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Group Title: Forest resources and conservation fact sheet ;, FRC-1
Title: 12 marketing tips for increasing your returns from small woodlots
CITATION PAGE IMAGE ZOOMABLE PAGE TEXT
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Permanent Link: http://ufdc.ufl.edu/UF00071930/00001
 Material Information
Title: 12 marketing tips for increasing your returns from small woodlots
Series Title: Forest resources and conservation fact sheet
Alternate Title: Twelve marketing tips for increasing your returns from small woodlots
Physical Description: 4 p. : ; 28 cm.
Language: English
Creator: Flinchum, David Mitchell, 1945-
Florida Cooperative Extension Service
Publisher: Florida Cooperative Extension Service
Place of Publication: Gainesville Fla
Publication Date: 1980?
 Subjects
Subject: Trees -- Marketing   ( lcsh )
Woodlots -- Management   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
bibliography   ( marcgt )
non-fiction   ( marcgt )
 Notes
Bibliography: Bibliography: p. 4
Statement of Responsibility: D. Mitchell Flinchum.
General Note: Caption title.
General Note: "10-2M-79"--p. 4
Funding: Florida Historical Agriculture and Rural Life
 Record Information
Bibliographic ID: UF00071930
Volume ID: VID00001
Source Institution: Marston Science Library, George A. Smathers Libraries, University of Florida
Holding Location: Florida Agricultural Experiment Station, Florida Cooperative Extension Service, Florida Department of Agriculture and Consumer Services, and the Engineering and Industrial Experiment Station; Institute for Food and Agricultural Services (IFAS), University of Florida
Rights Management: All rights reserved, Board of Trustees of the University of Florida
Resource Identifier: oclc - 20743493

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HISTORIC NOTE


The publications in this collection do
not reflect current scientific knowledge
or recommendations. These texts
represent the historic publishing
record of the Institute for Food and
Agricultural Sciences and should be
used only to trace the historic work of
the Institute and its staff. Current IFAS
research may be found on the
Electronic Data Information Source
(EDIS)

site maintained by the Florida
Cooperative Extension Service.






Copyright 2005, Board of Trustees, University
of Florida






'Y7 9O-

Forest Resources and Conservation Fact Sheet FRC-1



12 Marketing Tips for Increasing Your

Returns from Small Woodlots
D. Mitchell Flinchum*
i. IF A
Florida Cooperative Extension Service / Institute of Food and Agricultural Sciences/ University of Florida /J. T. Woeste, Dean .,


Generally owners of small tracts of forest land are
not familiar with timber or other wood product
markets. Consequently, many landowners may be
selling wood for less than its real value. Marketing
forest products, like any other commodity, is a com-
plex business venture. Thoughtful planning,
management, and timing, along with some
knowledge of the market, can make a considerable
difference in the economic returns from a woodlot in-
vestment.
If you are planning a timber sale, the following
marketing tips and sources of information may be
helpful.

1 Know the Market Trends

For the past several years wood prices have been
higher in Florida than in most southern states, and
the trend has continued upward. Despite the up-
ward trend, however, statewide average prices of
Dine stumpage vary monthly. If the prices for a par-
ticular product have been decreasing for a few
months prior to your planned sale, it may be to your
advantage to delay the sale. Over the past 4 years in
Florida, decreasing price trends generally change
within a 4 to 6 month period.

2 Keep Current on Market Prices

Timber sales are not frequent activities for owners
of small woodlots; therefore, it is difficult for the
landowner to stay abreast of the current market
prices. Before selling your wood, discuss the
markets with neighbors, county agricultural exten-
sion agents, and foresters associated with private,
state, and federal agencies.
District Foresters with the Florida Division of
Forestry and County Extension Directors receive a
monthly raw forest product price report that will
keep you up to date on the wood markets in your
general area. This service was made available
through a grant from the U.S. Forest Service.


You may want to obtain your own subscription to
the price report. Information about subscription
rates and schedules may be obtained from:
Timber Mart-South
P. O. Box 1278
Highlands, NC 28741
Timber Mart-South is a brief, easy to read, monthly
report of the market for raw forest products in
Florida and also in the other states in the Southeast.

3 Know the Price Zones

If your timber is located near a mill, its buyer may
pay more because transportation costs will be lower;
however, many factors influence a timber sale bid,
so check prices with buyers for mills outside your
immediate area.
Florida stumpage prices tend to be the lowest in
the southern and highest in the northeastern
regions of the state.


4 Let the Buyers Know You Are Selling
for the Best Price

Locating all the markets or buyers in your area
may be time consuming. Contact your county
forester; in some instances there may be a list
already developed. Timberland owners in other
states advertise in local or regional newspapers and
let the buyers find them. Whatever method you
choose, always get several bids and let the bidders
know that you are selling for the best price.


5 Time Your Sale

Barring catastrophes, wood fiber is added to the
trees each year through diameter and height
growth. If the increase in value exceeds the costs of
holding the timber and land, greater returns may be
expected by waiting for the right time to place the


*D. Mitchell Flinchum is Assistant Professor and Extension Forest Management Specialist, School of Forest Resources and
Conservation, Institute of Food and Agricultural Sciences (IFAS), University of Florida, Gainesville, Florida, 32611.









timber on the market. Timber that is ready to
market, growthwise, can usually be held several
years to avoid market lows. Often the gain realized
as the market recovers will return more to the owner
than the cost of holding it.
Avoid distress sales. Maintain ample income
security from other sources to prevent selling your
products during low market periods.

6 Look for Market Changes

Legislation, real estate, and markets related to
wood products may be useful in predicting changes
in timber prices. Upward trends in housing gener-
ally indicate higher prices for wood products.
If pending laws on wilderness and roadless areas
are passed, timber production from national forests
will probably decrease. A decrease in the supply
from national forests indicate more optimistic
markets for the private landowner.
A growing population in the "sunbelt" is placing
higher demands on timber producing land. Cur-
rently the southeastern United States is supplying
30 percent of the nation's wood needs; by the year
2000, the Southeast is expected to supply at least 55
percent. This projection does not include the
demands from new markets that are now predicted
because of accelerating fuel costs or reductions in
the timber producing land base caused by the
South's growing population.
A reduction in the land base, a near two-fold in-
crease in the nation's need for wood fiber, and new
markets created because of fuel shortages all
translate into a more optimistic outlook for in-
vestments in growing wood.

7 Identify Your Products

If your woodlot is composed of several species or
sizes of trees you may have more than one type of
forest product. Don't sell high quality trees, which
may be suited for veneer, sawtimber, or poles, on the
pulpwood market. Your county forester or a private
consultant can inform you about the various prod-
ucts you may have. It may be more profitable to sell
to speciality markets; if so, plan to cut selectively
and at short intervals to supply them.

8 Know Your Woodlot Sites

If your wood is located on a site that is accessible
all year, it could be worth more money. Since
harvesting is normally curtailed during rainy
seasons, buyers may pay more for timber located on
sites that can be logged under adverse weather con-
ditions.


9 Be Prepared for Risks

Wood salvaged from natural catastrophes such as
disease, insect, fire, and wind damage tend to "flood
the market". If your timber is not damaged, plan
your sale at a later date. If the timber is damaged,
plan your sale as soon as possible to prevent a
greater loss from wood deterioration. A quick sale
also prevents additional spread of disease and in-
sects.


10 Study Your Taxable Income Options

Because ownership objectives, individual in-
comes, and sales contracts vary, you should select a
marketing scheme that fits your individual needs.
Talk to your tax advisor and find out how to plan
your sale so the net income can be treated as Capital
Gains.
Income not treated as Capital Gains may also be
scheduled for additional economic advantages. It
may be beneficial to split your timber income into
two or more installments to avoid higher tax
brackets. The income averaging methods of report-
ing is another means of reducing tax liabilities; or
perhaps a combination of the two would work best
for you.
Keep records and deduct your expenses of the
sale. Consulting fees, tree marking expenses, tem-
porary road construction, and improvements con-
nected with the sale are all deductible items. Site
preparation, tree planting and tree planting wages,
tools and equipment, and the purchase price of
timber are costs that are capitalized and can be
recovered as the timber is harvested. Equipment
maintenance costs, interest on mortgage payments
associated with the timber, and depreciation
allowance for equipment are examples of operating
expenses that are also deductible.
Agricultural Handbook No. 274, The Timber
Owner and His Federal Income Tax, gives detailed
guidelines and examples on how to avoid overpay-
ment of tax on timber sold or harvested. The
publication is available for $1.40 from:
Superintendent of Documents
U. S. Government Printing Office
Washington, D. C. 20402
Stock Number 001-000-03460-0
Additionally, send for General Report SA-GRI,
What Forest Landowners Should Know About
Federal Estate and Gift Taxes. Free copies of this
publication are available from USDA Forest Serv-
ice, Information Center, 1720 Peachtree Road,
Room 816, Atlanta, GA 30309.









11 Plan Ahead

Before you decide to sell your timber think about
how you're going to use the land in the future. If you
intend to put the land back into timber production,
the marketing scheme and harvesting method you
select could affect the initial cost of establishing a
new crop. This decision should be made with the
help of a registered professional forester.

12 Search Out Available Services

Woodland owners in Florida have several sources
available for information about marketing products
and many are free of charge.
Florida Division of Forestry
County Foresters offer technical service to
woodland owners. These services may include
timber cruising, forest management plans, and sales
information. The county forester's office is gener-
ally located in the county seat and listed in the
telephone directory under county offices.

Forestry Extension, University of Florida
Services related to the educational needs of
public groups and professional foresters may be ob-
tained from forestry specialists located in the
School of Forest Resources and Conservation,
University of Florida. Requests for slide-tape pro-
grams, fact sheets, teaching, and demonstrations
about marketing should be directed through your
local county agricultural extension director.

Agricultural Stabilization and Con-
servation Service (ASCS)
ASCS will provide advice, information, and
assistance about cost sharing benefits through the
federally sponsored Forestry Incentive (FIP) and
the Agricultural Conservation (ACP) Programs for
establishing a new forest crop after the harvest.

Soil Conservation Service (SCS)
SCS offers resource planning and advice to land-
owners in Florida, based on soil types. Local offices
have access to forestry information through a
forestry specialist at the state level.

Forest Industry
Several companies in Florida provide assistance
to landowners before and after a timber sale. Each
company differs in the amount of assistance that
will be provided and the terms under which the
assistance will be given.


Services performed free of charge, for a fee, or at
cost, will vary from company to company. In some
instances, the help offered by a company is through
a vendor, contractor, or other third party. Each firm
can provide the landowner with specific details.
The following companies offer assistance pro-
grams to landowners in Florida:


Buckeye Cellulose Corporation
Landowner Assistance Program
Rt. 2, Box 260
Perry, FL 32347 (904)584-0121

International Paper Company
P. O. Box 2448
Mobile, AL 36601 (205)457-8961

ITT Rayonier, Inc.
Southeast Timber Division
P. O. Box 728
Fernandina Beach, FL 32034 (904)261-3631

Louisiana-Pacific Corporation
P. 0. Box 1267
Crestview, FL 32536 (904)892-3175

T. R. Miller Mill Company, Inc.
P. O. Box 708
Brewton, AL 36426 (205)867-4331

Union Camp Corporation
P. O. Box 1391
Savannah, GA 31402 (912)236-5771



Other companies may be available; contact the
local county forester or agricultural extension agent
for additional information about landowner pro-
grams in your area.


Forestry Consultants

A forestry consultant is a professional forester
who renders services to landowners for a fee. Be-
cause the fee may be based on percentage of your
timber sale, be assured that your economic inter-
ests are cared for. In most cases the consultant's
experience with timber sales and knowledge of the
current markets can increase revenues far in excess
of his charges.
A list of forestry consulting firms may be ob-
tained from your local county forester or by writing
to:

Association of Consulting Foresters
Mr. Edward Stuart, Jr., Executive Director
P. 0. Box 369
Yorktown, VA 23690










Summary


Many factors influence the amount of revenue you
receive from a timber sale. This fact sheet has iden-
tified several of the important ones, but individual
circumstances vary so there may be others. Before
placing your product on the market, decide which
factors are most important to you; then search out
the services that are available. The difference be-
tween marketing your forest product and just sell-
ing your product could make a considerable dif-
ference in your bank account.


References


American Forest Institute. Directory of Forest Industries Pro-
viding Forest Management Services for Private Landowners in
the United States. Washington, D. C. 1978.
Fisher, R. F., Jensen, A. S., Post, D. M., Rockwood, D. L. Smith,
W. H., Sullivan, E. T. Forest Management for Small Owner-
ships. University of Florida. Florida Cooperative Extension
Service. 1979.
Forest Resources Management for Small Woodland Owners.
University of Tennessee. Tennessee Cooperative Extension
Service. 1978.
Martin, Ivan R. How to Find and Buy Woodlands. Eclectic,
Alabama: Resource Associates, P. O. Box 268. 1979.
Norris, F. W. Timber-mart South. Highlands, N. C.: P. O. Box
1278, 28741. (monthly market periodical).
United States Department of Agriculture. Forest Service. The
Timber Owner and His Federal Income Tax. Agricultural
Handbook No. 274. 1975.


This public document was promulgated at a cost of $239.39, or 4.8 cents per copy, to provide information to forest
landowners about marketing raw forest products. 2-5M-81


COOPERATIVE EXTENSION SERVICE, UNIVERSITY OF FLORIDA, INSTITUTE OF FOOD AND AGRICULTURAL
SCIENCES, K. R. Tefertiller, director, in cooperation with the United States Department of Agriculture, publishes this infor-
mation to further the purpose of the May 8 and June 30, 1914 Acts of Congress;and is authorized to provide research, educa- 1(iPAO.
tlonal information and other services only to individuals and institutions that function without regard to race, color, sex orI .
national origin. Single copies of Extension publications (excluding 4-H and Youth publications) are available free to Florida
residents from County Extension Offices. Information on bulk rates or copies for out-of-state purchasers is available from ~-' j
C. M. Hinton, Publications Distribution Center, IFAS Building 664, University of Florida, Gainesville, Florida 32611. Before publicizing this
publication, editors should contact this address to determine availability.




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