You may have many trees and want to make some money from their timber. The question is – how much does lumber sell per acre?
Besides cleaning out the air and providing food, trees are also a source of wood. There are many applications for timber. These include furniture, fencing, and roofing, amongst others.
How much can you make off an acre of timber? Keep reading, as I’ll provide the relevant estimates.
How Much Can You Make Selling Timber?
In recent times, there have been inconsistencies in timber demand, all thanks to the COVID-19 pandemic. This shows the importance of staying up to date with trends and how they affect wood prices.
For example, there has been a considerable shift in demand for tissue products and construction work over the past four months, creating an excellent opportunity to sell timber from young pine stands.
Also, home construction is expected to increase over the next few months, so this is an excellent 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.
Remember that these are average prices, and they can change depending on specific influences.
What Can Influence Current Timber Prices?
To get a clear idea of how much timber is worth per acre, you first need to understand the market forces (demand and supply) and how they can influence the price of timber.
These are significant considerations in the timber business.
Location is one of the significant 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 wood, amongst others.
All these variables play significant roles in deciding the price of timber per acre.
For instance, the lumber derived from large pine logs has more demand in an area with many sawmills than smaller logs ground into 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 of almost the same age.
Maybe not more than three years apart in age.
Even-aged plantation pine stands usually undergo 1-2 commercial thinnings and a final harvest. Using this model, thinnings usually remove younger, smaller trees, and clear-cuts remove the remaining larger trees at older ages.
This means there is a significant difference between the trees removed during thinning and the trees released during precise 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 five main factors.
These factors include –
Competition: Size-wise, wood basins are typically small, comprising a handful of counties. Saw pine wood can differ by as much as $20 per ton. This, of course, depends on whether the timber is situated in a very competitive (or semi-competitive) area.
It is common for wood companies to buy their preferred wood from areas closest to their sawmills. In some cases, they would have to pay higher stumpage prices because they incur lower delivery costs.
What this means is that prices can vary significantly within areas with proximity.
Inventory: Maintaining the correct stock level is essential for facility production management. The same goes for supply chain costs and general supply chain productivity.
Companies can save money and increase efficiency by optimizing their supply chains. 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 obtain sufficient wood to produce at its preferred level.
When wood companies pay a premium for wood, the loggers who supply it can pay higher stumpage rates to landowners.
This is a win/win situation for both the loggers and the land owner.
Season & Weather: When the weather is unfavorable, such as during the rainy season, it becomes challenging for loggers to supply wood daily. They can deliver as much lumber as their capacity can handle during the dry seasons.
When demand is high but supply is low, timber prices would naturally increase. During the rainy seasons, loggers will be forced to concentrate their production efforts in wet weather tracts.
In this season, timber-buying facilities would have to pay more for timber to maintain their inventory levels.
Even as regular weather changes can affect timber harvesting and supply, unforeseen weather events are something wood buyers must 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 significant losses, which would hinder the harvesting and supply of timber.
It also meant that wood-buying companies had to source their timber elsewhere, increasing the cost of transporting it from the new source to the sawmill.
Such events would directly impact the prices of timber for end users such as furniture or fence makers.
Tract Size: One of the significant expenses loggers will incur is the cost of transporting equipment from one track to the other.
Large tracts of 200+ acres allow loggers to increase their weekly production by hauling more loads per trip.
This means that tracts with 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: These are among the most significant price-determining factors for timber.
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 with a DHB of 18” will be more expensive than saw wood with a DHB of 12”.
Besides the size of the tree, the quality of the wood itself also influences timber prices. Trees with lower rates are used to produce cheaper products, regardless of whether they are of the necessary DHB. Hence, they are sold at lower prices.
All the factors mentioned above significantly contribute to the complex nature of the timber market.
To best understand the timber market and prices, consider all these factors and determine how they would affect timber prices in the long and short run.
Costs of Timber Transportation
The cost of transporting timber will vary depending on factors such as the type of tree, the number of trees being transported, tract Size, the distance between the harvesting site and the mill, the area, and 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 ensure the haulage truck is full, since this means fewer trucks or fewer back-and-forth trips.
The tree type can also be a factor. More giant trees will take up more space in the haulage truck than smaller trees. Depending on how many trees are loaded, they may also weigh more.
The heavier the load on the truck, the higher the cost to the wood company for transportation. If they have their vehicle (or trucks), 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 to fit more into the truck, hence fewer trips.
There is an excellent variation among factors in the southern parts of America. This means that the harvesting and transport of timber systems must be based on the determining factors at the local scale.
Timber Transportation costs are usually in the order of 10c/km/ton. The grower or buyer would get $10 less per cubic meter of logs per 100 km.
Conclusion
Many variables come into play when determining the price of timber per acre. Season, proximity, and other factors that affect demand for wood all play a vital role.
I hope this article on how much timber sells per acre has been helpful.