Forest Products Archives - The Timberland Investor

In the world of timber, not all species of timber are created equal. Every species of tree (and in fact every individual within a species) has unique characteristics that make it more suitable for certain market uses than others. As a result, there are types of trees that are worth considerably more money than others. While the question of which trees are worth the most is ultimately dependent on ever-changing market conditions, the most valuable species of timber in the US are generally black walnut, black cherry, white and red oak, and sugar maple. However, these are only the most valuable by unit of volume (value per cubic foot). Other species of trees, such as spruce, fir, and pine, are worth less per unit, but produce more volume per acre, making them worth more over time on a given acre. In this article, we will discuss the nuances in value as it relates to species and the quality and quantity of tree growth. First, however, let's discuss exactly what is meant by the value of a tree. What is the Value of a Tree? Trees have many values. They can provide shade in the summer, add beauty to the landscape, and even bear fruit from which we can make delicious pies. While these are certainly values, they are difficult if not impossible to quantify. Thus, in the world of timber, we generally value trees for their use in consumer products (with other considerations, of course). That can still be rather complicated, as a tree can be defined by any of three main values: stumpage value, log value, and lumber value. Stumpage value refers to the value the landowner receives for selling the right to harvest the timber. This represents a the value of a tree in its most unrefined state. Log value refers to the value received for cut and processed logs delivered to a sawmill. Finally, lumber value refers to the total potential value of lumber that can ultimately be sawn from a tree. Because stumpage represents the value of a tree in its most basic form, this is the value we will be focusing on when we answer the question of which trees are worth the most money. To learn more about stumpage, you can visit this page. The Value of Commercial Timber Species Below are typical ranges of the most important species of timber in the United States per MBF, or thousand board feet. To learn more about what MBF represents, we have an article on the subject here. Clearly some species are worth a lot more than others, so let's look at some of the most valuable species and their characteristics that make them valued. Black Walnut Black walnut is one of the most valuable species of timber in North America, prized for its rich color, beautiful grain patterns, and durability. The wood's color ranges from light brown to deep chocolate brown, and it's hard, heavy, and strong, making it ideal for high-end furniture, cabinetry, and flooring. Black walnut trees grow slowly and are relatively rare, contributing to their high value. While most other trees can be found as a primary or secondary species within a forest, there is no such thing as a "black walnut forest." Instead, the species is found only as sparce individuals throughout hardwood forests in the central US, often on the edges of woodland. Overall, black walnut comprises only around 2% of all hardwood supplies in the US. To learn more about the value of black walnut, we have a whole article on the subject here. Black Cherry Black cherry is another valuable species of timber known for its warm, reddish-brown color, and attractive grain patterns. The wood is durable and resistant to decay, making it ideal for high-end furniture, cabinetry, and flooring. Black cherry trees grow relatively slowly, but they are more widely distributed than black walnut trees, making the wood slightly more accessible. However, the best quality black cherry trees worth the most money grow in a relatively small are in New York, Pennsylvania, and West Virginia. To learn more about the value of black cherry trees, we have an article on the subject here. White Oak White oak is one of the most commonly used species of timber in North America, prized for its strength, durability, and resistance to decay. The wood's light to medium brown color and distinctive grain pattern make it popular for flooring, furniture making, and outdoor applications like decking and fencing. White oak grows relatively quickly and is widely distributed across North America, making it more accessible than black walnut or black cherry. The wood is hard, heavy, and strong, but it is also more workable than black walnut or black cherry, allowing for a wide range of applications.To learn more about the value of maple trees, we have an article on the subject here. Red Oak Red oak is another common species of timber in North America, known for its strength, durability, and distinctive grain pattern. The wood's light to medium brown color with wide, prominent rays make it ideal for furniture making, flooring, and cabinetry. Like white oak, red oak grows relatively quickly and is widely distributed across North America. The wood is strong, hard, and heavy, but it is more porous than white oak, making it less resistant to decay. Yellow Birch Yellow birch is prized for its attractive light to medium brown color and distinctive grain patterns, as well as its cherry-colored heartwood, often referred to as "fire birch." The wood is hard, strong, and durable, making it suitable for high-end furniture, flooring, and cabinetry. Yellow birch trees grow relatively slowly and are distributed across North America, but they are most common in the Northeastern United States and Canada. Yellow birch wood is also popular for its resistance to wear and tear, making it ideal for heavy-duty applications like tool handles and machinery parts. Overall, yellow birch is a versatile and valuable species of timber that is well-suited for a range of applications. Sugar Maple Sugar maple is a highly valued species of timber, prized for its light to medium brown color and beautiful grain patterns. The wood is durable, hard, and wear-resistant, making it ideal for high-end furniture, cabinetry, and flooring. Sugar maple trees grow relatively slowly and are distributed across North America but are most common in the Northeastern United States and Canada. Sugar maple is also highly valued for its tonal qualities, making it a popular choice for musical instrument makers.To learn more about the value of Maple trees, we have an article on the subject here. Quality Trees Are Worth More Money. Just because a tree is a high value species does not mean that every individual from that species is also high value. The value of a tree is highly dependent on quality. Trees that are higher quality yield considerably more money than low quality, sometimes as much as 10x. High quality trees are larger, straighter, have fewer branches around the stem, and few defects. Size To be milled into boards or used for other products, trees have to meet certain size requirements. Obviously, you can't mill a 2x4 from a twig, but to mill a 2x8, you need an even larger tree than to mill a 2x4. Thus, the larger a tree is, the more gross volume and and market potential it carries, and the more valuable it is. You can see this relation between size and value in the chart below. When trees are young, they can be only be sold as pulpwood, the lowest value product, but as the tree grows, it gains value as it incrementally qualifies for use in higher value products. The highest quality product class, known as veneer, is only made from the largest logs. Of course, small trees aren't necessarily worthless. In many cases, they still represent tremendous value. They simply need more time to grow! Sweep Sweep in a log creates a lot of problems in the manufacturing process. First, it tends to create warps, deformities, and weakness in the wood, but second, the deflection of the log reduces the yield, as it limits how much wood can actually be milled. Thus, mills often make deductions for logs with sweep and grade the logs lower, making straighter trees more valuable Branches Branches play a considerable role in determining the value of a tree. They create knots and other defects that can greatly reduce the aesthetic quality and thus value of wood. The highest value trees will have few (if any) branches along the main stem, and branches will have self-pruned at a young age, preventing the presence of knots throughout the majority of the wood. Defect Defect comes in many forms. It can be rot, cracks, seams, bulges, and more. Regardless of its form, defect always reduces log grades and can often prevent a log from being used as anything but pulpwood. Less defect is always desirable. Comparing the Value of Three Stem Forms To better understand the idea of what makes a tree high value, let's examine three common stem forms. Stem form one represents the highest value stem. Not only is the bole straight, but the portion of the stem that is free of branches or defects is long, allowing several high-grade logs to be cut from the tree. Stem form two is also straight, but the clean portion of the stem is substantially smaller than stem form one. It is still a high-value stem, but it will likely only yield one log instead of several, so the total potential production is stunted. In contrast to the first two, stem form three is very low value. Like stem form two, it branches off at a low height, but even on the branch-free lower portion, the stem is crooked and appears to have a substantial bulge or defect. Thus, the first log wouldn’t be able to be sold as a sawlog and would be relegated to the lowest-value product class–pulpwood. Trees of such quality are worth little money. Considerations of Quantity So far, we have discussed the highest value species and how their value relates to quality, as these are the most important considerations when determining the value of a single tree, but viewing the question this way may belie the most important aspect of timber management: quantity. Take black walnut, the most valuable species of timber. Black walnut is sparce, and it is seldom a major component of any woodland. Even if those trees are high value stems, the contributions of black walnut to the total revenues of a timber harvest are likely to be small. The bulk of the revenues would still come from the oaks, maples, and cherry that inhabit the same woodlands, so is black cherry really the highest value tree? This is why softwoods like pine, spruce, and fir are often the focus of the commercial timber industry despite having a significantly lower per-stem value when compared to hardwoods. Softwoods grow much more densely and more uniformly than the highest value hardwoods. They also grow significantly faster. Thus, over time, and over a given acre, softwoods tend to be worth the most money, despite having a low per-tree value. Which Trees Are Worth the Most Money Is an Evolving Question Like all markets, the forest products industry is constantly changing. Prices change continuously, and markets evolve. Today there are new markets for certain species that did not exist just 10 years ago, and economic disruptions like what occurred in 2008 and more recently in 2020 caused dramatic swings in prices (both upward and downward) for virtually all species and products. Thus, maximizing the value and production of your woodlands requires both an understanding of markets and value, but also an appreciation of diversity to help balance the unknown. Over a long enough period of time, the diverse forest will produce the most value.