timber offering

Michael Hagen mhagen at mail.olympus.net
Sun Oct 26 16:57:05 EST 1997


jim wrote:
> 
> In our small firm here in WA, we require 10% of the bid to be enclosed with
> the bid.  As far as where the break line is where people start loosing
> interest, we think it's at the same point where the big guys don't bid
> because of  low volume and the little guys become interested because the
> volume fits them well.  We also find that lenders, weather it's a lending
> institution or mill backing the buyer, will work with the small guy as well
> as the big guys.  It all depends on how resouresful the interested buyer
> is.
> 
> Jim Frost
> Grapeviw, WA
> 
>Here on the Olympic peninsula logging is just beginning to get back on its feet after nearly ten years of depression. The game has become one of liquidation of the 35-50 year age class on industrial lands and a hunt for the wiley red cedar in any joe's back yard. 2nd growth Cedar peaked at 1300$/MBF in July. A small logger worked his way over the mountain I live on last summer, splitting the profit on the many loads he got from semi-rural five acre parcels. Sharp owners got 50%, the rest got much less. Rough landscaping was offered as trade. They've all got scattered Alder with big burn piles now.

Around here the big guys used to give every sale a shot and depending on
whether there was a ship to fill, stumpage often went higher than
appraised. They made their money back on the export sales or when the
market bottomed out.

Coastal WA is a bit different than the rest of the northwest in that
most wood is for export, whether as logs or chips. There are a half
dozen active exporters here although total shipping is a fraction of
that during the eighties. This year the former ITT Rayonier paper mill
shut down. It's now being demolished leaving one large local pulp mill
and a chip exporter. There are few sawmills left in the coastal
mountains. I can pass by the rusting hulks of at least four on the five
mile trip to town. It's hard to tell because here small sawmills were
pretty informal and thrown together out of the fragments of the previous
mill on the site. The ones that are left were well placed
geographically, to intercept the low grade logs before a long and
expensive haul to the port dock. 

A recurring problem that consultants face is competion from loggers,
company procurement agents and free "agency" foresters. It's hard for
the average landowner or even municipality to pass up "free" foresters.
The abysmal condition of most non-industrial second growth shows that
for the most part, they got what they paid for. 

Yep.
Mike H.
Port Angeles WA.




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