Futures?

Joseph Zorzin redoak at forestmeister.com
Mon Aug 31 07:21:06 EST 1998


ForestFair wrote:
> 
> As a landowner, I want my consultant to know something about the markets and
> marketing.

You miss the point. I didn't mean I know nothing about log markets. But
a forester isn't in the log selling business. He's in the stumpage
business. His market is people who buy stumpage- independent loggers,
sawmills, or anyone who says he is interested. THAT IS THE MARKET that I
need to know, not which grade of log should be sent to Canada and which
should be sent to Holland.

Some foresters have tried to cut in on the profits of the log sellers.
This is what they have typically done. They'll subcontract the logger
themselves (as agent for the landowner so the landowner takes ALL the
risk, not himself). Then he'll try to understand the log markets. Then
he'll subcontract a trucker to deliver certain logs to those certain
markets. Then... what almost always happens is that the landowner loses
his/her shirt- and half the logs rot on the landing- because the log
business - around here with so many species and so many markets- is a
specially trade. It almost never works. But the forester gets his fee.
Most professional forester groups consider this to be outside the realm
of a consulting forester's domain of activity and discourage it.

As far as knowing the general market, what counts is to know that the
overall market is up or down, and which way it's going for the
foreseeable future- which is like predicting the weather- almost
impossible.


> 
> I'd also want to know that he/she is inviting bidders who are getting good
> prices, not just loggers the forester is used to working with.

Yes and no. There is a trade off here. Most foresters have stories about
which loggers they've had success with and which were a pain in the ass
to deal with. So they naturally avoid the one's they don't like. I
sometimes hear about some loggers coming in from hundreds of miles away,
staying at motels. Much of the time if not most of the time these guys
are "cut out and get out" types. They can't afford to go slow and do a
good job. Then the forester will have to fight with them about the bond,
often keeping the bond, then fixing the damage. It makes much more sense
to work with people you know. My mailing list for timber buying firms
has about 25 names on it- for people up to about 75 miles away. But I
say that about 90% of my sales go to the same half dozen people. And I
know what the prices should be, over all, if not the individual log
markets. If the high bid isn't what I think it will be, I just don't
sell it. If I think I could get 20% more waiting 6 months then that's
what I'll do, because it's in my interest (getting a percent of the
total for myself). Or, sometimes I'll put right on the bid sheet what
the minimum bid will have to be. Each situation is different. This is
where experience comes in- the guy with the gray in his beard. <G>



> 
> I'd also expect that some silvicultural decisions might be made after
> consideration of market trends.

No. Well, it depends on exactly what you mean. If you have 50 acres of
good hardwoods and 50 acres of pine and the pine market is dead as door
nail, then of course you just don't mark the pine for sale. When species
are all mixed up- you mark the stand based on good silviculture. If you
have a few poplars in there and poplar has zero stumpage value, you
don't leave them for the next rotation- you get rid of them. Once again,
there is no fixed rule on this. And much of the time a forester just
can't really know what's going on out there in the market because around
here there is no single market. One logger might be sending his stuff to
1 mill for a certain price, another logger next door is sending his
stuff to another place and getting 25% more money. There are many
species, many markets, many unknowns. What the landowner wants is also
important in silviculture. If the landowner wants a heavy cut, you give
them a heavy cut, or a light cut. This job is 5% science, 50% art, and
45% politics. They only teach you the science part in forestry school.


> 
> Of course, if I was as wealthy as Joe's Berkshire clients, I wouldn't have to
> worry unpleasant things like money <g>.  But I'm not.

Well, it's funny but... when I'm talking to them about how the job will
be done- the mechanics of it- they emphasize that the critical thing is
to see it done as nicely as possible. When you start talking to them
about the money angle- they tell you that the critical thing is that you
sell it for the best price. duh......

I usually go for the nice looking job because that's what I want- which
is why I live in a slum building which just got bought up by some
yuppies who are going to "gentrify" it, so I'll have to move to an even
scummier place. But "my" forests will look nice and I get tons of good
karma. <G>

-- 

Joseph Zorzin, Yankee Forestmeister
*****************************************************************************
http://forestmeister.com
"Still, after 18 months and counting, the only forestry web page in the
otherwise sophisticated state of Massachusetts, the Athens of the
western hemisphere."
*****************************************************************************
"In wilderness is the preservation of the world."
Henry David Thoreau



More information about the Ag-forst mailing list