The Timber Market Explained

Ronald D. Wenrich is a sawmill management consultant from Jonestown, Pennsylvania, USA. This Penn State graduate has logged timber, inspected treated forest products, been a mill foreman, procured wood, and is now a sawmilling specialist.

Q: OK, Ron, lets continue. I want to wind up the discussion on lumber prices by asking if they can be predicted?

Ron Wenrich: Not any better than any other commodity. Usually large changes in price are dramatic and short lived when they occur. When changes take place, lumber production is either increased or curtailed; this usually corrects the problem.

But spikes and troughs can be severe and are generally unforeseen. If a mill is caught with too much inventory during a trough, a lot of money is lost. Conversely, if a mill has needed material and the ability to mill it, a lot of money is made.

Sometimes the loss may be driven back to the stump by dropping timber prices. Rarely is the windfall ever driven back to the stump unless the mills need timber immediately.

Q: I am called every day by Alabama landowners needing to know how to market their timber. You are an expert in sawmilling. What do you suggest is the best way to market your timber?

Ron Wenrich: There are three things needed to have a successful timber sale. Adequate access, sufficient volumes, and high quality trees. If a landowner is contacted about harvesting timber, he probably meets those specifications.
Ed. Note: If you are approached and asked to sell your timber it is time to get expert advice.

Whether or not to use a consultant is up to the landowner. However, when trying to make a deal with a timber buyer, the landowner should be well informed. In the very least, a timber owner should seek a second opinion.

Maybe the harvest isn't recommended or shouldn't be harvested the way it is prescribed. If a harvest is to take place, a consultant or other independent party should mark the timber to be harvested and a talley and appraisal provided.

The owner should then seek out interested mills and loggers. It is advisable to get as many bids as possible. If selling privately, a lawyer should be contacted to look over the contract and a forestry consultant should inspect the logging operation on behalf of the owner.

If the forest landowner does not want to get too involved with the sale of the timber, he should get a consultant to handle the sale. He will mark the timber, solicit bids, draw up contracts, and administer the sale for a commission.