You may have a large number of trees and you’d like to make some money from its timber. The question is – how much does timber sell for per acre?
Besides cleaning out the air and providing food, trees are also a source of wood. There are a lot of applications timber can be used for. These include furniture, fencing, roofing, amongst others.
How much can you make off an acre of timber? Keep reading, as I’ll be providing you with the relevant estimates.
How Much Can You Make Selling Timber?
In very recent times, there have been inconsistencies in the demand for timber, all thanks to the COVID-19 pandemic. This shows the importance of staying updated with trends and how they affect the price of timber.
For example, there has been a huge demand shift for tissue products, as well as construction work during the past 4 months, and this created a good opportunity to sell timber from young pine stands.
Also, there is expected to be an increase in home construction over the next few months, so this is a great opportunity to market older pine saw timber.
Standing Timber Prices: How Much Does It Sell For?
The average stumpage price is $300/MBF or $1,800 per acre in total.
Keep in mind that these are average prices, and they can change depending on certain influences.
What Can Influence Current Timber Prices?
To get a clear idea of how much timber is worth per acre, you need to first have a proper understanding of the market forces (demand and supply), and see how that can influence the price of timber.
Location is one of the major determinants of timber prices. Other determinants include surrounding mill types, road accessibility to the mills, the type of timber used in certain areas, and the quantity of the timber, amongst others.
All these variables play major roles in deciding what the price of timber will be per acre.
For instance, the lumber derived from large pine logs have more demand in an area that has many sawmills than smaller logs that are ground to small bits for paper production or wood chips.
Those who own timberlands in the southern parts of America concentrate on producing larger pine logs. The pine timber stands in this area consist of timber derived from trees that are almost the same age.
Maybe not more than 3 years apart in age.
Even-aged plantation pine stands usually pass through 1-2 commercial thinnings and final harvest. Using this model, thinnings usually remove smaller trees that are younger and clear-cuts remove the rest of the larger trees at older ages.
This means there is a significant size difference between the trees removed during thinning, and the trees removed during clear cuts. The size difference will also mean that they will be priced differently.
5 Major Factors That Affect The Price Of Timber
According to sales data collected by Forest2ForestMarket, timber prices (both high and low) are controlled by 5 main factors.
These factors include –
Competition: Size-wise, wood basins are typically small and they are made up of a handful of counties. Saw pine wood can differ by as high as $20 per ton. This of course depends on whether the timber is situated in a very competitive (or semi-competitive) area.
It is a habit of wood companies to buy their preferred wood from areas that are closest to their sawmills. In some cases, they would have to pay higher stumpage prices, since they are incurring fewer expenses on delivery.
What this means is that prices can vary significantly within areas with proximity.
Inventory: Sustaining the right level of inventory, is important, as far as facility production management is concerned. The same goes for supply chain costs and the general supply chain productivity.
By optimizing the supply chain, companies can save some money and increase efficiency. On the other hand, low inventory can cause wood manufacturers to explore the open market.
This method of operation is pretty expensive, although it guarantees that a facility can get a sufficient amount of wood to produce at their preferred level.
When wood companies find themselves paying a premium for wood, the loggers who provide the wood can pay better stumpage prices to those who own the land.
This is a win/win situation for both the loggers and the owner of the land.
Season & Weather: When the weather is unfavorable, say during the raining season, it would become very difficult for loggers to supply wood daily. During the dry seasons, they can supply as much wood as their capacity can handle.
When there is a high demand, but low supply, prices of timber would naturally go up. During the raining seasons, loggers will be forced to concentrate their production efforts to wet weather tracts.
In this season, timber-buying facilities would have to pay higher for timber if they are to keep up with their inventory levels.
Even as regular weather changes can affect timber harvesting and supply, there are unforeseen weather events that wood buyers have to take into account.
These unforeseen weather events include flooding, wildfires, droughts, and hurricanes.
Here’s an instance. In 2018, Hurricane Michael directly affected more than 3.5 million acres of timberland. There was about 75% severe damage and 95% catastrophic damage done.
The affected timberlands experienced great losses, and this only meant that the harvesting and supply of timber would be hindered.
It also meant that wood buying companies had to get their timber from elsewhere, and this would increase the cost of transporting the timber from the new source to the sawmill.
Such events would have a direct impact on the prices of timber to end users like furniture or fence makers.
Tract Size: One of the major expenses loggers will have to deal with is the cost of transporting equipment from one track to the other.
Large tracts say 200+ acres allow loggers to increase their weekly production since they can haul more loads per trip.
What this means is that tracts that have large volumes and acreage will most likely get price premiums. It gets better if the timberland is close to the mills and the roads they travel on are in good condition.
Tree Size and Quality: This is one of the major price-determining factors as far as timber is concerned.
Pine logs can be grouped as follows –
5-7” diameter at breast height (DBH) is pulpwood, 8-11” is chip-n-saw, while 12” and above are saw timber.
The log size and per-ton value of a tree go hand-in-hand. For instance, saw timber that has a DHB of 18” will be more expensive than saw timber of 12” DHB.
Besides the size of the tree, the quality of the wood itself also influences timber prices. Trees with lower quality are used to produce cheaper products, regardless of if they are of the necessary DHB. Hence, they are sold at lower prices.
All the above-mentioned factors greatly contribute to the complex nature of the timber market.
For one to have the best understanding of the timber market and prices, it is vital to consider all these factors, and determine how such factors would affect timber prices, both in the long and short run.
Costs of Timber Transportation
The cost of transporting timber will vary, depending on a few factors like the type of tree, the number of trees being transported, tract Size, the distance between the harvesting site and the mill, the area, as well as the condition of the roads.
Type of lumber, the volume of lumber & weight
The amount of lumber being transported can determine the weight-load the truck has to carry.
Usually, wood companies will ensure the haulage truck is filled, since this would mean the use of fewer trucks, or making fewer back and forth trips.
The tree type can also be a factor. Larger trees will take up more space in the haulage truck than smaller trees. They may also weigh heavier too, depending on the number of trees loaded.
The heavier the load on the truck, the higher the wood company has to pay for transportation. If they have their truck (or trucks), then all they would have to contend with is the cost of fuel for the truck to and fro.
Many harvesters will cut up the wood into manageable pieces so they can fit more into the truck, hence, fewer trips.
There is a great variation among factors around the southern parts of America. This means that the systems of harvesting and transporting timber must be based around the determining factors on a local scale.
Timber Transportation costs are usually in the order of 10c/km/ton. Going by this, the grower or buyer would get $10 less per cubic meter of logs per 100 km.
Many variables come into play when determining the price of timber per acre. The season, proximity, and other factors that affect the demand for timber all play a vital role.
I hope this article on how much does timber sell for per acre has been helpful.