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No quick 'n easy formula to assess best market value for timber

No quick 'n easy formula to assess best market value for timber

No quick 'n easy formula to assess best market value for timber

Early spring is the time buyers increasingly approach woodland owners about buying their timber stands. Although there's no magical formula to assess the market value of this timber, owners need to take the time to determine a reasonable value for this forest crop.

Many woodland owners have minimal experience in negotiating the true value of a stand of timber. In many situations, the owner does not intend to sell any trees until approached by a buyer. Then the woodland suddenly has a monetary value, and the owner is tempted to sell immediately-- before the buyer has a change of mind.

Woodland owners shouldn't rush into a timber sale, according to Doug McLaren, Extension forest management specialist with the University of Kentucky College of Agriculture.

"Hardwoods harvested in Kentucky average nearly 80 years in age and retain their market value many years after they reach maturity," he said. "The best advice is to consider all timber management options for the stand. If the occasion arises, market the timber stand rather than just selling it.

"When marketing timber, you don't establish an exact value. Instead, you allow market forces to establish the price by having many timber buyers come in to look over the stand and then bid on the timber. Often the market value is vastly different from the expected value calculated by you or a single buyer," he said.

So how does an owner determine the true market value of woodland timber?

"Bring in a professional forester to help you develop a management plan geared to both your needs and those of the woodlands," McLaren said. "Then decide what would be the best management alternative to meet all these needs."

The plan identifies needed management practices for the woodlands. Some sections might be ready for immediate timber harvest while other areas might need to be improved or planted. The management plan might indicate the need for multiple woodland uses such as a wildlife habitat, recreational uses or watershed management.

"If you decide to market a mature stand, use a professional forester to help determine a reasonable value for the stand and to help with other aspects of the transaction," McLaren said. "The forester's knowledge of woodlands, their products and the market situation can increase your potential income from two to five times."

The procedure owners take to sell a mature stand of timber is similar to selling a home, boat, car or any other valuable item, according to McLaren.

"After you and the professional forester have established a reasonable market value for the timber, take time to negotiate the price based on the market value of the timber. Sell the timber if and only if the price is right," he said.

McLaren said timber buyers solicit timber sales more actively in early spring because wet winters have kept logging equipment out of the woods. Another reason is that local and specialty mills need a continuous log supply for their mills.

Contact Information

Scovell Hall Lexington, KY 40546-0064