This is part two of a two part blog series: Estimating Volume and Value of Standing Timber
Estimating the value of a tree while it’s still standing is a challenging task. While figuring out how much volume the tree contains is fairly straight forward (and explained in this linked blog article), determining its value is much more precarious.
Not every tree is created equal. Some are straight and limbless for long spans while others are crooked and have many limbs in the first 8 feet. There are even possible defects such as hollow centers or mineral stain that are often impossible to detect while a given tree is still standing. For this reason, within a given species, there is potentially a very wide range of values.
First Estimate the Volume
The easiest step of this process, and one of the most important factors to be considered when assessing the value of a stand of timber, is estimating the volume of the individual trees. Estimating tree value is explained fully in this blog article. If you don’t feel like reading the article, you can count on mature trees (20+ inches in diameter at chest height) to contain on average between 250 and 500 board feet each, depending on their height. Roughly speaking, a mature tree is big enough that you can’t, or almost can’t, wrap your arms around it (NFL wide receivers aside). If your woods has a lot of these trees, it is probably ready for harvest.
Since timber is sold by the board foot (a volume measurement equal to 144 cubic inches), the board footage you harvest is the single most important factor in estimating the value of your standing timber. The more volume you have that is mature and ready for harvest, the higher the sale price will be.
What Species’ Does Your Woods Contain?
After the volume of a particular tree, the second most significant factor in the value of a timber stand is species composition. Is that tree Black Walnut? White Oak? Red Oak? While prices change over time due to market trends, the highest value timber in the Ohio, Indiana and Northern Appalachian region is consistently Black Walnut, followed by White Oak. Other valuable species’ include Hard Maple, Hickory, Tulip Poplar, Oak species included in the white/ red families such as Black Oak and Chinkapin Oak, as well as other regional hardwoods. In general hardwoods tend to be more valuable than softwoods though this is not because they are necessarily actually more dense.
The species composition of your woods is going to depend mostly on where in the world you are. Tree varieties tend to grow along latitudinal lines. The good news is that the our region produces some of the best hardwood timber in the world—if you have a mature woods in this part of the country, it certainly has some real value.
Common Regional Hardwood Timber Gallery
If you need some help deciphering the species of the trees in your woods, take a look at the gallery below. Each thumbnail opens an infographic explaining the most common hardwood species’ found in the Ohio, Indiana and Northern Appalachian regions including their bark, foliage, typical form and other distinguishing characteristics. You may also consider investing in a paperback field guide, readily available for under $10 at your local bookstore.
Let’s Talk Timber Prices
Now that you’ve compiled a list of the trees you think are ready to harvest and determined approximate board footage on each species, you’re ready to get the calculator out. This is where the process gets a bit complicated. Trees of different grades command widely varying prices. In assessing the grade of a standing tree, a forester must consider both visible and possible invisible defects—some trees that look beautiful while standing are hollow inside; others have mineral stain due to soil composition factors or past livestock grazing. These deficits, indiscernible while the tree stands, will negatively impact the value of your timber and are often difficult to discern.
However, you can get a good idea of the range of possible values for your standing timber. For this, we turn to The Ohio State University’s Stumpage Price Report. This annual publications lists, by regions of the state, the mean, median and range of prices for various grades of the most commonly sold hardwood tree species’ in our state. Similar documents are produced by most state university agricultural departments and/or by the department of natural resources in your region.
When You look at this sheet you’ll notice grades along the left column. For each species prices are listed for prime logs, number 1 common, number 2 common, blocking with an average for all the different grades combined at the bottom of each section. What you need to know is that these grades correlate with the quality of the lumber that can be cut from a tree, and therefore the value of said lumber.
Prime grade logs will produce mostly FAS lumber (the highest grade) that is well suited for furniture and cabinets. Truly exceptional logs may even be used for veneer. By contrast number 2 common logs are destined to become railroad ties and pallets. This drastic difference in possible uses explains why some logs are worth so much while others would be better used for firewood than lumber.
The main factor assigning the different grades is the number and size lower limbs on the standing tree. In other words, the longer up the trunk a particular tree stretches without limbs or locations where limbs once anchored, the higher its grade will be. A tree without limbs for the first 16 feet will likely produce two 8 foot prime logs. Further up the tree will be number 1 and number 2 common. You see, each tree will produce several different grades of logs, the quality of which declines proportionately up the trunk toward the canopy.
If you’re woods has been responsibly timbered in the past, and some time has passed since it was last harvested, you likely have a high number of harvestable timber. Still, no timber harvest will contain only prime logs, so for estimation purposes you will likely get a more accurate estimate with average numbers verses the high end values. Using the mean figure for number 1 common logs or the low number from the prime range tells you the approximate value of your standing timber. Another strategy is simply to take the mean number for the “All Grades” entry of the table—the larger your woods the more likely this number is to be accurate. Both options will be used in examples below.
Timber Valuation Example
The numbers in the timber pricing report are per 1,000 board feet. For each species divide the number of board feet you’ve estimated by 1,000 and multiply this by the appropriate price from our report.
Lets say you estimate the volume of your stand of mature White Oak to equal 10,000 board feet. One estimate of its value can be found by multiplying the mean reported for no. 1 common White Oak (425 for Spring of 2012 and 482 in the Fall) by 10 (10,000 board feet divided by 1,000). So you’re White Oak is likely worth about $4,250. Using the second strategy from the paragraph above you would multiply 10 by the “All Grades” mean value of 567, equaling $5,670. Repeat this process for each species you have tallied and you should have a ball park estimate of what your timber is worth.
As you can see, coming up with an exact dollar amount for a tree is difficult. Though part of the proper stewardship of a forest involves continual assessment of the health and maturity of the trees, for non-professionals with large stands of timber the task can be daunting.
Ask the Experts
Timber Works explains every step of both the assessment and the logging processes along the way. We make timber harvesting recommendations that consider the unique characteristics of your woods, and address the input and concerns from you, the land owner, above all others. We never pressure customers to sign contracts prematurely and we never include ambiguous language about the scope and details of a harvest in the agreements we do make. Timber Works works diligently to ensure your questions and concerns are addressed fully and honestly.
1. Estimate the volume and individual species’ footage in your timber stand.
2. If you can wrap your arms around a particular tree (excluding professional athletes) it might not be quite ready to harvest, though this depends in part on species and other conditions.
3. The more mature trees you have, the more likely it is that your timber is ready for harvest.
4. To estimate the value of your timber, take the volume, divided by 1,000, and multiply it by the price quoted in your states standing timber stumpage report.