Working with landowner on cutting and marketing blown down Red Oak

[ppeterson]

I live in Northern Wisconsin and recently a small tornado went through our area and blew down around 100 Oak trees. Some were on my property but the majority was on the neighbors property. I told the neighbor I would go in to limb and cut the trees to market lengths. Then I would locate forwarder and operator to forward the wood to a landing. At that point the logs would be distributed to the proper markets. I would do the marketing and locate a truck to do the hauling.

The neighbors live in the Chicago area and would have nothing to do in the processing from the woods to the mill. They just own the timber.

What is a fair way to split the profits from the wood?

50-50 on the forwarding costs?
50-50 on the trucking costs?
50-50 on the revenue?

I have never done anything like this before and do not know of any standards to follow. Your input would be appreciated.

Best regards,
ppeterson

[Sprucegum]

Yer opening up a real can of worms there.

How well do you know the neighbors?
How much do they like money? Will they start wondering why they get 50% of the revenue when they had 80% of the timber?
Will they trust your account of the expenses?

I suggest:
Keep your timber seperate
Give them an hourly rate for your limbing, etc
Get it in writing

Good luck

[Ron Scott]

If you arent very knowledgeable in handling such a situation of "downed timber" and know your neighbor "very well " I suggest that you and the neighbor have a professional consulting forester as an "independent party" handle the sale and harvest of the salvage timber for both of you.

[Jeff]

Yep, sounds like the real potential for a mess.

[ppeterson]

I have a relationship with my southern neighbors.

My timber will be kept seperate from theirs in the scaling process. Opposite sides of the road.

Last spring these people had a forester from a paper mill contract log their property. I saw some of the prices they recieved for the Oak veneer and #1,2&3 sawlogs.
I think 50-50 might look better to them.

Anyway, is there a standard out their for the services I am offering them?

Limbing, cutting, arranging forwarding and monitoring, marketing & arranging freight?

Thanks.

[Jeff]

Personally, I think 50% is way out of line. A professional consulting forester does the same thing for 10 to 15% and they have all of the experience and education behind them to bring the chances of a successful sale about optimum. They have the knowledge to get the most from the timber and look out for the worst that can effect the sale.

[Texas Ranger]

Yup to Jeff.  You are handling some one elses property, you need an intermediary.

[ppeterson]

OK, I hear you guys and where you are coming from.
I am not new to any of this. I have been employed in the sawmill industry for 35 years. I have been involved in procurement and sales for the last 15. Before that, supervision. I spent one year starting up a logging operation for our company when they decided to buy a processor and do some of their own logging.

I know where there are log markets and I understand how to cut a log.

I have delt with blown down areas before. The part about this particular one that makes it easier is it is all shelter wood that was left from when it was logged last spring. All the wood is lying flat on the ground in very open areas.

I am just looking for guide lines to follow so I can feasably make it worth my time and still create more profit for them.
Remember, along with managing the harvest, I will do the actual limbing and cutting.
I understand the 10 - 15% fee for a consulting forester and that is all fine and good except there is more involved here.

It was suggested by Sprucegum to submit them an hourly rate for limbing and cutting to length. Mabey that plus 10 to 15% sounds more appropriate, with the skidding cost and trucking cost coming from their pocket.

I have already for-warned the landowner that no matter what they decide to do, wait until the oak market picks up. Prices are really down right now.

Thanks for your comments.
ppeterson

[SwampDonkey]

Just my 2 cents worth here, and not trying to take anything away from the thread. Since we don't have the quality of hardwood timber up this way, the best I've heard (meaning the most revenue to the landowner) was a 50/50 on the mill delivered price or veneer and logs. Most of the time the landowner is getting about $20-40 per cord depending on the pulp market. And the contractor complains that the small volumes of logs he can get from the harvest doesn't justify hiring a guy to buck them from the pile. I've seen this to be more true than false. Remember I'm up on the northern range of hardwood. Look at my thread in 'OutDoor Activities' Trip to the Tobique and you'll be surely disappointed if you think those big hardwood I photographed are gold mines. ;)

[Frickman]

On a typical harvest, with no extunating circumstances, I will split gross sales of saw and veneer logs 50%. Sawn lumber is on a sliding scale from 15% to 35%, depending on the grade of lumber. All this is negotiated beforehand and included in the contract. This is on a typical harvest in average timber, not blowdown like you described. This is also me doing all work and marketing, the landowners just provide the timber. Since you've been around the business a long time I won't bore you about liability, insurance, government regulations, etc. For some of the other folks here who have not harvested timber let's just say that there is more to it than cutting trees and moving logs.

I know you're trying to do a good thing for the neighbors, and make a little money for yourself, but I'd go forth cautiously. I've always found it difficult to deal with absentee owners, especially those from the big city. They are so used to folks trying to rip them off that they assume that everyone else is crooked. I have walked away from alot of timber because I could see alot of problems down the road with the property owners. If you do decide to salvage this timber hiring a third-party, consulting forester wouldn't be a bad idea.

[OLD_ JD]

over here we do 50/50 on saw and venner log,And i pay $10.00 t. on pulpe wood...work fine for both of us ;)

but i have to agre whit Frickman about consulting a forester wouldn't be a bad idea ;)

[Dale Hatfield]

 I think you are taking on 2 jobs forester/ logger.  So if thats the case  charge  em  50 %   for the logging and 15 %  for the forestry work.
No really i think the costs logging and  trucking  are yours  and all will be  fair.

Dale Hatfield

[Jeff]

A forester will earn his % and the return he procides will generally more then compensate for that percentile.  Taking the same % as a forester for the reason that that is what he would make, but not being able to provide the value and experience a  trained  forester will, certainly does not seem like an ethical thing to do.

[Hoop]

Here is what I would do.

Have a signed contract before stepping foot on their property.

The contract specifies: You are to saw logs for grade accordingly.  Arrange for trucking.  Get "Intent to harvest timber" from courthouse.   Arrange & set up forwarder.  Handle any logistics for making a landing, bulldozing, etc.   Sell logs/pulp.

The costs of forwarding should come out of your end.  After all other expenses (trucking/etc) are paid, you & the landowner are to share the remaining revenue on a 50/50 basis.

Yes, you can get a forester.  Why would you want to? Frankly, I see a forester as another expense and it would add NOTHING to the situation.  Obviously, you are very knowledgeable and more than capable of taking on the task. 

[Jeff]

In my post I wasn't really recommending getting a forester, My thoughts were more in the line of why you should not justify taking the same % that a forester would have gotten because one was taking his place.