Unit Sale (Merged Threads)

[DLcobb]

I am novice working on a timber contract  for a unit sale.   I am trying to understand it better but not quite got it.  

When ask for bids on a unit sale you are asking what you pay for per ton for every ton taken out right?
For example: I ask for bids someone will bid back $20.00 per ton.


Do you have them pay in advance of each load?  

Does anyone have any good stipulations to put in a contract already wrote up?

Please help
eh?

[Texas Ranger]

I am novice working on a timber contract  for a unit sale.   I am trying to understand it better but not quite got it.   

When ask for bids on a unit sale you are asking what you pay for per ton for every ton taken out right?

Yes

For example: I ask for bids someone will bid back $20.00 per ton.


Do you have them pay in advance of each load? 

Depends (foresters love that answer)  If you have knowledge on what the actual cut will be, pay in advance for the entire sale.  If you don't know what the entire sale will be, you are setting yourself up for a real treat as you try to figure out how many loads went out, and to where.

The best bet is to have a complete spreadsheet of all timber marked, and offer it as a single, upfront bid.

Does anyone have any good stipulations to put in a contract already wrote up?

I use a contract/deed drawn up by my lawyer, and updated as circumstances demand.  It may not work in  your area (where are you, anyway?)  Consulting foresters do this for a living, and one on hand to do the entire job will make you money on the sale.  Hire a consulting forester that works for  you.

[Ron Scott]

Ditto! on it depends. If you aren't experienced in selling timber and in administering timber harvests in accordance to the contract terms, it is best to seek out the services of a "professional" consulting forester that is familiar with and serves your local area.

You need to be sure that your intent and interests for your specific situation are understood and protected. 

[Tillaway]

I'll third the above,
Timber is usually sold as either recovery or lump-sum cash, a unit sale is a term I have not seen used.  Is the unit a unit of measure such a MBF, ton or cord or a harvest unit as in all timber inside of unit 2 in the (insert name here) timber sale?

Recovery sales usually require a payment bond for the estimated total sale value with an initial payment of __% up front with minimum of 1/2 of a payment paid ahead and maintained at all times in the purchasers account, purchasers usually pay twice a month to coincide with usual bimonthly payroll dates.  You need a way of measuring and tracking the amount of timber removed.  We have numerous third party scaling organizations here and the local mills will contract out to the companies for log scaling in their yards.  Lacking that, the easiest way is to sell by the ton.  We also have load ticket requirements in the contract.  Even the smallest as in private small woodland landowners will have their own load ticket books and have their own log accountability systems in place.  Those that don't tend to lose a few loads now and then. :(

Lump-sum eliminates the the log accountability hassle but tend to net lower sale proceeds due to increased risk for the purchaser.  Lump-sum requires close monitoring on the ground to insure that harvesting stays inside the boundaries and other contract provisions of what to and where to harvest are met.  You can't just say "Thanks for the check have atter boys."

[Pullinchips]

I will fourth what the guys above are saying.  There is many problems that can occur and many things that need to be in a contract to cover you so you dont get taken.  A forester will chech the logger and try to keep him honest and can spot a potential problem before you may notice to help correct it.  There are several types of sales lump, unit and variations of the above.  Lunp you want money in hand before any cutting is done unit is by the unit paid for as the scale tickets are counted up each  week every other week, whatever you decide on how to do it.  What ever you do or don't put in that contract dictates how you will be paid and how and when the timber is cut.

As far as do you get $20 a ton for every load taken off.  If you write it that way and do not dictate the species or products being taken out thats the rate. This depends i have no idea of hard wood value in your area or softwood. But around say you price for pine is $10 is this a blended price or for one product.  Meaning do they pay $10 ton for pulp , Chip logs, saw logs and peelers i hope not. Unless you have almost none of the later products.  If all you have is pulp if this is a real bid with a contract that has been drawn uop to cover all aspects this would be a hell of a price.  Not only will products effect this price but like i said tree species also affects it.  If your contract is not specific with maps of harvest area and the logger gets out of the area u wnat cut say your pine plantation and starts cutting your nice hard wood stand he only pays you $10 ton for HW saw logs also.  This will hurt and unless he is made very clear of it it will be hard to settle this dispute sice he is paying the contrant price for it.  He even does not have to get out of the sale area to hurt your profit just think of a mixed pine HW stand at a $10 ton price if there is lots of hw logs he pays $10 ton for them again. 

This is just an example there are so many things that would be so hard to tell you to make sure you are covered.  Just air on the sid of sense and get a professional to draw a contract up and administer the sale for you.


Think of the whole thing this way if this is not your area of expertise hand the reins over to a pro.  Just like you (if your not a builder) or i go to buy a house, i would never sign with out a home inspection, i have an idea of what to look for, but where how for in depth, and what if i for get to check the plumbing. There is just so much that needs to be thought about and for your own benefit seek professional guidence their commission is piece of mind when you  know that you were not screwed over in your sale by someone.

-nate

[gary]

I have an uncle who wanted to log his land. He had worked in a steel mill with a logger. So he called him to get an offer on his timber. I kept telling him to get a forrester. The first logger offered him $20,000. He hired a forester. The forester was paid 7% percent of the sale price . The forester did everything from marking the trees, to selling the lumber. The only things my uncle did was sign the contract and sign the$70,000 check. That is the best reason that I can tell you for  hiring  a forester

[Phorester]

Amen, Gary.  My forest technician's father wanted to sell some timber about 10 years ago.  He asked a local logger he knew if he thought he could pay enough so he could buy a new pickup.  The logger said, well, maybe, but it's not worth much.  My tech finally talked his dad into hiring a consulting forester to sell his timber.  He got paid $88,000.  One hell of a new pickup, I'll tell you.........

[DLcobb]

Novice forester that has to wear many hats

I am doing a unit sale  (per ton sale)  not sure what the official term is.  A sale based on weight tickets.

I have to do it this way and I do not have the funds for a consultant forester and the State Forestry Office will not get involved.   So I am on my own.

So when I bid this sale out, I know the price for Hardwood Pulpwood and Hardwood Sawtimber is different.  I know there is Hardwood sawtimber and pulpwood in this unit.   

How do I accept the bids. 

1.  Do I get a two bids consisting of a bid for Pulpwood and a bid for Sawtimber from each timber buyer, such as a timber bidder bids 21 for sawtimber and 4 for pulpwood.   

Or 

2.    Or do they bid just on the Sawtimber.  I get a bid from a bidder willing to pay 21 per ton. 


When a truck of timber goes to a  mill and gets weighed,  does it say on the weight slip if its sawtimber or pulpwood?.   

[Tom]

I'm sure the Foresters will come running to help.  But, I have just one question. You are saying that you are a Novice Forester.  Does that mean that you are just out of school and have a Forestry degree, or, does it mean that you are an average fellow looking to do a Forester's work?

That sure makes a difference when you talk to these Foresters.  They may expect you to be familiar with a lot of terms that a Forester should know.  It will help the communication if everyone knows where everyone stands.

Is the sale for your timber?

If it is for a client, you might be money ahead to subcontract a Forester and use the sale as a learning experience.

Why will the State Forestry Office not get involved?

Well, that lead to more than one question, but your post just seems to be drawing out more and more.

[DLcobb]

well, if I know the timber isnt probably going to be worth $1,000 why should i pay a consultant X amount of dollars to carry out a contract that might even be more then what the timber is worth?

[Tom]

If the timber on 35 acres isn't worth a thousand dollars, why bother with the sale.  It sounds like you just need to hire someone to clear the land.

We need, somehow, to get all of these posts you've made into one spot, one thread.  It's already mighty confusing trying to figure out what is going on here.

(I have merged threads from "Logging" and "ask the forester" to this thread that was already in "ask the Forester" to consolidate one set of questions and their answers.)

[bull]

more info about your expierence.
sawlogs are just about always worth more the pulp.
more info needed about the job

[Ron Scott]

It's best to discuss your situation with a local forester. The local conservation district forester can advise you whether you have a "viable" timber sale or not. They usually provide such a "free" service and the professional advise may save you $$$.

[gary]

Even if it is only a sale worth $1000.00 the forester only gets a percentage  I'll bet the forester increases the value of your sale by more than their percentage.

[David_c]

From a loggers stand point a $1000 sale on 35 acers isn't worth moving equipment to.

[Ron Scott]

Yes, if that is all the timber to be harvested on 35 acres, that's only $28.57 timber value/acre. There needs to be at least about $300.00/acre to harvest for minimum interest by any logger in this area. Most jobs run $500 - $1,000/acre harvest value.

[Ron Wenrich]

First of all, where are you located?  Second, how do you know its only worth $1,000?

Depending on your part of the country, sawlogs may get weighed, but most likely they will get scaled.  But, if you are selling by lump sum, then the weight tickets don't much matter.

For 35 acres, I would get some kind of cruise.  Even a tree count is better than what you have right now.  After the cruise, you can offer it for sale, and get a lump sum offer.  Have a contract drawn up and get paid before cutting begins.

I know that I have been on many a wild chase where landowners think they have timber they want to sell.  The cost to the landowner is $0.  I charge nothing to go out and look at a stand of timber and give my recommendations of the next step.  I bet other consultants in your area do the same thing.  It will just cost a few phone calls to find out.

[Phorester]

I wonder if the cart is not being put before the horse here.  A timber sale should be done to accomplish some forest management objective, not just to have a timber sale.  In some cases the objective is simply to make money for the landowner, because he needs money and can't get it any other way.  This may be your case.  But the way you are describing it, it sounds like the logger is driving this sale, not the landowner.

Secondly, a consulting forester gets paid on a commission of what he gets for the landowner when he sells the landowners timber.  So his fee comes out of the money that he gets for the landowners timber. 

My experience is that a consultant in my area will get the landowner 3 to 4 times more money for timber than if the landowner sells it himself.  That's because a good consultant knows the timber markets and the buyers who wil be most interested in the timber in each sale.  So he makes an effort to get the buyers there who will bid the highest price.  The consultants in my area charge from 10 to 25% commission. The smaller the sale, the larger the commission.   Again, he will get 3 to 4 times more money for the timber than the landowner selling it himself.  That's 300% to 400% more, and he charges 10% to 25%.

Having said all that, sometimes the sale is just too small to interest a consultant in handling it.  But you still should call a couple and talk to them.  They can give you valuable advice just through a general discussion even if they will not handle a small sale.   Your State Forester may not be able to get involved directly, but good Lord I would hope that they can give you advice on doing it.  That's the job I have, and part of what I do.

It's very good on your part to ask questions on this Board. I wish more landowners would do this before they sell their timber instead of seeking out a forester after things go wrong.  But you're getting the advice that you really can't afford not to hire a consulting forester.  At least talk to a couple as Ron says. 

[Pullinchips]

I will echo again what others are saying get a forester or an unbiased (not a logger) 3rd opinion from the state. If you have decent trees of merchantable size across 35 acres it should bring more than $1000 even if it all is pulp which you said its not. At $5 ton for pulp thats only 200 tons or 8 loads.  I have a hard time beleiving that only 8 loads can come off of 35 forested acres.  This is not worth a logger comming out to get it, especially at deisel fuel at $3/gal, even if it is a small logger b/c he will have to drive all over creation to get the trees.

PLEASE call the state and do not do anything before you get their opinion. Its free.

I know you said they wont get involved, you probably asked the wrong thing of them.  No, they wont draw up a contract or sell your timber or administer the sale.  This is because they do not want to compete with private consultants and put them out of business, because their services are free.  But what they will do is sometime write a mgt plan for your goals, they will give you their opinion of what to do, ie. clearcut, shelterwood, nothing, push over and replant, etc.

This whole situation is making less sense?

-nate