Stumpage vales, was :Ignorance Tax

Joseph Zorzin redoak at forestmeister.com
Fri Dec 5 06:15:24 EST 1997


Don Staples wrote:

> BOBNWOODS, during a locale sale one of my procurement buddies bid an
> exteamly low price on timber I had for sale, one week prior he bid and
> took a sale for the same amount my sale went for.  When I asked him why
> (my timber was of better grade and volume) he kind of shrugged and said
> "I dont know", walked off shaking his head.  So sometimes it is a matter
> of how you see the tract.
> 

Stumpage markets are impossible to figure out. Probably one of the most
unpredictable of all markets.

For starters, the stumpage BUYER has to worry about his markets; which
may be months into the future and which are very volatile.

And the BUYER wins points with his boss by buying as cheap as possible.
The BUYERS around here bought most of their stumpage direct from
landowners until recently at too cheap a price. Now that consultants are
involved selling for the landowners, the BUYERS can't get such deals any
more so they're under a lot of pressure.

But mostly, because stumpage buyers often don't know what they're buying
because they can't see the purchased item, the wood inside the tree. You
never know what's in that tree until you open it up. I suspect stumpage
buyers don't sleep well at night.

Some landowners still sell with the understanding that payment will
depend on mill tally. This might work out for the landowner if the mill
is honest AND the quality of the wood is better than indicated by
looking at the tree. But it could go the other way. I think selling by
bid most of the time is the way to get the most money, if done smartly-
selling the stumpage during the timber "showing" is an art form like
selling cars- ya gotta know how to do it.

Some consulting foresters around here have tried to manage the logging
job, by hiring a logger and marketing the timber. Many consider this to
be a questionable practice for the forester to get involved with
marketing as it brings in a huge risk factor. I've seen such deals
collapse when the forester failed to market much of the timber, and it
rots on the header- and more than one forester around here has been sued
by their client. I consider this practice professionally OK if the
forester can pull it off. But the talent of being a good log marketer is
one few foresters have, so they need to be carefull experimenting with
somebody else's resource and introducing risk elements- without fully
informing their client.

Another element that loses sleep for stumapge buyers is that some
consultants and even state foresters are a nightmare to work with- just
difficult because of their arrogant personalities- and many landowners
are impossible to please.

I may be aggressive in this forum, but out there in the real world of my
work I'm NEVER a pushy jerk with the loggers- I know how difficult and
dangerous the work is; and how most try very hard to please everyone.
Diplomatic skills are essential for a successful forester, especially
with the loggers; to be fair with them and to get them to come back the
next time.

But still- ya sometimes just can't figure out what they're thinking. <G>



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