Sell by the load, flat rate, or by the ton?

[CrystalRiver1]

I'm curious after looking at some property a relative is selling.
It supposedly has a 70/30 split between Loblolly/Longleaf Pine and some types of Oak.

This is WAYYYY above my paygrade...but I'm interested.
2 parcels, one with 31 acres and another just under 40.
50-plus years of growth located about 150 yards from the highway.
Who happens to have a point of reference or experience with this?

Sell by the load, flat rate, or by the ton?

 

[Bill G]

A ton more information is needed for anyone to even start to answer that question.

 

[davidwyby]

I'm curious after looking at some property a relative is selling.
It supposedly has a 70/30 split between Loblolly/Longleaf Pine and some types of Oak.

This is WAYYYY above my paygrade...but I'm interested.
2 parcels, one with 31 acres and another just under 40.
50-plus years of growth located about 150 yards from the highway.
Who happens to have a point of reference or experience with this?

Sell by the load, flat rate, or by the ton?

Firewood? By the cord.

Logs? Ask @Loony661

 

[Loony661]

I can’t answer about the pine, as we don’t have a market for that where I am in MN, but the oak hardwoods market is all sold around here, by the Board Foot. Land owner and logger usually split the earnings on a percentage (50/50, 60/40, 70/30, etc). Logs are graded, each grade bringing a certain price, and paid out accordingly.

For example:
Red oak Grade 1 = .75/ft
Red Oak Grade 2 = .55/ft
Red Oak Grade 3 = .40/ft

Let’s say you sell 10,000 bd ft of Red Oak and average .59/ft. = $5,900 worth of logs, which would be $2,950 for you, and the logger on a 50/50 split.

 

[CrystalRiver1]

I can’t answer about the pine, as we don’t have a market for that where I am in MN, but the oak hardwoods market is all sold around here, by the Board Foot. Land owner and logger usually split the earnings on a percentage (50/50, 60/40, 70/30, etc). Logs are graded, each grade bringing a certain price, and paid out accordingly.

For example:
Red oak Grade 1 = .75/ft
Red Oak Grade 2 = .55/ft
Red Oak Grade 3 = .40/ft

Let’s say you sell 10,000 bd ft of Red Oak and average .59/ft. = $5,900 worth of logs, which would be $2,950 for you, and the logger on a 50/50 split.

Much obliged!

Just fact-finding right now and musing over the possibilities...

BTW...just connected with an old college bud who retired from the lumber industry.

 

[Bill G]

I can’t answer about the pine, as we don’t have a market for that where I am in MN, but the oak hardwoods market is all sold around here, by the Board Foot. Land owner and logger usually split the earnings on a percentage (50/50, 60/40, 70/30, etc). Logs are graded, each grade bringing a certain price, and paid out accordingly.

For example:
Red oak Grade 1 = .75/ft
Red Oak Grade 2 = .55/ft
Red Oak Grade 3 = .40/ft

Let’s say you sell 10,000 bd ft of Red Oak and average .59/ft. = $5,900 worth of logs, which would be $2,950 for you, and the logger on a 50/50 split.

I always got a chuckle at the guys that wrote bids for "all marketable timber" It was followed by a set price but no volume. In addition they added a codicil for a 50/50 split on all costs of roads and transportation costs.

 

[greystone mountain man]

I can’t answer about the pine, as we don’t have a market for that where I am in MN, but the oak hardwoods market is all sold around here, by the Board Foot. Land owner and logger usually split the earnings on a percentage (50/50, 60/40, 70/30, etc). Logs are graded, each grade bringing a certain price, and paid out accordingly.

For example:
Red oak Grade 1 = .75/ft
Red Oak Grade 2 = .55/ft
Red Oak Grade 3 = .40/ft

Let’s say you sell 10,000 bd ft of Red Oak and average .59/ft. = $5,900 worth of logs, which would be $2,950 for you, and the logger on a 50/50 split.

I usually did 60/40.the last place I logged before I quit,I had about 3 loads left to get out and the land owner told me if I could get it all out in 3 weeks to clear cut it and keep every penny of it.i did it loaded all the equipment up and left,come to find out he was loosing the place and wanted to piss off the creditors.

 

[Loony661]

I always got a chuckle at the guys that wrote bids for "all marketable timber" It was followed by a set price but no volume. In addition they added a codicil for a 50/50 split on all costs of roads and transportation costs.

That’s what’s called a standard “woods run” price. When mills buy standing timber, they offer a straight price for all marketable timber on the property. They of course, bid it on the low side to make up for any rot and defects. The landowner usually sees the “big $$” up front, and takes it. The unfortunate part is, they could have made much more $ on a split with an honest logger.

Splitting cost on dozer work/roads is standard practice too. The logger needs them for the work to be performed. But the landowner gets to keep them for land access. It’s quite fair.

 

[Bill G]

That’s what’s called a standard “woods run” price. When mills buy standing timber, they offer a straight price for all marketable timber on the property. They of course, bid it on the low side to make up for any rot and defects. The landowner usually sees the “big $$” up front, and takes it. The unfortunate part is, they could have made much more $ on a split with an honest logger.

Splitting cost on dozer work/roads is standard practice too. The logger needs them for the work to be performed. But the landowner gets to keep them for land access. It’s quite fair.

Not quite the way it worked out here

 

[Loony661]

Not quite the way it worked out here

What are you referencing, that didn’t work out?

 

[Bill G]

What are you referencing, that didn’t work out?

There is so much to it. I want to be very clear I have no knowledge of your area but in this area things are different than that. A contract written for "all marketable timber" (or trees) is a free license to cut any and all trees they want. Some think that is just the best trees for lumber but they are mistaken. It all marketable trees. Years ago we had a pulp mill here so some could go to pulp. To this day there is a good market for semi loads of scrub firewood logs. You would be surprised what they go for. Of course the good logs go to a standard mill. All marketable timber means whatever the hell they want to cut. There is a place about 6 miles up the river where a company came in and damn near clear cut the entire place. They had a couple feller-bunchers even which are not at all common here. When they were done the land was a worthless piece of chit.

Now on the flip-side a reputable logger will bid the job based on an agreed number and split. No logs leave until settled for.

 

[maulhead]

What are you referencing, that didn’t work out?

Why did you ask him a question.

 

[Wilhelm]

Why did you ask him a question.

Mr. Bill, please clarify Your last post!
Thank You.

 

[Loony661]

Why did you ask him a question.

I almost didn’t..

 

[Loony661]

There is so much to it. I want to be very clear I have no knowledge of your area but in this area things are different than that. A contract written for "all marketable timber" (or trees) is a free license to cut any and all trees they want. Some think that is just the best trees for lumber but they are mistaken. It all marketable trees. Years ago we had a pulp mill here so some could go to pulp. To this day there is a good market for semi loads of scrub firewood logs. You would be surprised what they go for. Of course the good logs go to a standard mill. All marketable timber means whatever the hell they want to cut. There is a place about 6 miles up the river where a company came in and damn near clear cut the entire place. They had a couple feller-bunchers even which are not at all common here. When they were done the land was a worthless piece of chit.

Now on the flip-side a reputable logger will bid the job based on an agreed number and split. No logs leave until settled for.

What you just explained isn’t different from what I described. It’s still a “woods run price”. Whoever the landowner is, saw the dollar signs and signed the contract.. That’s unfortunate for them, and their woods.

I don’t agree with that practice, and don’t log that way because of it.

 

[Bill G]

Mr. Bill, please clarify Your last post!
Thank You.

What would you like to know? The "all marketable timber" contracts here are a sham.

 

[Bill G]

What you just explained isn’t different from what I described. It’s still a “woods run price”. Whoever the landowner is, saw the dollar signs and signed the contract.. That’s unfortunate for them, and their woods.

I don’t agree with that practice, and don’t log that way because of it.

The guy that was writing those contracts here ended up down-state. Your experience of course is different