Land Smart Resources

Despite the conventional wisdom that timber prices are low, South40 Partners has recently seen strong prices for pine and hardwood pulpwood.  Check out these recent sales:

South40 Partners
May, 2009 Timber Sales
Sealed-Bid Sale Method

County                    Timber Type                Pre-sale Appraisal    Top Bid     # of Bids
Walker, AL             mostly pulpwood        $46,458                     $62,222       9
Jefferson, AL         mostly pulpwood        $37,298                     $51,593        7
Shelby, AL              mostly pulpwood        $60,456                     $87,670       7

As you can see, the top bid was significantly higher than the pre-sale appraisal which was based on prices seen over the previous 6 months.  Clearly, prices are stronger than expected for pulpwood.

With the recent dramatic decline in pine sawtimber prices, (due to a 65% decline in new housing construction in the US over the past 2 years) many timberland owners are focusing more attention on pulpwood harvests to meet cash flow needs.  South40 Partners recommends that timberland owners defer, if possible, the more valuable pine sawtimber harvests until prices increase.  Tom Brickman with South40 Partners says, “after 33 years in the business, we’ve seen downturns in pine sawtimber prices before.  The beauty is that it just keeps on growing while you wait for prices to come back, and they always do eventually.”

South40 recommends that timberland owners continue with “1st thins” on planted pine stands regardless of price because thinning is the key to protecting the health of the forest and to speeding up the growth of pine sawtimber which is much more valuable (worth about 8 to 10 times as much as pulpwood in normal times).  In addition, many landowners own large acreages of hardwood pulpwood, which is much less profitable than pine in the long run.  Tom Brickman says, “many landowners love their hardwoods and place a high value on them for wildlife and aesthetic reasons.  There are many good reasons not to cut hardwoods.  But if a landowner wants to maximize financial benefit from owning timber, now is a good time to sell these kinds of low-value stands and get the land into pine production.”

Especially during today’s difficult economic times, landowners need to evaluate non-timber revenue from the land. The Alabama Forestry Association (AFA), a non-profit trade association representing the forestry community of Alabama, is offering a May 30th Landowner Workshop focusing on Carbon Offset Markets and Mitigation and Conservation Banks.

Call South40 Partners at 205-936-2160 for more info on managing your timberland.