If you have some wooded acreage, you probably have thought at one time or another about removing or selling some of the timber off your property. You may have even had a logger approach you to buy your standing timber. When a logger approaches you and offers you a large sum of money for the standing timber on your property, remember that the logger is an expert and you are not.
Often what happens when an expert deals with a non-expert is that the non-expert ends up with the short end of the deal. The logger knows you are not an expert. I am aware of one case in which a logger offered a land owner $70,000 to log property. In this case, after doing his homework and consulting his own expert, the land owner ended up getting $170,000 for the harvesting of some of the timber on his property. It may be that the logger’s offer is a fair offer or it may be that it is not. But how are you to know?
The easiest way is to hire yourself an expert. Find yourself a competent forester before you sign with any logger. The forester can answer your questions. But what questions do you ask?
Tom Jacques of Jacques Forest LLC in Tawas City, Michigan at www.jacquesforest.com lists some of the questions you should ask before you harvest any timber on your property:
- What trees should I remove to improve the quality of the stand?
- What trees are mature and need to come out?
- How much are my trees worth?
- Who should I get to cut the trees?
- What time of year should a harvest take place in order to minimize the impact on the land?
- How much money should I get from the timber sale?
- Will my access roads be usable after the timber sale?
- How long will it take to finish?
- How will I get paid?
- Who will make sure things get done right?
Unless you plan on clear cutting your property and stripping it of all vegetation, the starting point of any timber harvest operation for your property should be a forest stewardship plan. To prepare a forest stewardship plan, your forester will walk your property with a GPS taking an inventory of all your standing timber by species, and noting the general condition of the timber and whether it is harvestable.
The forester will also look at general land features such as uplands or wetlands include them in a detailed map of your property he prepares. Roads, trails and even deer blinds can be included on this detailed map. The forester can then overlay the map on publicly available maps such as the property section map, topographical map, Department of Natural Resources maps, etc. The one nice thing about computers is that the forester can overlay each of these items in layers and remove or add things to suit your needs in as much or as little detail as you want.
As part of the forest stewardship plan, soil samples will be taken in different locations of your property to determine the nature, makeup and suitability of the soils for different types of plantings. An examination of soil productivity can help determine which trees to plant to maximize the fiber production per acre. If your land is used for hunting, the plan could also include suggestions for improvements to your property to make it more favorable for the wildlife which you are hunting.
If you have food plots on your hunting land, the forest stewardship plan can also include a food plot management plan. With detailed record keeping, you can minimize the cost of your food plot planting and fertilizing. You may not need to fertilize or plant every year. This can be a significant cost savings.
Once you have a forest stewardship plan in place, then it opens the doors for lots of opportunities. Firstly it can be the basis for the seeking bids for a timber harvesting operation. Your forester can calculate the amount of board feet of each species that is harvestable and its value. A request for proposal to prospective loggers can be sent out by your forester. Once the bids are in, your forester can assist you with awarding and negotiating the harvesting contract. Your forester can also oversee the harvesting operation to make sure that the logger is complying with the terms of the contract.
To make sure that only the trees that are marked for harvesting are harvested, your forester would keep track of all the trees that are harvested and their value. For example, I was involved in one case in which the logger was supposed to have been harvesting only pine and other softwoods and it was discovered that the logger was also harvesting oak. Unfortunately, the land owner could not determine how much oak was taken. If the land owner had a forester, the forester could have stopped the oak harvest and could have calculated the value to the timber taken.
In your contract with the logger, there should be a security deposit for the restoration of your property after the loggers leave. If the logger fails to remove or break down brush or doesn’t restore the roads to the pre-logging condition, you can then use the deposit to complete the job. You should not have to though. More often than not, if the logger is sent a letter in such cases, the logger will want to complete the job to get his deposit back.
The logger and his employees should have trainings and certifications, including in the areas of fire suppression, all of which can be verified by your forester. You should make sure that the logger has a liability insurance coverage of at least $2 million per occurrence.
With a forest stewardship plan, you may also have grant monies or tax savings available to you. You may be eligible for grant money to re-forest your parcel after the timber harvest. Since you now have a detailed description of your property, it may be of interest to non-profit organizations such as the Nature Conservancy for tax deductible conservation or open-space easements that could also possibly reduce your property taxes. You may also be eligible for the qualified forest tax program which could exempt your woodlands from the 18 mil school operating taxes just like your homestead.
So before you get tempted to accept a seemingly generous offer from a logger to harvest timber from your property, contact a qualified forester. Knowing what you are selling, what it is worth and how to harvest can protect your woodlands for generations to come.
By: Matthew M. Wallace, CPA, JD
Published edited June 5, 2011 in The Times Herald newspaper, Port Huron, Michigan as: TIMBER! Do homework before cutting deal with loggers