Woodland Security
Timber Sale and Harvesting Issues

Remarks with the Alabama Forest Landowner's Association
25 May 2006
Tom Kazee

Top Ten Things the Non-Industrial Forest Landowner Should Keep in Mind Prior to, During and After a Timber Sale

  1. Educate Yourself.
    1. Through associations, periodicals, seminars, tours and consultants. Know what species and products you own. Understand stand densities (cords, tons, MBF per acre). Understand market conditions and market variables. Develop your own forest management strategy. Aesthetics, wildlife, recreation, and income are all important factors.
  2. Get professional, unbiased help. An uninvited timber buyer is not unbiased.
    1. Free Help - County Rangers, prospective buyers
    2. Paid Help - consulting foresters; meet with more than one
  3. Insure there is a good appraisal prior to any sale agreement. Know what you own. Watch, inspect and ask lots of questions during this process. Insure there is good quality control and good precision. Know what you own BEFORE YOU SELL IT.
  4. Insure there is AGGRESSIVE MARKETING. Selling to the first guy that makes an offer does not qualify. All or at least several prospective buyers should have an opportunity to inspect and make an offer.
  5. If your agent handles negotiations on your behalf, YOU should speak with unsuccessful prospects. Trust and verify. Make sure you have a good understanding of market conditions.
  6. MAKE NO VERBAL AGREEMENTS. MAKE NO IMPLIED AGREEMENTS. Your attorney must inspect any timber sale contract prior to any agreement. Get insurance certificates for general liability and workman's compensation insurance that are current for the person doing the work.
  7. YOU observe bid openings if you conduct a bid sale. The INTEGRITY of the bid opening is critical to a fair sale. Insure the bid opening is fair, unbiased and public. Bidders should be invited to witness the opening, even though most will not attend.
  8. Pay as Cut Contracts must have some device to prompt the commencement of harvesting. If there is no advance or deposit, the buyer might never cut your timber. This is particularly true when market conditions change and he has to cut your timber at a loss.
  9. Sale boundaries must be painted prior to harvesting. Flagging might be okay, but not if you sell timber adjacent to a merchantable stand with no physical boundary (road or stream).
  10. For pay as cut sales: Load tags and load reports are essential. They need not be expensive or elaborate. You can make your own load tags from index cards and use a legal pad for a load report. Each load must be assigned a unique number when the trailer is loaded. Each loaded trailer must be recorded in writing before the trailer moves. No loaded trailer should move one inch without being properly documented. Spray paint your serial number on the flank of each load. Attach your index card to the scale ticket. Reconcile shipments with receipts. Requirements for load reports should be in your pay as cut sale contract.
  11. A regular, thorough inspection of harvesting activities must occur. For non-industrial landowners, I would recommend no less than twice each week. Four times a week would be better. You or your professional, trusted agent: someone who knows what they are looking at. Inspect for:
    1. All contract specifications.
    2. The integrity of sale boundaries.
    3. BMP compliance.
    4. Merchandising - poor merchandising can cost you more than theft.
    5. Load reports and trip tickets.
    6. Production - If they ship two loads a day or twenty, you must know what to expect at the end of each pay period.
  12. For pay as cut sales: insure payments are timely. If they get behind, shut down the logging. They will catch up the payments.
  13. Be sensitive to warning signs: Lavish lifestyle, hostile and aggressive, contract violations, other forms of corruption, sloppy paperwork, loading trailers at night, high turnover of truck drivers and crew. These should cause a prudent person to be more careful.
  14. Compare pre-harvest appraisal to actual results. Deviations should be explainable. A good professional cruise should be within 10% of the actual.
  15. Protect the entire business. Reforestation and road maintenance payments, hunting lease income, land and timber between harvest: All these are subject to theft or fraud. Be alert regarding your personal safety.