good work with them and the local landowners. Times are difficult for moving timber at present and many landowners are still tuned in to the high priices of the past and not selling. For some, their timber is worth more to them left standing.

[CX3]

Well stated above. 

Let me try to better say what I mean. 

I think there are several ol boys around here that are flat lieng about the price they can get for logs.  After the trees are cut the landowner is basically stuck with having to sell. 

Today I went and looked at a job.  I scaled a 18dbh walnut that had 3 logs in it.  First log was 98 ft, second log 72 ft, third log 40 feet.  I told the landowner I thought the tree would bring around  300 dollars.  He looked at me like I was nuts and said so and so said he could pull 800 for that very tree.  I was basically asked to leave his place after only scaling the first tree.  There is no way that tree would bring 800 in any market.  These guys are full of it and causing me to lose good jobs.  I use the same timber buyers every one else does so that is out of the equation also.

Every one says give it time and they will get run out of the country.  Well its been four years now and I am still dealing with it. 

I hope this makes more sense.

 

[timberfaller390]

I will concur that the best way to buy timber is talk to the owners face to face. I f the owners throw out un realistic numbers then move on to the next guy. One thing you can do is go to your county tax office and ask if they have a web site with airial photos and property lines marked. My county does and I take a look every few days and locate possible jobs then drive to the location and take a look. If it looks like good timber then I go knock on the door. Some say yes they would like to sell and some say they do not and some say just take whatever you need. The only good way is to beat the bushes. Don't get discouraged when they say no just offer a business card and tell them good day. They may call you back in a few months. Again just walk away from the people who want way more than the wood is worth because they aren't going to sell to your compition either.They probably don't really want to sell the wood and figure if somebody will pay them some astronomical price then they would sell it.

[rickywashere]

well you could give the landowners the low down on what they are doing i have seen that happen here some loggers will promise the world to a landowner and after that timer hits the market they will say well the price took a big hit .. and then what the landowner to do but let him cut the timber as most work on a percentage here . and have a contract drawn up ,

last 2 people i have worked for told the owner what they could pay up front one i think paid 25% and the other got it for 20%. they took the logs to market keep the tickets from the yard and on Friday cut there check with the workers . its best to tell the owners timber price is unknown till its on the market landing and graded  you can tell them what top dollar is paying and what bottom dollar is paying . and let them be the judge or you can follow others practice ... but i always liked to be honest and fair seems to have keep me alive and healthy for the last 40 years   

[Ron Wenrich]

OK, you have given us the footage that you figure is in one tree.  But, what kind of value do you expect to get out of those logs? 

From your numbers, the tree should have 3 16' logs.  That's what the tree scale has in Doyle.  If you aren't using tree scale, then you may be at a disadvantage to begin with.  Log scale overruns tree scale in most cases.  A lot depends on the bucking.  Make sure you're looking at the same scale as your competition.  If they are buying on tree scale and get a 10% overrun, then they can have a 10% better price/Mbf. 

As for value, if its veneer, then there have been markets when they could pull that value.  But, would the landowner get that value?  Was there some sort of split between logger and landowner? 

You have to know these things before you start talking prices and numbers.  If they have decent timber, chances are you're not the first one to knock on their door.  Fish for information of what the landowner does know.  As I said, know your competition. 

[J_T]

CX3 I feel your pain  :'( Same thing happens here real often . Some these guys are real talkers . Some play on the greed of the land owner .Some owners are kicking the tires so to say too . Some land owners have had some lookers that looked at a few selected trees . First few trees they bid wild then set the hook . Example they can give 2.00bf for some then make it up later one way or the other . Then some will say if so and so offered x then it has to be worth twice that because that logger has lots of expensive equipment . Here no Foresters are not often involved .   

One man i walked away from told him i wasn't interested after another logger talked to him . After the job was done i ask why he left so many trees as he wanted to make all the farm land he could . Said he had no idea i said yep he high graded you and got gone . Now what to do with the rest ??   Not much management been done around here on trees . They think the bigger they grow the more they worth .

[hollywoodmfg]

Seams to be alot of % deals out there or pay as you go? Around here trees are marked by a forester or sometimes a logger than the land owner will take bids. If ya winn ya better have a check reddy becouse owner is payed in full before anny trees are cut.

[Ron Scott]

Most all my sales are "lump sum". All trees are paid for before cutting. The landowner gets paid for the trees before any are cut.

[MDLogging]

CX3, Its the same way around here.  Ive been cursed out, bit by dogs, and had the door slammed in my face more than a couple times.  Even had people say they'll never sell, and not 3 months later theres another logger cutting in their woods.  It gets so frustrating and I've even seen those big prices tossed around that makes me look like a theif when I'm really crunching numbers and making a slender profit with the price I offered!  But believe me,  I've found alot of timber that we've bought and cut talking face to face and going door to door.  You just need to let it run its course and dont let it get you down, because it easily will.  I gaurantee one of those landowners you talked to is flipping your business card around at the kitchen table and talking to his wife about it right now.  Maybe he'll call?  Maybe not.  Ive seen times when my father and I move our equipment to our yard to park, and get a call from a landowner ready to sell before we get finished unchaining the skidder.  CX3 I can relate to what your going through.  Your about the same age I am and we've been dealing with a steady downslope in this industry since we've grown out the stages of driving the cool logging equipment to trying to make a dollar while operating the cool equipment.  I can remember working with my father in the late 90's up until now and we've turned down tons of jobs in the past that I'd knock somebody down to go log right now. Thats because markets were good and we had plenty of work.  So after all that rambling i'm gonna finally get to my point.  You just need to double check what your doing.  Maybe your not doing anything wrong.  I think if you want to stay in this business its something your gonna need to deal with and adapt to for right now.  In 2009 I really want to believe we hit bottom in the forest industry barrel and theres nowhere to go but the slow climb up.  Good Luck

[CX3]

Well I figured others have had some of the same problems in the past.  It does get overwhelming sometimes but we are just gonna keep pounding the brush so to speak. 

We are taking a road trip tomorrow.  I have to get away from these folks that moved in from the big cities that only own 20 and 30 acres and go talk to some farmers who speak my language if you know what I mean. 

Thank you all for the advice.  My lack of experience in buying timber is definitely dragging me down in this slow economy. 

God Bless Everyone

[Bro. Noble]

You might visit with Scott Plumb at the Ava Forest Service office.  He deals with loggers who do the work in the Mark Twain Forest.  I know they recently did some sales around the Chadwick area.  You may not be interested in gov. contracts,  but it seems like most of the logging being done now in our area is gov. timber.

[barbender]

Aound here most federal, state and county wood is sold at auction on the oral bid system. The sales will have the estimated amount of timber on them, which you make a down payment on. The rest you pay for as it is delivered the mills on the per cord price that you bid it to. They do a few sealed bid sales, and also a few that are sold as appraised. When you go into private timber, there are no rules, but I think the common practice on larger tracts is to have a forester scale the wood and pay the landowner an up front lump sum. So if the market falls out, thats the loggers problem. I personally wouldn't let a stick of wood leave my property if it wasn't paid for with most outfits. But it is also common for the wood to be paid for off of the mill scale, at any rate, the price shoul not change. If I say I will pay $20 per cord for aspen,  $15 for balsam, and $10 for black ash, that is what I better be paying folks for their wood, regardless of what prices are doing on the other end. I think you need to look harder at the way you are marketing your wood, if these other loggers are rippin people off that bad I would think they would be getting a bad reputation not to mention legal problems.