A Successful Timber Harvest in Morgan County
By Liz Jackson
Jim H, of Morgan County had discussed with his forester that it was time to have a timber sale on his property. Some of his trees were overmature and the ash was beginning to decline, so the timing was right. Jim told his forester that he wanted the process to go as smooth as possible, but he wasn’t sure what he needed to do since he had never had a timber sale before. After some discussion about what to expect, he hired a professional forester to manage the timber sale on his behalf.
The timber sale was a success. He received 5 bids on the timber with a range of $15,000 between the high and low bids. After accepting the highest bid, the logger completed the project over the next 18 months. Although he could definitely tell that the land had been harvested, the results were expected and soon the openings were filling up with new tulip poplar seedlings and a start for the next generation of trees.
Jim learned a lot of things on this sale to make it go smoothly, things he wasn’t aware of when he started the process. Some of his neighbors had had very bad experiences and had vowed never to harvest again. Although they understood the potential benefits to the woodlands it wasn’t worth the hassle. Jim offered to share his experiences with other landowners who have had a less positive harvesting experience or who haven’t yet had a harvest.
Ask for advice
• Contact Call B4 U Cut at 1-317-232-4111 or at www.callb4ucut.com for “A Landowner’s Guide for a Successful Harvest.”
• Talk to a trusted friend, family member, or neighbor to give you the low-down on what to expect. Ask them to describe the process and anything they would have done differently. Ask them what the woods looked like when it was done.
• Ask your IDNR district forester for their input on what to expect and the steps to proceed.
Consult a professional forester to assist you in the timber sale. A forester can provide general advice, mark the sale, or handle the sale from start to finish. Make sure you have a clear understanding in advance of what the forester will be doing and any fees for services. Ask for references and a price quotation. (See How To Choose a Forester from the Spring 2014 issue)
Know your boundaries
Timber trespass is a common complaint, resulting in lawsuits and possible fines, and is usually due to not knowing the locations of the property lines. Are your property boundaries known and marked clearly? If not, locate the boundaries and mark them before the timber is marked for harvest so there is no confusion which trees are yours and which are your neighbors.
Do your neighbors agree with the boundaries? It would prevent disagreements if you walk the boundaries with your neighbors and make sure you are in agreement on their locations before the trees are marked. Discrepancies are best identified and solved before the trees are cut. If there are any trees on the property line it would be smart to clarify who owns them. After the lines are confirmed, mark them clearly with posts and/ or paint so that the timber buyer and logger can be certain where the line is and you can find it in the future. These steps will prevent the logger from accidentally harvesting your neighbor’s trees. It is best to mark property lines permanently once they are established.
What trees are you selling?
It is helpful in a sale to not only mark the trees on the trunk at about eye level, but to also mark them just above ground level, so that you can see the marks even after the harvest. You should also have a complete tally of marked trees by species, so that you know how many of each species is to be harvested. This way you as the timber grower know exactly what is to be harvested before and after the harvest.
Consider the type of sale: lump sum versus shares
In a lump sum sale the volume of harvest and price is agreed upon in advance and often some or all of the purchase price is paid in advance of harvest. This provides certainty to you as the seller that you get what you expected to be paid before the harvest. The lump sum sale secures payment for the landowner, but it increases the risk to the buyer as to their profit since they cannot see what is really inside the trees until they are cut, so they may take that into consideration when they are making their bid.
When selling on shares, you receive an agreed upon percentage of what the logger receives when he delivers the logs to the mill. With this method, your income will not be clear in advance and could vary if market prices rise or fall. You are not paid until after the logs are already at the mills, so there is higher risk for you and less for the buyer when compared to lump sum sales, as you both are splitting what the mills have paid for the logs. Reduction in log value due to felling damage is another risk that you accept in a shares sale. One important question to consider is how the value of the logs purchased by the mill will be documented for the landowner.
Advertising the sale
Advertising a timber sale can help bring more buyers for your timber which, depending on the quality of timber involved in the sale, can increase bid prices. If you are utilizing a professional forester, that person will likely have several ways to let the timber buyers in Indiana know that your timber is up for sale. They usually will have direct mailings to buyers in that area. They also have the Timber Buyer’s Bulletin that goes out to timber buyers monthly in which they can advertise your timber sale for free.
Use a contract
No matter the type of timber sale, a written contract is strongly recommended. This provides you legal protection and clarifies expectations in case of confusion or disagreement. The contract terms should include the sales price, or shares for seller and buyer, and terms of payment with a description of what exactly is being sold. It should also include a description of the best management practices (BMP’s) that you expect the logger to use. Proper use of BMP’s should minimize the impacts to your soil and water quality. More information about what to include in a contract may be found in Purdue Extension publications: Marketing Timber and How to Get the Most From Your Timber Harvest. Both publications can be downloaded for free from https://ag.purdue.edu/fnr/Extension/.
Other contract terms might include responsibility for excessive damage to trees or roads during logging, and how the logging job will be closed out. This might include seeding the log landing and log roads, piling cutoffs near the road, or other requests you might have. The use of a contract will ensure that neither you nor the logger have surprises due to a misunderstanding later on. Reviewing each point of the contract with the logger prior to signing will also reduce misunderstandings.
What Else?
There are many other things to consider and do once the harvest has begun. Do you watch and keep records of what you see, the types of trucks that haul out the logs and how many logs they are carrying? Do you get to know the crew a bit and interact with them some? Do you make sure that your forester is representing you throughout the harvesting process to include closing out the site? (Note: always consider safety when on an active logging site.)
There are many instances in which a landowner, whether ready or not, sold their timber without utilizing the precautions mentioned to protect their interests and regretted their actions once it was too late to change them. Landowners should consider these points now, even if you are not ready to sell your timber yet.
Questions?
If this article has you thinking and you have questions, ask the Woodland Steward at http://www.inwoodlands.org/ or the Indiana Forestry and Woodland Owners Association (IFWOA) at www.ifwoa.org or the Indiana DNR Division of Forestry at http://www.in.gov/dnr/forestry/.
Liz Jackson is the Engagement Specialist for the Hardwood Tree Improvement & Regeneration Center, Executive Director of the Indiana Forestry & Woodland Owners Association, and the Executive Director of the National Walnut Council.