By Jim
Griffith
If you have ever sold your timber by the ton
where you are paid as the buyer hauls it from your property, then you may have
found yourself in an unnerving and confusing situation. For anyone who may be
considering selling by this method, often called a cut-&-haul, pay-as-cut,
or per-ton sale, you should be aware that just because a company gives you a
higher per ton bid does not mean you are going to have more money in your
pocket at the end of the sale. This is due to the variance in specifications
buyers may give you for your trees. By specs, I am referring
to the size and quality of the tree being hauled to the mill for a specific
product. Some timber companies give specs in terms of butt log diameter, which
is understood in the industry as being the diameter at stump level. Another
common measurement term used in the timber industry is diameter at breast
height (DBH), which is understood to be 4.25 feet above ground level. When
considering a buyers bid, it is important to note if the buyer is quoting his
mill specifications on butt diameter or DBH. If you are trading at the same
price per ton for the same diameter, the taper in the tree from butt-cut level
to the DBH level of the tree can cost you money. With as much as two inches
difference in diameter between these points of cut on a tree, the number of
trees suitable for the higher value product may be drastically reduced
depending on the varying specs offered by your buyer.
I recently received the following chip-n-saw
mill specifications from four different companies of 10 butt to a 6 top at
25, 10 butt to a 5 top at 33 and 10 butt to a 5 top at 29. A fourth
company gave me specs of a 9 DBH to a 6 top. If there is not a stated
difference in B-Grade chip-n-saw, also called super pulpwood, you might see
specs like 7 butt to a 4 top at 25or 7 butt to a 5 top at 25. This could
make a lot of difference in the value of chip-n-saw removed from your property.
Sawtimber specs can be even more confusing. To choose the best bid, you must understand
the specs on which each buyer is basing his bid. If your high bidder was high
on his bid for each product and his specs were better than the other bidders
then you have an easy decision; but that is a rare occasion in the timber
business. Either their price is going to be high in one or two categories, or
maybe in all products but one, or they are high and their specs are less
advantageous than the others. This is when it gets difficult to make the
correct decision.
To make the decision process even more
confusing, I recently had a timber buyer give me a blended price on the
chip-n-saw and sawtimber. That means he gave me one price per ton for all
combined chip-n-saw and sawtimber that they would remove during the sale. How
do you compare that blended price to separate prices for the products
individually? Whether you sell with blended or separate product prices, it is
important to know what you have. You need to know how many tons of each product
you have in your sale. With this information you can project the final cut
value that each of your timber buyers will be removing. This can also be done
with the percentage of the whole each product makes up if you do not have a full-fledged
cruise on your timber. Either way, you must have some accurate information
about what you are selling to make an informed decision. With the knowledge of
what you are selling, even the blended offer becomes a matter of simple
calculations. But,
there is nothing simple about picking a logger who will merchandise your timber
for the highest value to you, which is another reason you need the assistance
of a professional forester to help you make the right decision. If you are
considering selling your land or timber asset, call your Georgia Farm Bureau
land and forestry experts to help make sure you get the most from your sale!
Contact Jim Griffith at (478) 471-0440.
Jim Griffith is general manager of the
GFB Timber & Real Estate Companies.