There’s a commercial value of some sort to almost everything on a woodlot. However, the most financial gain can be found in high-value trees. These highly sought after trees can best be described as tall, straight, large in diameter, hardwood trees with no obvious defects to the stem. When successfully harvested, high-value trees can yield profitable high-grade lumber and fine veneer quality plywood.

Product value

When harvesting these high-value trees, it is important to understand product value and the various factors associated with it. Many different types of trees can be harvested, but the value of wood products produced from different tree species varies dramatically.

Woodlands with steep slopes and moist ground can negatively impact logging efficiency that ultimately affects the profit margin for landowners.

About 80 percent of all timber comes from softwood, but the smaller percentage of hardwoods offer the most value. The reason is due in large part to the unique composition of hardwood trees. Hardwoods grow at slower rates than softwoods, which makes them denser. Denser wood is harder, stronger, more durable and usually lasts longer. Hardwoods are also characterized by distinct grain patterns and variations of color, which make them aesthetically attractive. Some of the most recognized hardwoods include maple, oak, ash, beech, sycamore, alder and cherry.

Another important factor in product value is tree size. Trees that are taller and larger in diameter will bring higher sale prices because they have more usable volume. A tree’s volume can be determined by measuring its diameter at the 4.5-foot mark and estimating how many feet up the tree can be used to make board feet. High-value timber and veneer is sold by the board foot, which is a piece of wood that measures 12-inch by 12-inch by 1-inch.

Landowners can have large and desirable tree species, but if the quality of the tree is poor, the product value can drop considerably. One characteristic of quality trees is consistent growth rings. These growth rings are produced when trees have ideal conditions to grow at a constant rate each year. The best way to ensure this is by letting high-value trees reach their full maturity.

Trees that are straight with few branches on the lower portion of the tree are also considered to be high quality. Any deviations to the tree stem such as knots, crooks and sweeps reduce product value because they can weaken the strength of the wood. Logs with small centered hearts and bright white color are also considered to be high quality.

Production costs

The production costs that logging contractors and timber buyers deal with during a tree harvest also play an important part in the landowner’s final profit margin. Woodland size, ease of logging, site accessibility and distance to a processing mill are some examples.

Logging contractors strongly prefer harvesting large volumes of trees with uniform characteristics because it correlates to lower fixed costs per job. Fixed costs are the costs that loggers have to pay regardless of how many hours they use their machinery. These include insurance, interest, taxes, storage and equipment depreciation.

Timber manufacturers will often pay more money to landowners with dry and accessible tracts of land, especially during the wet season.

Loggers favor working on flat, well-drained tracts of land because it allows them to use the most efficient means of tree harvesting. Woodlands that have steep slopes and moist ground lead to difficulties with equipment impacting the harvest rate.

Logging trucks play a key role in tree harvesting by moving heavy equipment in and removing harvested timber out. Narrow, steep or substandard roads often hinder the site accessibility of equipment and logging trucks. Whether it’s finding alternate routes or building temporary roadways, it costs logging contractors more time and money to make the necessary adjustments affecting a landowner’s earning potential.

After timber is harvested and loaded, logging contractors focus on weight and distance. The farther away that harvested timber is from a processing mill, the more the loggers have to pay for gas, thus shrinking their final profit margins.

Market value

Morgan Mellette, a Gainesville, Georgia, resident with more than 30 years of professional service as a forestry consultant, said that the strength of the overall timber market is constantly changing due to supply and demand. He noted that supply can be affected by a number of variables including the willingness of landowners to put their timber on the market, current trends in land conservation that limit tree harvesting, economic conditions and competition from other countries.

Demand relates to the need for finished wood products such as lumber and paper. The timber market is also closely related to the housing market. When the economy is good, people tend to build more houses, which requires more wood.

Logger’s fixed costs per tree are less with larger volumes. This means a larger profit for landowners.

Market value can also be affected by local conditions such as competition, inventory and weather. Timber mills in the U.S. are highly competitive; success centers around efficiency. Proximity of timber to a mill goes a long way in efficiency so mills will sometimes pay higher prices for timber to have lower delivery costs. Whenever timber manufacturing facilities are low in inventory they are more likely to go out on the open market where they will pay premium prices for timber. Timber manufacturing facilities tend to be low on timber during the wet seasons so they are often willing to pay more money to landowners with dry and accessible tracts of land.

Regarding market value, the type of action taken really depends on which side of the deal somebody is on. Landowners would want to sell into a hot market to get the most money that they can for their assets. On the flip side, buyers need to purchase timber with future markets in mind to maintain a profitable business. In either case, to get the most profit it is absolutely necessary to stay on top of current market trends.

Of these two oak trees, the one on the right offers the most value since it is more mature and can provide more usable volume.

Challenges

Harvesting of high-value trees comes with its fair share of challenges and affects everyone involved during the process in different ways.

Greg Berndtson, forestry management professional from Wellsboro, Pennsylvania, with more than 14 years of timber harvesting experience, said a common challenge among landowners is achieving maximum profit from their harvest. One way this occurs, according to Berndtson, is when high-value trees are harvested before they have reached full maturity.

“It’s not uncommon to see harvests done on a 15-inch and bigger diameter or somewhere in that neighborhood,” Berndtson said. “While these trees have value, if they are healthy trees with good form on a good site, you are selling yourself short cutting early.” Berndtson noted the highest paying logs need to be 18 or even 20 inches on the small end to get top dollar.

“So, it’s imperative to let the best trees in the stand get to those sizes,” he said. “Cutting healthy trees before they’ve accrued full value is like taking huge penalties by cashing in retirement funds early.”

According to Berndtson, loggers have their own set of challenges and it usually involves cutting trees in difficult terrain, which forces them to adjust their timber harvesting methods.

High-value trees can best be described as tall, straight, large in diameter, hardwood trees with no obvious defects to the stem.

“Hardwood logging in many areas is still highly dependent on skilled hand fallers,” Berndtson said. “Areas of Pennsylvania and down through the Appalachian range are known for steep ground and sometimes hard-to-access timber. These areas are usually worked by hand fallers and skidded with dozers as they are more stable than wheeled skidders.”

Charles Gerber, president of Saratoga Land Management Corporation in Malta, New York, believes the biggest challenge to forest management services is overcoming the public perception that the cutting of trees has a significant negative impact on the environment. Negative opinions are often shaped by values, attitudes and beliefs, but Gerber feels there is a general lack of knowledge among most people when it comes to forest ecology.

“They don’t see a living, breathing and constantly changing ecosystem. The public just sees a hillside that has been thinned out and harvesting equipment along a roadside where there are a bunch of logs and trees dragged out. If they understood forest dynamics, the landowner’s goals and what the foresters are trying to do then they might change their opinion.”

Gerber thinks that one of the toughest challenges for landowners is finding the right certified logging professional to harvest high-value trees. Landowners that rush through this process and choose the wrong logger may find themselves disappointed with the final results. For landowners to get what they want, they need to complete their due diligence by checking references and really getting to know the logging contractor.

“The average landowner will only get one shot at it, so they need to make sure that they find the right person,” Gerber said. “They need to talk to several different foresters and loggers. They better know them, like them and respect them.”

Profit margins shrink when logging trucks need to haul timber far distances to the nearest sawmill.

A helpful resource

As Gerber noted, large-scale timber harvests may only take place once or twice in a lifetime for some landowners. Other landowners may not understand a great deal about high-value trees or the harvesting process in general. When harvesting a woodland, landowners should know that certified foresters can be a helpful resource.

A consulting forester would be most helpful during a tree harvest. Consulting foresters have no ties or obligations to any wood production or forest product company. Their goal is to simply offer land management advice centered around the landowner’s personal goals. There are fees involved, but by using forestry services landowners are usually able to generate more revenue than conducting a full timber harvest and sale.

A recent article written by Hank Stelzer, a state forestry Extension specialist at the University of Missouri, identified the different services that foresters can provide when it comes to harvesting trees.

First, foresters can offer their expertise and help develop a long-term management plan for a tract of land. They can maximize present and future economic value by identifying which trees to harvest and which trees to retain in the forest. Foresters are able to prepare an accurate inventory of what is to be offered for sale including species, number of trees, volume, quality and estimated value. They can help landowners to get the maximum price for their timber due to their extensive knowledge in the areas of tree value, markets and buyers. Landowners can even hire foresters to negotiate contracts and to monitor the activities of a logger to ensure that everything is being done correctly.