Stumpage value

[jim king]

I know it seems as a foolish question coming from a guy in the tropical wood business and lived almost half my life in the jungle but here it is.  In all of these years I have never seen a published stumpage value put on a tropical forest for any manner of logging be it clear cut or sustainable.  The governments in which the Amazon exists cannot tell you what it is worth.

There seems to be no studies that I can use as reference to back up what value I would put on it..    Has anyone any reference to a reliable source of information on values ?¿

I find a lot of stories about the "possible" new medicines that exist here which is of no interest to me and I dont think it has much basis either.  There are studies on "possible" renewable resource products but I can find nothing about wood.

I have Googled until I cannot Google any more and found nothing credible..

[Tom]

Jim,

I don't mean to be a smart-A, but I think it has to do with your land being an object of "Preservation" rather than "Conservation".  It's not just your government either. It seems that the entire world knows better what to do (not to do) with the rain forests of S. America than those who live on the land and are in a position to manage it.

It's hands off/don't touch management and it's lead to don't look, don't learn.

Anything, even studying for medicines would be better than what is going on now, with the management being done by the uneducated. 

[Ron Wenrich]

There are a few sources for northern species that give stumpage values.  But, I've always found them to be pretty worthless.  There are too many variables to simply say that the value of timber is $X/Mbf.  Size, location, and yield all play a part.

I've always had a formula that went that lumber value = log value - mfg costs - profit.  That can be taken a step further where  stumpage value = log value - mfg costs - profit. 

Your situation is pretty unique.  I believe you said that some of the species you couldn't harvest.  I guess that would leave the value at $0.  You can't sell it and you can't use it.  You also said that some stumpage was unusable.  Again, that's valued at $0.

Since your logging techniques are a lot different than others, the yield from your tree has to be factored in.  If you have a tree with 1000 bd ft, but your logging and useage is only 500 bf, then you have to take that into account in your value.  You should be able to work from your lumber value right straight back to a given stumpage value.  That's how mills buy timber up here, but we have to factor in what the guy up the road is going to bid.

Stumpage value will vary from mill to mill, from job to job, and from species to species.  Its what its worth to you, not some honcho that flies a desk.   ;)

[jim king]

I think the best description of tropical forestry is that we are uniquely backwards in the tropics and we are not advancing as as you have correctly stated the outside ideas of people whom have never seen a tropical forest are with a lot of money and influencing in a very bad way the management of the tropics.  We are lucky that we have no forestry industry to speak of in the Amazon and this is due to the wide mix of species and conditions and no one has a market for but a dozen of the hundreds of species much less know what is growing here.
I create a stumpage value per acre after I have my forestry inventory and asess the marketable species by volume and price but look as I may I cannot find even the slightest info to back me up..
We are in a continuous war here as the intl. do gooders come up with some things that are totally off the wall and really create problems.
The attached photo is from last week at the entrance to the local office of the DNR.  The name on the coffin is the national head of the DNR.  They are currently in a fight (very possibly deadly) with a group of loggers who bought logs from the indigionous people and tried to export it.  As the indiginous did not have a legal license the people who bought about $5,000,000 of Spanish Cedar logs are screwed, not happy and dangerous.  This will come to a full boil this week.

This is the lumber business in the Amazon.  We are very fortunate in that we are quite possibly the only lumber company working legally in Peru and maybe our mansgement practices have some holes but at least we can sleep.

I sure would appreciate someone having some stumpage values even very general by some respected group that knows what they are saying.

I will attach the photo, you will get the idea.  They dont settle arguements here like DeMoine.

[Tom]

Looks more like Chicago.  :D :D

[jim king]

Do either of these fit any established system to determine stumpage value.

1:  The value of the wood less the costs of logging, transport etc. subtracted from the price a mill will pay.

2:  The value of the wood as a percentage of the finished product derived from the logs.

[Geoff Kegerreis]

Do either of these fit any established system to determine stumpage value.

1:  The value of the wood less the costs of logging, transport etc. subtracted from the price a mill will pay.

YES!

2:  The value of the wood as a percentage of the finished product derived from the logs.

NO.

Jim, I sincerely wish I could be down there to help you.  Seriously.  That is an AWESOME project you have going on down there based on what I know about it and that sure isn't much.

Stumpage = the market price of the standing trees.  It's a very important figure for me as without it, it would not be possible to appraise a customer's property holdings.

Stumpage is usually reported per species, average grade throughout the area where it's purchased and in a certain measurement (MBF - Int'l 1/4", Doyle, Scribner, Cord, Ton, Metric ton, Cu. ft. Cu. meter, etc.) and product standards (whatever makes a millable log: 12" dia, 14" dia? and what is the minimum small end you would scale - 8", 10"?).

For example, the current stumpage price for sugar maple up here is approximately $350/MBF Int'l 1/4", under the product standards of minimum logs in the 10" class (9.1"-11.0" actual) and 8" D.I.B. (diameter inside bark - 9" diameter outside the bark is an estimate) top minimum for merchantable material.

When the product standards change, your stumpage figure will change - ditto for board foot measurement type; For example, there is no accurate conversion between Doyle to Int'l 1/4" to Scribner, because they all are estimates based on different scaling calculations.  The average diameter, height to a certain minimum diameter and form are what give you volume.

If I were appraising your holdings for example, since your market is limited to basically the firm you sell to which is...well...your firm, I would ask you: 1. what would the mill pay for delivered logs of a particular species (per whatever measurement you use)?  2. What your total costs are for logging and the trucking (and the carrying across the bridges in the case of some of those jobs) for the entire job by that measurement.

What you pay per given site (or an appraisal - needed to answer questions on procurement prices) will change based on the logging costs (volume/acre of desirable species, underbrush, rocky, wet, steep, % of species type, etc.), and trucking - really logistics in your case- costs (distance to mill, road improvement, bridges necessary, type of movement of logs, etc.) but the stumpage figure remains the same (unless market forces change for that product) since it is an averaged value.

[Geoff Kegerreis]

 ;D You may find yourself in the unique position of establishing the first ever published stumpage rates for the Loreto district.  Congratulations!  :D

[jim king]

To me this sounds reasonable so in a few weeks I will have a stumpage value on several 90 acre plots.  But it will only be of usable species.  I see no reason to count unusable species and try to put a fake price on them.

The land costs here are negligable about $23 an acre and 30,000 bf per acre of standing timber and at least 5,000 bf of high quality downed logs plus the beautiful spalted logs we have here..   We do not have a standard DBH as many species die of old age and never reach 10 " such as Snake Wood and Amazonian Ebony that sell by the pound.

I will post an update when done.

[Geoff Kegerreis]

To me this sounds reasonable so in a few weeks I will have a stumpage value on several 90 acre plots.  But it will only be of usable species.  I see no reason to count unusable species and try to put a fake price on them.

Yeah, that doesn't make sense yet as effectively the stumpage price is $0.00 right now.  You know all those species are useful for one thing or another, it's just that the market hasn't fully developed for them yet.  It will though - it's just a matter of time before that happens.

The land costs here are negligable about $23 an acre and 30,000 bf per acre of standing timber and at least 5,000 bf of high quality downed logs plus the beautiful spalted logs we have here..

Why in the hell am I living here?  smiley_cry  :D

We do not have a standard DBH as many species die of old age and never reach 10 " such as Snake Wood and Amazonian Ebony that sell by the pound.

Much of the commercial wood that is sold doesn't reach 10"...10" was just a product standard put into place for the consideration of the grade log milling operations, many of which primarily take 12" or larger logs with a 10" DIB minimum top.

For that size of wood, you'd have to come up with your own product standard, or just use a simple one that exists already: Volume by the cord with specifications of minimum DBH in the 4" class (3.6"-4.5" actual measurement at D.B.H.), with a 4" DIB top.  Sometimes even smaller minimum top standards are put into specification for softwood.  You could also simply use weights as part of your product standards, but weights vary somewhat and the weight isn't as accurate of a measurement of the final product. 

I'd love to see what your stumpage is by the cord - $$$

I will post an update when done.

8)

[Ron Wenrich]

Jim

Your first equation is OK as long as profit is equal to $0.  The other factor is that you are using ungraded logs. 

Your second equation would be dependent on yields, and that also would be dependent on log grade.  Stick with the first equation.