 Appraisal Services
Timber Appraisal Services
Timber appraisals are needed for a variety of reasons. Among them:
- estate planning
- to settle an estate
- for a property purchase or sale
- collateral loan purposes
- investment planning
- for selling timber
This by no means is an exhaustive list but it certainly is reflective of why most land owners have an appraisal made. In order to make a timber appraisal, an inventory of the timber resource is needed (see the “Timber Inventory” section of this site for more information on inventory). After estimating the quantity of merchantable timber in a given area, we are often asked for a value. The factors to be considered in estimating the value of timber in a given setting includes, but is not limited to the following:
- Species- some species (like Black Cherry) are more valuable than other species
- Quality- is it grade 1, 2 or 3? Is there some veneer (usually less than 10%)?
- Access – road conditions/road frontage v. Right-of-way access
- Quantity- is it a large (500MBF) or small (10MBF) sale?
- Average Size (diameter)
- Topography Stream/pipeline crossings Need for gravel/culverts
- Length of time to remove (if selling)
- Conflict with other users or Seller imposed conditions –no logging during hunting season
Logging costs- besides the items mentioned above, it is imperative to keep in mind that it costs money to move equipment to a job to build roads, landings, install stream crossings, perform final logging road restoration, etc. It also costs the timber company money if, when selling timber, non-commercial trees are marked for harvest. Girdling and/or felling of non-commercial trees adds a cost to the logging operation that will be leveraged against the final bid price offered by the buyer. It costs any company the same amount to mobilize a harvesting operation for 10,000 boardfeet as it does 1,000,0000 boardfeet of timber. In addition to site specific factors, there are macro factors that must be considered: “The Market”- is it robust or is there a shortage of supply; is it “mud season” or dry logging conditions? These factors weigh heavily into how much a company would be willing to pay for stumpage (standing timber). Timber located off a road that will be posted to an 8 ton weight limit in Spring will not bring the same value as the same timber located along a State or County highway if being sold in late winter. Just as real estate is appraised under the “location-location-location” factor, so too is timber. Export market-when exports of timber are moving well the price in the marketplace is generally favorable to the landowner. Export markets generally open in late September and close before the typical dry heat of summer in the U.S. It costs money to keep logs moist so that they don’t check-crack, thereby reducing the log volume. Whether for inventory, planning, or sale purposes, all of these factors must be considered before arriving at an estimate of timber value. Understanding the relationship between these factors and how they affect your final timber value is our job. Call us for more information or to get your timber appraised.
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