Timber Sales Archives - Page 2 of 2 - The Timberland Investor

Assessing timber values is paramount to successful timberland investment. Unfortunately, timber value is a highly variable and relative measure, so it can be difficult if not impossible to give a definitive answer to how much an acreage is worth. That said, we can make reasonable estimates if we narrow the question down by species. How much is an acre of spruce worth? Assuming a decently stocked, mature stand of spruce, the value of standing spruce timber on an acre of land is worth about $1400. However, this is only a ballpark estimate, and one should consider all relevant factors in their situation. In this article, we will discuss these factors and how you can better assess the value of standing spruce timber. Keep in mind as well, these numbers are only for the value of the standing timber, not the underlying real estate. Determining the Stocking of Your Acreage The primary determining factor for how much an acre of spruce is worth is the stocking on the given acreage. Stocking refers to the amount of standing timber on the land, and it is usually expressed as volume per acre. The most common method for finding volume per acre is deriving it from volume tables using basal area per acre. Basal area per acre refers to the total amount of square feet in an acre taken up by logs across a horizontal plane. Below is a table of volume per acre for softwood stands as a function of average tree height and basal area per acre. You can use it to find the most accurate stocking for your particular parcel. If you are unsure how to find BA/Acre, we have an article on the subject you can find here. Otherwise, a good rule of thumb is to use 50 for younger and less dense stands, 70 for average mature stands, and 100 for dense, mature stands. For reference, the photo below is a stand of Norway spruce with about 50 square feet of basal area per acre (and about 80 feet tall). Finding the Stumpage Value of an Acre of Spruce After you find the volume, the next step is to assess the value of that volume. This can be done by researching stumpage prices. Stumpage is the money paid to the landowner for the right to harvest timber. For most landowners, this is their financial return, and it is the best way to assess the value of timber on a parcel of woodland. So how do you find stumpage value? Lucky for you, we keep a resource of stumpage prices by state, so you can find the most accurate information for your area. Proper Conversions You may notice that stumpage prices for spruce and fir in your state are expressed in "MBF," or thousand board feet. Such is the case in Maine stumpage price reports, as you can see below. This is a unit of lumber volume inside a log, with a "board foot" representing a green piece of lumber 12"x12"x1". It is an excellent measurement for scaling and selling logs. Unfortunately, MBF is not often used in stocking measurements, so some conversions will need to be done to more accurately assess the value of an acre of standing spruce. Like many units in forestry, it can be difficult if not impossible to convert units perfectly, but a good rule of thumb is that there are 200 board feet in every ton, so it would take 5 tons to equal 1 MBF. Prices per MBF from Maine stumpage reports Once you do the proper conversions, it's easy to calculate the value of your standing spruce. If you want a better explanation for what MBF means and what it represents, we have a write up on the subject you can read here. Factors That Will Affect Value of Standing Spruce Timber Both the volume per acre and the stumpage value are averages based on real data. In the case of volume per acre, the numbers are likely to hold true across a diversity of conditions and domains. For stumpage values however, which again represents the return to the landowner, numbers will differ drastically. While there are many factors involved, the two main ones are the size of the wood and the distance from the mill. Size Volume itself is a limited metric. You can have 50 tons an acre of small 3" thick trees packed as tight as sardines, but in such a situation, the timber would be virtually worthless because no boards could be produced from the small timber. Even if it were to be used as pulp, it would take loggers and the mill a lot of effort and expense per stem to recover not a lot of usable material. While such a situation may be a bit of an exaggeration, it does represent a real phenomenon. In general, larger wood is cheaper for both sawmills and loggers to process on a per unit basis, and so larger wood is going to yield the landowner a higher return--higher stumpage. The relationship between stem size and logger productivity can be seen below: Distance From Sawmill The other major factor in determining how much an acre of spruce is worth is how far that acre is from the mill that buys the log. Logs are heavy and cumbersome, and so trucking is one of the largest expenses in forestry. The further an acreage is away from the mill, the more cost will be sucked up by trucking, and the less return the landowner will receive. As such, shorter distances mean higher timber value. Timber Value is an Inexact Science The forest is anything but regular and predictable, and timber prices, as well as a host of other forest economic issues, tend to reflect that reality. However, with proper considerations, you can make a useful, educated estimate as to the value of timber you own or are looking to purchase. Hopefully this article helps you do just that.