Timber Price Trends – What’s My Timber Worth?

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Big Oak Like This is Always in Demand

Big Oak Like This is Always in Demand

The most common question I get when talking with landowners is “what is my timber worth.”  Well, that depends.  I hate the question because every time I do a cruise the landowner wants a value, or worse yet, they want me to walk through the woods and spout a dollar figure without having to pay for a cruise or a mark and tally job.

The answer, as in real estate, is “What a ready, willing and able buyer is prepared to pay for it.”  The fact is, any estimate of value I give for timber is an educated guess.  I use what amount I generally have been getting for similar timber and can come pretty close to reality.  Sometimes, I am too high, sometimes too low.

Also, the amount a buyer will give depends on several factors including: quality of the timber, what species mix it has, size class, accessibility and operability of the land where it is located and whether the mill is short on logs.

A recent Timber Market Report put out by Penn State can be found here: http://extension.psu.edu/natural-resources/forests/timber-market-report/reports/2013/2013-4th-quarter or just type PSU TMR into your search engine.

This is a good starting point but there are some caveats that you have to watch out for.  One is that the TMR relies on the reports from questionnaires sent to sawmills, loggers and foresters.  There are very few responses, so the sample size(n) is too small to be significant.  Also, everybody has there own motivations for exaggerating one way or another.  I use it as more of an indicator of trends than real numbers.  The third thing to keep in mind is that by the time it is done, it may be old news.  For example, red oak was in demand a couple months ago but recently took a nose dive.  Nobody wants it, so the price has plummeted.  On the other hand, ash and hickory have come on strong recently and is paying very well.  If you have ash dying in your woodlot, you should call me to do a salvage harvest, especially if you see split bark or an orange tint where the outer bark has sloughed off.  In summer, nobody wants to have a large inventory of logs on hand, so prices go down, while in the fall, logs won’t rot quickly if they have to hang on to them for a while so there is less risk involved.

Timber price is driven by demand for boards of that particular species.  The demand is driven by trends in the end user products.  Recently, folks are installing less oak in cabinets and flooring, so the white woods are doing better and oak is down from a decade ago.  I can only get about half of what Red Oak and Black Cherry was going for in the good ‘ol days.  That can be a good thing as these species were getting leaned on pretty hard and were over harvested severely,but pressure has backed off some.

“What about the veneer trees I have”

Well, take a look at the photo at the beginning.  Might be a veneer log – a nice one.  But it might not.  I would rather let the buyer take that gamble.  Often, a mill will count on there being veneer logs that will generate a profit way above what they paid for the timber, and pay too much.  Good for the landowner.  What if the tree has ring shake, stain, is hollow? You can’t tell looking at it.  A veneer log is not a veneer log until the veneer log buyer puts his tag on it and writes the check.  I can always negotiate a good price for good timber, but I can’t create veneer or demand veneer prices for standing timber.

 

 

 

About the Author:

Wildlife habitat manager and consulting forester from Central PA. Studied environmental Agriculture specializing in wildlife management and Forestry. B.S. Agriculture, Masters degree in Forestry. 30 years experience in land investment, forestry and wildlife habitat improvement. Currently working as a Farm Bill Forester for Pheasants Forever on Game Commission and Golden Winged Warbler Initiative.

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