Harry Groot compares managing forestland to managing a well-balanced stock portfolio. "You wouldn't sell your best stocks and keep your worst performers for the long haul," says this Virginia landowner. It's the same thing with trees.
When it's time to harvest timber, landowners too often leave it to the loggers. And those loggers will cut the best trees and leave poor-quality trees behind to dominate the stand. Foresters call this common practice high grading.
A well-managed timber stand, where mature trees are harvested and young trees are growing rapidly, will increase in value 12 to 15% annually. A high-graded stand, on the other hand, won't pay dividends for many years to come—if ever.
And while you may question the ethics of high grading, it isn't illegal. In fact, some loggers will argue that, given the expense of operating equipment today, they need to extract as much value as possible from a harvest. If harvest is restricted for stand improvement, buyers may not bid as much for the timber.
An alternative to high grading is the "diameter cut." This is where a buyer offers a purchase price that means he can cut all the trees he wants above a specified diameter. But this isn't much better for the landowner. It can still leave a poor stand behind, and the land will take years to recover.
A better alternative for most landowners is to have a consulting forester mark appropriate trees for harvest, saving the best young trees for future forest.
It's a lesson Groot says he's learned. Groot is now a full-time manager of his own forest and does most of his own logging. He selects undesirable or diseased trees, cuts them and skids them out of the woods with a 4-wheel-drive John Deere tractor. He admits, though, he has had a tough time finding a good market for a relatively small volume of low-quality logs. But he's found a way around that.
To get a better price and more market access, Groot and other landowners in his area formed the Blue Ridge Forest Cooperative. This member-owned business is helping Virginia landowners (who own 10 or more acres of timberland) manage and market products to meet sustainable forestry standards.
Landowner's Checklist
The best tree harvest is one that's part of a long-term management plan, explains Duane Means of Arrow Forestry. Means, of New Castle, Va., provides this checklist to help you sell timber and manage a forest for the future:
Set priorities. What are your management goals? Is wildlife habitat important? Are there parts of your property where appearance is top priority? Can you live with a clear-cut if that is the best option?
Know what you have. An inventory is essential to a timber sale. If you don't have time to dig up information on wood prices, you need professional help. Most states have forestry commissions with county foresters that offer free information. But public employees usually can't set up sales. Private forestry consultants are like stockbrokers for timber transactions and provide one-on-one guidance.
Plan for the future. Combine your objectives and your inventory to plan for the big picture. Your goals can be based on personal finances, aesthetics and wildlife.
Protect yourself. Always work with reputable professionals and with written contracts. Define management and logging activities. University studies show that timber sales conducted by professional forestry consultants usually make the landowner more money.
In the market for timberland?
Speculators often buy forestland, sell off the valuable timber and then advertise the property for sale as a "timber investment."
After a "high-grade" harvest, the remaining trees probably won't grow into valuable timber or provide high-quality wildlife habitat.
So if you're buying land as a timber investment or for wildlife habitat, ask for an up-to-date tree inventory from a certified forester. If no inventory is available, take the seller's claims of valuable timber with a grain of salt.
Depending on the size of the property, you can have a consulting forester look at the timber for a day rate. You won't receive a full inventory, but a forester can tell you if there's valuable timber or just picked-over trees.
To find a forester, see Consulting Foresters of America (www.acf-foresters.org)