Wood markets look grim!

[WDH]

What I don't understand is why so many thousands, maybe millions, of acres around here, were planted to pines, when hardwoods grow just as fast, and are worth more for both saw logs and pulp. Must have been a change in the markets from the time those were planted until now.

The fiber characteristics are very different for pine than hardwood.   The fibers in pine are several times longer than hardwood fibers, making them better for absorptive products like baby diapers, which is a huge market.  Hardwood fibers are short and pack down densely on a sheet which is very good for paper like copy and notebook paper.  With the computer age, paper is no longer king.

[Okrafarmer]

I understand the difference in uses, but not why people would plant more of something that is not as valuable. I guess you are saying that they thought hardwood wouldn't be valuable any more now that computers are taking over, but they were wrong in their speculation and they planted too many pines so that now the supply is too high, reducing the prices? Anyway, I was basing it on sawlog prices not pulp, but the hardwood pulp is worth more than the softwood pulp, too. Here, anyway.

[SwampDonkey]

Hardwood and aspen pulp is also worth more up here to than softwood pulp. But I think with log prices for softwood being low, that drove the pulp price down. Some prices for spruce logs are no better than hardwood pulp. Kraft pulp have been at record highs during and after the economic melt down. That uses a lot of hardwood and aspen. Also we have the rayon market to that uses hardwood and aspen. Most of that goes to Asia.

[WDH]

From a financial standpoint, taking into account the current and projected stumpage prices, time, and other costs like taxes, softwood rotations provide a higher return on investment than hardwood in most parts of North America.  For example, in the South, a crop of pine will reach market size and market maturity in half the time that hardwood will.  And, time is money when you look at a capital investment. 

That is why there are so many softwood plantations instead of hardwood.

[mills]

Okrafarmer, what kind of agreement do you and the landowner have?   I haven't yet figured out how to move enough volume cutting up tops for pulp to make any money.   We have a decent pulp market here in western Kentucky, but its mainly the bigger operations doing clear cuts.   

[SwampDonkey]

With aspen in the mix, you get a little quicker return. You can cut good sized aspen every 30 years. It won't be huge, but around 12" on average probably. And actually, aspen pays a little more than hardwood.

Softwood plantations are also easier to manage because the deer and moose don't eat up the planted trees. Rabbits (hare) don't care, they eat anything green even spruce and pine. Competition is easier to control with herbicides. In hotter climates to where workers cutting brush are hard to come by, herbicide is the easy solution. I've not seen herbicide kill sugar maple and beech too well, they just slow down. More effective on aspen, birch, willow and alders.

[Okrafarmer]

Okrafarmer, what kind of agreement do you and the landowner have?   I haven't yet figured out how to move enough volume cutting up tops for pulp to make any money.   We have a decent pulp market here in western Kentucky, but its mainly the bigger operations doing clear cuts.

The arrangement is something like this. The customer has a tree in their yard that they do not want any more, either because they consider it is dangerous, or in their way, or whatever. My boss comes and gives them an estimate. He gives them a price which varies based on a number of factors. Suppose it is a medium sized water oak (2-3 ft diameter).  He gives them a price, like $1,500. We come in. He climbs the tree (if needed) and cuts the limbs off, roping them down so they do not hit the house or other obstacles (as applicable). We cut the small brush off and chip it. We cut the limbs into pulpwood except the inevitable ones that are too short, in which case they are firewood. We cut down the main trunk, using a continuous rope puller to assure it falls in the right direction. We cut the main trunk into saw logs (often pallet grade if the tree grew all nasty), and any that can't qualify for saw logs any which way, get cut up for pulp logs. Then we load either the pulp or the sawlogs on the truck (or both together if the tree(s) are small enough to do all in one load. Then we haul the pulp to the log yard and the saw logs to the sawmill. we clean up the jobsite (often grinding the stump) and the home owner pays us the $1,500. The pulp yard gives us about $100 per dump truck load, weighed by the ton, and the sawmill gives us about $2-300 for a dump truck load of saw logs. We deposit all the checks, and then we can make payroll, pay for gas, and sometimes pay for repairs.  ;) The firewood goes on a a pickup and trailer to be taken back to the ranch and be piled, in pieces just small enough for us to load it and unload it by hand. Then when somebody doesn't know what else to do at the moment, they cut it stove length and split it. Then we sell the firewood for less than we have invested in it in terms of labor, and/or it sits around and rots.

[Okrafarmer]

We have a decent pulp market here in western Kentucky, but its mainly the bigger operations doing clear cuts.

By the way, my parents live in western KY, just west of Kentucky Lake.

[Ianab]

That's the thing here. You are making most of the profit on removing the tree. Selling the wood is just the icing. Better to sell a load of pulp logs for $100 as opposed to paying $100 to dump it at a landfill. Or in this case, you can do the job for the customer $200 cheaper, and so get the job.

But the tree in the yard still has a negative value. Costs more to harvest than the logs are worth.

When they harvest local trees some of it goes as pulp grade logs, but again they barely cover the trucking. But they have got 4 better sawlogs out of the tree already, and that's 98% of the value. Those top logs are still at the landing, and they need to do something with them. But harvesting for pulp only is not economic, unless it's on a really large scale, and close to the mill. Then they grow the trees on a shorter rotation (~15years) and harvest them more like corn. Big mechanised processor, loaded on oversize trucks and hauled to the mill on private forestry roads (no weight or length restrictions on the trucks)

Ian

[Okrafarmer]

You are right, Ianab.

The specifics are going to vary with location, market, tree species, and so on. But the question is, does the land owner require all the trees to be removed? Do they require the undesirable ones removed, so that more desirable ones can grow? Do they require that all the top logs not be left around?

In our case, pulp is worth about half to 2/3 of truckload value, compared to saw logs, depending on species. Seetgum, for instance, a ubiquitous weed, is a relatively heavy hardwood. A dump truck full of sweetgum pulp is worth around $120, whereas a dump of sweet gum saw logs at $175 / k might be worth about $175. More if the logs are big diameter. The smaller the logs are, of course, the less they are worth per ton as saw logs, since the saw logs are sold on either the Doyle or Scribner C scale and there is more waste as the log gets smaller.

But all sweetgum ought to be cut, whether they make a saw log or not, to improve the stand. especially if selective cutting on a worst-first basis. However, clear-cutting is more common here, in which case everything is taken regardless, resulting in a lot of pulp anyhow. Clearcutting around here means 20-30 years later you have mature pines, tulip poplars, sweetgums, and water oaks, with a handful of cherry, red oak, and immature white oak, hickory, and red cedar. That means you can clearcut again and not reseed it, every time that happens you have the same pioneer species mix and it doesn't improve much if any. If you want mature white oak, red oak, red cedar, hickory (most people don't), and other fun stuff like that, you have to manage for it or else let it grow longer than 30 years.

So much good could be done for peoples' forests if they would just implement a worst-first selective cut strategy. But these strategies don't pay for themselves up front, and everybody would rather take the smaller lump sum up front than wait for dividends in the future.