By Jim Griffith
Registered Forester #1616
Is it a good time to sell timber? I am asked this question almost anytime I meet a landowner about selling trees. I always say if you need money, it is a good time to sell!
However, this is not usually the answer landowners want to hear. It’s human nature that when we sell we want to sell at the ‘all-time’ peak of the market, making more money than anyone in history who has ever sold the same product. To answer the question, “Is it a good time to sell?” requires a little more explanation than a simple yes or no.
For instance, you must consider more than just the price when selling a first-time thinning, select-cut. You may need to take a lesser price to get the job you want and need. It takes more time, effort, and expertise to harvest a first-time thinning than it does to clearcut a large stand of pine pulpwood. Since time is money, you cannot expect to get the same price for a 15-year-old stand of planted pine as you do for a 40-year-old clearcut, or even a 15-year- old clearcut for that matter.
The type of timber you have to sell also determines if it is a good time to sell. Are you talking about selling pine or hardwood? Are you talking about pulpwood or sawtimber, or some product in-between? Pine and hardwood prices are not always up at the same time, just as pulpwood and sawtimber prices are not necessarily up at the same time.
At the end of the 1990s, the perfect storm of timber price effects came together at one time. We had the spotted owl calamity in the Northwestern United States that took a considerable amount of sawlogs off the market, creating a shortage. Additionally, the export market created a high demand for pulp and paper, and more hardwood was being used in the paper making process. The building industry was booming. Environmental restrictions were beginning to limit hardwood availability for market. And then it rained all summer long and through the winter putting extreme pressure on the mill procurement agents to supply enough wood volume to keep the mills from shutting down. PRICES WERE GREAT! In fact, this period of time saw all-time high timber prices.
So what about now? From what I see, the timber market we are in at this time is as good as it has been since the perfect storm of the late 1990s. Across the board, for pine and hardwood, we are looking at as good a market as we have had in a while. If you are looking for the highest price, now might be a time for you to consider selling. Is the market going higher? Well if I knew the answer to that question, I would buy low, sell high, and then retire.
Jim Griffith is the general manager of Georgia Farm Bureau Timber and Real Estate Companies.
Georgia Farm Bureau News – April 2006