Is $10/ton a decent price for Loblolly pine in Central VA?

[WDH]

I am in one of the highest demand areas in the US for pine pulpwood, and the current stumpage price is in the $12 to $13 per ton range for first thinnings. 

I would think that $10/ton in a low demand area would be quite good for pulpwood.  22 year old loblloly pine trees make poor lumber for the most part but there is a chip-n-saw market in many areas that does use them.  It could be that your $10/ton price is a blended price for both pulpwood and chip-n-saw?  Ask your Forester.

[Ianab]

Things is pulp and even low grade saw logs are "cheap". Those $50 (at the mill) prices basically align with prices here, but if you allow $20 for logging, and $20 for trucking, then the $10 stumpage is what's left. Now if the mill raises or lowers their price by a few $$, it shouldn't change the logging and trucking costs, just the stumpage that's left for the owner.  Also distance matters, is the trucking going to be $15 or $25? Mill isn't going to pay more just because it was hauled from further away. So you might find prices between $5 and $15, depending on "things" 

So locally no one really does pulp or thinning harvests. Excess young trees get thinned to waste, the cost to extract them is generally more than their value. But then the mature (and pruned) logs are over $200 a ton at the mill. Assume the same $40 harvest cost, and the landowner actually gets some serious cash. There are still pulp logs going out as well, but that's just the tops and only a few % of the total value. 

If you aren't time critical, then you might wait for a peak in the prices, a small difference in the mill price might translate to a large increase in the return. (unless fuel prices increase the trucking costs, and soak up the profit) 

A crystal ball would be handy before any harvest.  :D

[Mestak]

Thanks again, everyone, for your input. Much appreciated.

Another outfit is now offering us $12/ton for the pulp and $17/ton for the CnS/Sawtimber. This outfit (Fitzgerald, out of Tyro I believe) has also offered a $13.50/ton blended price. The plan right now is to clearcut. As I mentioned, from my measurements, it seems to me that a good percentage of the stand leans towards the larger DCH range, so $13.50 seems a little low to me for blended, but I'm new to all this so I'm not sure.

I'm having a hard time deciding between the two pricing options. Seems to me blended gives a fairly predictable payoff and removes the worry about whether the loads will be sorted and ticketed properly. But maybe at the expense of a lower overall profit.

Thoughts or opinions? 

[WDH]

If your Forester stays on top of the merchandising, the $12 pulp and the $17 chip-n-saw sorts will yield you the best return.   The blended price is most likely based on a sample or estimate of the mix and is usually more conservative.  However, it is important that the wood is sorted properly to get you the best return.   You do not see the pulpwood poorly sorted such that it ends up on the chip-n-saw truck but the reverse can certainly happen.   

[mike_belben]

You do not see the pulpwood poorly sorted such that it ends up on the chip-n-saw truck but the reverse can certainly happen.  

Boom.  
Being slobby only downgrades wood and never upgrades it.  Downgrades cost.

[Mestak]

If your Forester stays on top of the merchandising, the $12 pulp and the $17 chip-n-saw sorts will yield you the best return.   The blended price is most likely based on a sample or estimate of the mix and is usually more conservative.  However, it is important that the wood is sorted properly to get you the best return.   You do not see the pulpwood poorly sorted such that it ends up on the chip-n-saw truck but the reverse can certainly happen.  

Thanks. That aligns with my gut feeling but how does the "merchandising" typically work? Our forester is not a spring chicken and has some physical issues. Not likely to be onsite for much or any of the cut. Do seller-side foresters typically oversee the actual logging operation?

[WDH]

Not every load has to be checked but the quality of the sort has to be assessed from time to time by someone knowledgeable about the sort specifications.  The focus should be to make sure that there are not grade sawlogs or chip-n-saw stems on the pulpwood truck.  

I was the Procurement Manager for a large pulpmill that used 300 tractor trailer loads of pulpwood per day.  My Area Foresters would buy tracts of timber for a lump sum from landowners and would contract with loggers to harvest the timber, and we also had contract loggers harvesting timber off our Company Land.  We were having issues with the tracts cutting out the sawlog volume levels that we purchased so I hired an auditor to come to the Mill and spread out 20 loads each week and measure each stem on the load to determine if that stem was a pulpwood stem or a grade/sawlog stem.  I was surprised to find that the sampled pulpwood loads had 10% sawtimber in them.  

We began to report this value for each logger, essentially giving them a quality score.  Improvement was immediate for most of our 45 contract crews, but some could not correct the problem and they got the opportunity to go log for other companies or themselves.  The % sawtimber in the pulpwood loads fell to 1/2 of 1% (.5%) and stayed there as long as we were measuring the loads. These loggers became the very best and were in demand by other companies and knowledgeable landowners to harvest their timber.  

The point is that you get results in what you measure.  I am not saying the you have to spread out and measure the pulpwood loads coming off your property, but someone needs to have eyes on the process to make sure that there are not sawlogs in the pulpwood loads that you would have seen if you had just looked.  

[Gary Davis]

where I live its not worth it to haul the pulp out but one mill buys saw  logs down to a 5 in top