Stumpage vales, was :Ignorance Tax

Joseph Zorzin redoak at forestmeister.com
Thu Dec 4 20:53:14 EST 1997


Ron Wenrich wrote:
> 
> Joseph Zorzin wrote:
> 
> > BOBNDWOODS wrote:
> > >
> > > In article <347CAE61.A75D62CD at lebmofo.com>, Ron Wenrich <woodtick at lebmofo.com>
> > > writes:
> > >
> > > >I've been struggling with why there is a difference between timber value and
> > > >the price that landowners receive for their timber, especially after seeing
> > > >Don and Bob go around about consulting vs industrial forestry.  Timber value
> > > >should equal log value less logging costs less profit.  But, not all
> > > >landowners receive that.  Is it because profit is exceedingly high?  Is it
> > > >due to a high risk factor? Or is there something missing from the economic
> > > >equation?
> >
> > If the landowner retains a qualified forester, he WILL receive the full
> > value of the stumpage (timber value on the stump).
> 
> Not necessarily.  Mills that don't get the highest price can't pay a high price.
> Consultants never grade trees, largely because most can't.  Do you know what the
> expected yield will be in lumber or veneer?  Basically, a consultant marks the
> trees, measures them, and says I have so many board feet of timber for sale.
> Quality estimates are real fuzzy - such as average for the area.  Then the loggers
> are told your eyes are your market.  No quality or volume guarantees.  15% is rather
> high considering the types of service which are typically offered.  No line work is
> guaranteed (since we're not licensed surveyors).  If there is a tree marked over the
> line, usually the liability is shouldered by the landowner, who can then sue the
> forester.  The consultant does oversee the logging operations, the bidding process,
> and watches out for the landowners interest.  The quality of the estimate seems to
> be lacking to me.
> 

Well, you're out of line with your comment about the 15%; as you don't
know the situation in a particular area or how much time is spent
overseeing the job. My timber sales often last up to a couple of years
which may mean checking out the job a couple times each week for that
long. If all I ever did was sell timber all year long I'd make a
lawyer's income at that rate; but much of the time I'm doing other lower
paying work; sometimes very low paying; but with almost 25 years
experience, I'm worth that 15%, no doubt in my mind. Those who charge
less usual don't last in business; in fact few last in this bussiness.
In my county, 20 years ago, there were several times as many
consultants. Those that couldn't cut the mustard left. The true
forestmeisters remain and most of us are just getting by with barely
middle class income.

Regarding the estimate I would provide; as I've mentioned elsewhere in
this group; I may not be accurate but I'm consistant. And I walk the
loggers/sawmill people thouroughly through the timber. By making sure I
invite everyone who may be interested and thus maximizing the value of
the marketplace I do think I get the best price possible. Regarding
boundaries; I insist on a registered survey OR the landowner must flag
the lines and put in writing that that is his line or HE is responsible
for any problems that ensue.

I agree that most foresters can't grade standing trees. But around here,
the timber buyers are very, very knowledgable in their ability to judge
what's in those trees. They either have been logging for many years or
if sawmill guys, many have worked as sawyers. I encourage them to go
back on their own to look some more as I never try to pull a fast one
over them by "overselling" the quality. I feel I should be making both
the landowner AND the buyer happy with the deal. Around here, and
probably most places, a forester that "screws" a logger in a business
sense will be out of business real quick. You have to be an "honest
broker"- get as much as possible for the landowner while letting the
buyer feel he made a reasonable profit.

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