Many different factors affect the financial outcome of a timber sale. To name a few: timber volume, quality, species, and size; proximity to market; site characteristics (e.g. slopes and soil type); seasonal restrictions; variation in stumpage prices; harvest unit size; and silvicultural prescription. Many landowners have very limited experience selling timber, because they do it only once or a few times in their lives.
Before you sell your timber, always consult with a professional forester. A forester can help you understand complex factors that may have a huge impact on your sale. A forester can also help you plan the harvest, advertise your sale, obtain competitive bids, select a logger, and prepare a harvest contract.
There are several ways that timber is commonly bought and sold. Different foresters and loggers prefer different methods. As a seller of timber, you should be familiar with each of the different systems:
- Lump sum. On a lump sum sale, the purchaser and seller agree in advance on a fixed sum of money to be paid for the marked timber. It is difficult to precisely predict the volume and value of timber to be harvested. A lump sum payment reduces the landowner’s financial uncertainty, shifting the risk to the purchaser. The purchaser bears risk (or reward) from variation from the expected timber volume and quality. Lump sum sales are common on private woodland sales.
- By scale. When timber is sold by scale, records are kept and payments made based on the volume and type of timber actually removed from the site. Under this system the landowner bears greater uncertainty based on the quality and volume of wood on the site.
- By percentage. If logs are sold at the landing, the logger may take a percentage of the sale value. This is more common on southeastern Minnesota than elsewhere in the state.