12 marketing tips for increasing your returns from small woodlots

Material Information

12 marketing tips for increasing your returns from small woodlots
Series Title:
Forest resources and conservation fact sheet
Added title page title:
Twelve marketing tips for increasing your returns from small woodlots
Flinchum, David Mitchell, 1945-
Florida Cooperative Extension Service
Place of Publication:
Gainesville Fla
Florida Cooperative Extension Service
Publication Date:
Physical Description:
4 p. : ; 28 cm.


Subjects / Keywords:
Trees -- Marketing ( lcsh )
Woodlots -- Management ( lcsh )
bibliography ( marcgt )
non-fiction ( marcgt )


Bibliography: p. 4
General Note:
Caption title.
General Note:
"10-2M-79"--p. 4
Florida Historical Agriculture and Rural Life
Statement of Responsibility:
D. Mitchell Flinchum.

Record Information

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Marston Science Library, George A. Smathers Libraries, University of Florida
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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
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Resource Identifier:
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Full Text
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 WFAS 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

7 0 9Oz
Forest Resources and Conservation Fact Sheet FR C-i
12 Marketing Tips for Increasing Your
Returns from Small Woodlots
D. Mitchell Flinchum*
Florida Cooperative Extension Service / Institute of Food and Agricultural Sciences / University of Florida / J. T. Woeste, Dean L
Generally owners of small tracts of forest land are You may want to obtain your own subscription to not familiar with timber or other wood product the price report. Information about subscription markets. Consequently, many landowners may be rates and schedules may be obtained from:
selling wood for less than its real value. Marketing Timber Mart-South forest products, like any other commodity, is a com- P. 0. Box 1278 plex business venture. Thoughtful planning, Highlands, NC 28741
management, and timing, along with some Timber Mart-South is a brief, easy to read, monthly
knowledge of the market, can make a considerable report of the market for raw forest products in difference in the economic returns from a woodlot in- Florida and also in the other states in the Southeast. vestment.
If you are planning a timber sale, the following 3 Know the Price Zones marketing tips and sources of information may be helpful. If your timber is located near a mill, its buyer may
pay more because transportation costs will be lower; 1 Know the Market Trends however, many factors influence a timber sale bid,
so check prices with buyers for mills outside your For the past several years wood prices have been immediate area.
higher in Florida than in most southern states, and Florida stumpage prices tend to be the lowest in the trend has continued upward. Despite the up- the southern and highest in the northeastern ward trend, however, statewide average prices of regions of the state. Dine stumpage vary monthly. If the prices for a particular product have been decreasing for a few months prior to your planned sale, it may be to your 4 Let the Buyers Know You Are Selling advantage to delay the sale. Over the past 4 years in for the Best Price Florida, decreasing price trends generally change within a 4 to 6 month period. Locating all the markets or buyers in your area
may be time consuming. Contact your county 2 Keep Current on Market Prices forester; in some instances there may be a list
Timer ale ae nt feqentactvitesforownrs already developed. Timberland owners in other Timbr slesare ot reqent ctiitis fo owers states advertise in local or regional newspapers and of small woodlots; therefore, it is difficult for the let the buyers find them. Whatever method you landowner to stay abreast of the current market choose, always get several bids and let the bidders prices. Before selling your wood, discuss the know that you are selling for the best price.
markets with neighbors, county agricultural extension agents, and foresters associated with private, state, and federal agencies. 5 Time Your Sale
District Foresters with the Florida Division of
Forestry and County Extension Directors receive a Barring catastrophes, wood fiber is added to the monthly raw forest product price report that will trees each year through diameter and height keep you up to date on the wood markets in your growth. If the increase in value exceeds the costs of general area. This service was made available holding the timber and land, greater returns may be
through a grant from the U.S. Forest Service, expected by waiting for the right time to place the
*D3. 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 9 Be Prepared for Risks
market, growthwise, can usually be held several
years to avoid market lows. Often the gain realized Wood salvaged from natural catastrophes such as as the market recovers will return more to the owner disease, insect, fire, and wind damage tend to "flood than the cost of holding it. the market". If your timber is not damaged, plan
Avoid distress sales. Maintain ample income your sale at a later date. If the timber is damaged,
security from other sources to prevent selling your plan your sale as soon as possible to prevent a products during low market periods. greater loss from wood deterioration. A quick sale
6 Look for Market Changes also prevents additional spread of disease and insects.
Legislation, real estate, and markets related to
wood products may be useful in predicting changes 10 Study Your Taxable Income Options in timber prices. Upward trends in housing generally indicate higher prices for wood products. Because ownership objectives, individual inIf pending laws on wilderness and roadless areas comes, and sales contracts vary, you should select a are passed, timber production from national forests marketing scheme that fits your individual needs. will probably decrease. A decrease in the supply Talk to your tax advisor and find out how to plan from national forests indicate more optimistic your sale so the net income can be treated as Capital markets for the private landowner. Gains.
A growing population in the "sunbelt" is placing Income not treated as Capital Gains may also be higher demands on timber producing land. Cur- scheduled for additional economic advantages. It
rently the southeastern United States is supplying may be beneficial to split your timber income into 30 percent of the nation's wood needs; by the year two or more installments to avoid higher tax 2000, the Southeast is expected to supply at least 55 brackets. The income averaging methods of reportpercent. This projection does not include the ing is another means of reducing tax liabilities; or
demands from new markets that are now predicted perhaps a combination of the two would work best because of accelerating fuel costs or reductions in for you. the timber producing land base caused by the Keep records and deduct your expenses of the
South's growing population. sale. Consulting fees, tree marking expenses, temA reduction in the land base, a near two-fold in- porary road construction, and improvements concrease in the nation's need for wood fiber, and new nected with the sale are all deductible items. Site markets created because of fuel shortages all preparation, tree planting and tree planting wages,
translate into a more optimistic outlook for in- tools and equipment, and the purchase price of vestments in growing wood. timber are costs that are capitalized and can be
7 Identify Your Products recovered as the timber is harvested. Equipment
maintenance costs, interest on mortgage payments
If your woodlot is composed of several species or associated with the timber, and depreciation sizes of trees you may have more than one type of allowance for equipment are examples of operating forest product. Don't sell high quality trees, which expenses that are also deductible. may be suited for veneer, sawtimber, or poles, on the Agricultural Handbook No. 274, The Timber pulpwood market. Your county forester or a private Owner and His Federal Income Tax, gives detailed consultant can inform you about the various prod- guidelines and examples on how to avoid overpayucts you may have. It may be more profitable to sell ment of tax on timber sold or harvested. The to speciality markets; if so, plan to cut selectively publication is available for $1.40 from: and at short intervals to supply them. Superintendent of Documents
U. S. Government Printing Office
8 Know Your Woodlot Sites Washington, D. C. 20402
Stock Number 001-000-03460-0
If your wood is located on a site that is accessible Additionally, send for General Report SA-GRI, all year, it could be worth more money. Since What Forest Landowners Should Know About
harvesting is normally curtailed during rainy Federal Estate and Gift Taxes. Free copies of this
seasons, buyers may pay more for timber located on publication are available from USDA Forest Servsites that can be logged under adverse weather con- ice, Information Center, 1720 Peachtree Road, ditions. Room 816, Atlanta, GA 30309.

11 Plan Ahead Services performed free of charge, for a fee, or at
cost, will vary from company to company. In some Before you decide to sell your timber think about instances, the help offered by a company is through
how you're going to use the land in the future. If you a vendor, contractor, or other third party. Each firm intend to put the land back into timber production, can provide the landowner with specific details.
the marketing scheme and harvesting method you The following companies offer assistance proselect could affect the initial cost of establishing a grams to landowners in Florida: new crop. This decision should be made with the help of a registered professional forester.
Buckeye Cellulose Corporation
Landowner Assistance Program
12 Search Out Available Services Rt. 2, Box 260
Perry, FL 32347 (904)584-0121
Woodland owners in Florida have several sources
available for information about marketing products International Paper Company
and many are free of charge. P. 0. Box 2448
Mobile, AL 36601 (205)457-8961
Florida Division of Forestry
County Foresters offer technical service to ITT Rayonier, Inc.
Southeast Timber Division
woodland owners. These services may include P. 0. Box 728
timber cruising, forest management plans, and sales Fernandina Beach, FL 32034 (904)261-3631
information. The county forester's office is generally located in the county seat and listed in the Louisiana-Pacific Corporation
telephone directory under county offices. P. 0. Box 1267
Crestview, FL 32536 (904)892-3175
Forestry Extension, University of Florida T. R. Miller Mill Company, Inc.
P. 0. Box 708
Services related to the educational needs of Brewton, AL 36426 (205)867-4331
public groups and professional foresters may be obtained from forestry specialists located in the Union Camp Corporation
School of Forest Resources and Conservation, P. 0. Box 1391
University of Florida. Requests for slide-tape pro- Savannah, GA 31402 (912)236-5771
grams, fact sheets, teaching, and demonstrations about marketing should be directed through your local county agricultural extension director. Other companies may be available; contact the
local county forester or agricultural extension agent Agricultural Stabilization and Con- for additional information about landowner proservation Service (ASCS) grams in your area.
ASCS will provide advice, information, and assistance about cost sharing benefits through the federally sponsored Forestry Incentive (FIP) and Forestry Consultants
the Agricultural Conservation (ACP) Programs for A forestry consultant is a professional forester
establishing a new forest crop after the harvest. who renders services to landowners for a fee. BeSoil Conservation Service (SCS) cause the fee may be based on percentage of your
timber sale, be assured that your economic interSCS offers resource planning and advice to land- ests are cared for. In most cases the consultant's owners in Florida, based on soil types. Local offices experience with timber sales and knowledge of the have access to forestry information through a current markets can increase revenues far in excess
forestry specialist at the state level. of his charges.
A list of forestry consulting firms may be obForest Industry tained from your local county forester or by writing
Several companies in Florida provide assistance to:
to landowners before and after a timber sale. Each company differs in the amount of assistance that Association of Consulting Foresters
Mr. Edward Stuart, Jr., Executive Director
will be provided and the terms under which the P. 0. Box 369
assistance will be given. Yorktown, VA 23690

Summary References
Many factors influence the amount of revenue you American Forest Institute. Directory of Forest Industries Proreceive from a timber sale. This fact sheet has iden- hiding Forest Management Services for Private Landowners in
tified several of the important ones, but individual the United States. Washington, D. C. 1978.
circumstances vary so there may be others. Before Fisher, R. F., Jensen, A. S., Post, D. M., Rockwood, D. L. Smith,
W. H., Sullivan, E. T. Forest Management for Small Ownerplacing your product on the market, decide which ships. University of Florida. Florida Cooperative Extension
factors are most important to you; then search out Service. 1979.
the services that are available. The difference be- Forest Resources Management for Small Woodland Owners.
tween marketing your forest product and just sell- University of Tennessee. Tennessee Cooperative Extension
ing your product could make a considerable dif- Service. 1978.
Martin, Ivan R. How to Find and Buy Woodlands. Eclectic, ference in your bank account. Alabama: Resource Associates, P. 0. Box 268. 1979.
Norris, F. W. Timber-mart South. Highlands, N. C.: P. 0. 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 information to further the purpose of the May 8 and June 30, 1914 Acts of Congress;and is authorized to provide research, educa- IPaD tonal information and other services only to individuals and institutions that function without regard to race, color, sex or 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 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.