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hairmetal4ever

growing timber for profit??

hairmetal4ever
17 years ago

My friend owns 122 acres of former farmland in Southeastern Ohio. Currently, about 11 acres is wooded but the rest is open grassland and wildflowers. He got it for a steal about a year ago.

He has toyed with the idea of planting a fast-growing timber tree such as black walnut or black cherry, then in 40 years or so harvesting for timber. He's 27 now so would like to have something ready to harvest when he is of retirement age.

1-can this be done profitably?

2-are these two good species to use for a relatively fast turnaround?

3-how can you determine market prices?

4-Will lumber companies come cut your trees?

5-Is it more profitable to cut them yourself and sell the logs?

Comments (20)

  • handymac
    17 years ago
    last modified: 9 years ago

    Yes, at current market prices and today's practices, timber farming can be profitable.

    I see absolutely no way to predict even ten years into the future, much less 40.

  • Pooh Bear
    17 years ago
    last modified: 9 years ago

    20 years ago black walnut trees were so valuable that
    theives were sneeking into national forests with chainsaws
    that had car mufflers on them to keep them quiet while they
    cut down and stole the black walnut trees.
    I read an article about this in Wood magazine at the time.

    I considered planting our whole place in black walnut after that.
    Kinda glad I didn't now cause we sold the place and moved.
    I had thought that I live there my whole life.
    20 years later I'm living in a new place and I like it better.

    Lots of tree farms around here for growing pulpwood to make paper.
    I guess it is better if you own the property but don't live on it.
    Cause if you live on it you never know when you might decide to move.
    But if you don't live there how can you guard your trees.

    Personally I believe it to be a great thought.
    But a hard thing to make work in the long run.

    No matter how it all works out in the end,
    I can't imagine that planting trees would be a bad thing.
    Especially trees with such potential value later on.
    -------------------
    1-can this be done profitably? Yes, for a retirement fund.
    2-are these two good species to use for a relatively fast turnaround? No, they are very slow growth trees.
    3-how can you determine market prices? Depends on how far you take them into the market. Lumber in the round, sawn lumber, kiln dried, planed. The more you can do the more money you can make.
    4-Will lumber companies come cut your trees? Log brokers will. They sell to the sawmills.
    5-Is it more profitable to cut them yourself and sell the logs? Yes. But it is very hard and dangerous work.

    --------------------

    Pooh Bear

  • hairmetal4ever
    Original Author
    17 years ago
    last modified: 9 years ago

    I disagree about these being slow growing. I've seen both Black Walnut and Black Cherry make 20' in height in less than a decade.

  • Pooh Bear
    17 years ago
    last modified: 9 years ago

    What about diameter.
    It's no good to sawmills without sufficient diameter.

    Pooh Bear

  • jrdwyer
    17 years ago
    last modified: 9 years ago

    I work as a consulting forester helping private landowners manage and sell their hardwood timber.

    First, I am biased towards trees and so I would definitely recommend planting non-productive cropland and pasture back into trees for many reasons. These include wildlife habitat, soil and watershed protection, and as a long-term timber investment. Sometimes federal or state government cost-share assistance is available to help lower the initial planting cost.

    The rate of return from growing hardwood seedlings to sawtimber in the eastern USA is likely to be low on typical or average soils. Tree planting costs can be fairly high and must be carried through the whole rotation. A 40 year old walnut tree is young and will have small diameter, low sawtimber volume, and relatively low value. By letting the tree grow to 60 or even 80 years, the volume and value will dramatically increase. This of course changes the investment horizon.

    Many of my clients do achieve a high rate of return from selective timber harvesting where I mark a stand of trees to remove not only the financially mature trees but also the junk. This can be done every 15-20 years and the rates of return can be 10% or greater depending on species and site. You do typically have to let the forest get to be 60-80 years old before the first good commercial harvest is feasible. Again, typical means average type soils and the woods not having a history of management.

    Both tree specis are good choices because they are unique to N. America and are valuable hardwoods. Black walnut (and black cherry south of Penn.) requires good soils and/or suitable aspects for good growth. Tree diversity when planting is necessary to avoid pests that can potentially wipe out a given species (aka emerald ash borer). Get a local forester to meet with your friend and look at the planting area. The state has extension foresters for advice and our organization (ACF) has consulting foresters in your area.

    Current market prices for hardwood timber for a given area are best determined by selling timber. In the absence of such information, contact a consulting forester who has it.

    Timber buyers range from independent loggers to timber brokers to saw mills/veneer mills. Prices offered by any of these entities can vary dramatically. Let the seller beware.

    Logging is hard and dangerous work. Hats off to those who do it! Loggers do best selling the highest or best grade logs of valuable species. They are at the mercy of what sawmills will pay them for the low grade logs and with less desirable species (red oak, as of late). This can vary quite a bit from season to season and year to year. When sawmills are full of logs, the log buying often stops. Also remember that logs are perishable items.

    The only advice I will give concerning the long-term prospects of growing hardwood trees is to grow quality. Pick the right trees for the site, actively manage the woodland using thinning and/or pruning, and grow trees to a size that will produce high grades and yields of lumber and/or veneer. We still have lots of young (20-50 year old), low-grade trees in forests that are not being actively managed. Here lies the best investment opportunity.

    Joe Dwyer
    Dwyer Forestry Consulting

    Here is a link that might be useful: Association of Consulting Foresters

  • lakebuilder
    17 years ago
    last modified: 9 years ago

    ""We still have lots of young (20-50 year old), low-grade trees in forests that are not being actively managed. Here lies the best investment opportunity.""

    Joe: Does this mean that ones investment dollars are better spent on some wooded land that has some mature timber but has not been managed? There is a lot of that type of ground up here in MN, but it typically fetches 2500 or more as hunting land. I can't get my pencil sharp enough to figure out how to make any long term profit from that unless it continues to appreciate, which is a long long shot in my estimation.

  • brickeyee
    17 years ago
    last modified: 9 years ago

    "I've seen both Black Walnut and Black Cherry make 20' in height in less than a decade."

    Height is not really the issue, diameter is.
    Both cherry and walnut are slow growing compared to evergreens used for softwood lumber.

    Often the biggest advantage to growing hardwoods is a break in taxes.
    You can investigate what the local requirements are to get an agricultural tax break if the property is dedicated to lumber growth.

  • jrdwyer
    17 years ago
    last modified: 9 years ago

    Lakebuilder, timber definitely is a better financial investment when the carrying time or rotation is shorter. A 25 year old stand of trees can have a timber value of $0 in many hardwood growing areas where pulpwood is a very secondary product. The timber value will then start to rise and rise sharply when the trees enter sawtimber and veneer classes at 40-70 years and finally palteau when the growth rates start to decline. Not paying for tree planting and having to carry that cost over an additional 25 years really helps the rate of return.

    I spent some time at forestry classes up at the UMN field station near Cloquet, MN. Lots of mixed conifer and aspen stands and some nice red pine and of course the jack pine thickets. Lots of LP OSB plants and Diamond Brand matches using that aspen. And the big mosquitoes that laugh at 50 degree weather like it was nothing.

    Wow, $2,500 per acre for rural hunting land with no building site? People must be doing pretty well in the Twin Cities. I would say that is definitely overpriced (from a timber and bare land standpoint) for the average 20-40 year old mixed stand in that area. It goes to show that timber as an investment is only a small part of why people purchase rural land.

    I am saving to buy a rural wooded tract with young timber in Southern Indiana. I hope to pay around $750-$1,000/acre for young timber and then improve the woods and maybe have a selective cut before I kick the bucket in 30-40 years.

    The tax breaks can be a very good deal. Indiana appraises Classified Forestland at $1/acre and Iowa eliminates all tax for such woodland, as two examples.

  • spook0829
    17 years ago
    last modified: 9 years ago

    What about growing trees for all those wood carvers out there. The small pieces they buy are quite expensive, but they usually don't buy a lot at any one time probably a storage problem

  • tomh_in_pa
    17 years ago
    last modified: 9 years ago

    Also consider putting the ground in Conservation Reserve (CRP or CREP). You get payments for 10-15 years at the going local rental rate. Planting trees should be acceptable on CRP ground but check with your county agent first (in fact on CREP ground they'll probably require and pay for planting trees).

  • jmlandtimber_aol_com
    13 years ago
    last modified: 9 years ago

    Im a timber broker from Texas and I think if you want to plant a hardwood plantation, GO FOR IT. I dont understand why it is being said that you have to wait 70 years for harvesting. Now take it that we dont plant many black walnuts around here, but we do plant red oaks, poplars, cottonwoods, and pines. On all of these, and this is taking for granted that the planting site was prepared and maintained for weed management so as not to compete with crop trees. If planted with a tree density of 450-650 trees per acre, you can get your first thinning at 15-18 years with the DBH(Diameter Base Height) at around 8-10 inches. This will all be pulpwood, but sought after by papermills. After 21-25 years you can do a second thinning with the DBH around 14 inches, but not enough height for a tie log. Then after youve thinned down to about 180 trees per acre, just set on them as long as you want. Of course the longer you wait, the bigger they will get. The basic idea is plant them thick and they will grow straight up instead of out. Then thin them to get diameter, but leave enough space between rows to bushog or mow so your timber wont have to compete with weeds for light and nutrients. Im not the smartest person in the world, but thats my take on it. If anybody wants it.

  • brickeyee
    13 years ago
    last modified: 9 years ago

    "Im a timber broker from Texas..."

    Then you should well understand that growth cycles in Ohio (the OP's location) and Texas are VERY different.

    Hardwoods have their best value when grown slowly.

  • jolj
    13 years ago
    last modified: 9 years ago

    I have pines, which will be thinned in 16 year from planting, then cut at 20-25 years. Your friend needs to talk to a hardwood grower & the state forest agent. He could do better if he planted some pine as well as the hardwood.
    Pines sell for less, but they sale 4 times to 1(thinning & cutting two stands in 40 years). If he does it right he could have a third stand up in that time, what if he lives to be 90
    something?
    Good Luck.

  • Delikato2005_yahoo_com
    12 years ago
    last modified: 9 years ago

    For anyone to know:

    We first became involved with reforestation in India in 1995. Since then they operated projects in Costa Rica and began their first major project in Colombia in 2006

    The Amazon Reforestation program is planting trees in the Orinoco River basin of Colombia. People from all over the world can participate by financing our tree planting efforts and the care of those trees, and earning a respectable return from the future sale of the tropical trees they helped to plant.

    We invite and introduce companies and people committed to improving the environment and providing habitat for endangered wildlife to join us as Joint Venture Partners ("JVP") in this financially sustainable afforestation and reforestation efforts.

    Further details upon request

    Quote: Money does not grow on trees..They do when you are in timber

  • jrdwyer
    12 years ago
    last modified: 9 years ago

    Even though it's 4.5 years later, this thread has come back to life. I'll update things for any interested readers.

    Lumber and timber markets for most species hit rock bottom in '09 after the financial/housing bust. Both volume sold/cut and prices paid were shockingly low compared to historical standards. Many loggers and sawmills went out of business. I advised many clients to not sell in '09 and just let the trees grow.

    Things picked up in late '09 and into '10. Timber/lumber prices for many species like red oak, ash, white oak, yellow poplar, etc. came back to more normal or acceptable levels and buyer interest and enthusiasm also improved. Hard maple and cherry are still off the sky high prices hits in '06/'07. Walnut, due to its scarcity and great international markets, never dropped that much through the financial crisis, especially for veneer quality trees. For example, I sold veneer quality black walnut trees/stumpage in Feb. '09 for $8/b.f. These were 24-28 inch diameter (chest ht.) trees, 60-75 years old, growing on excellent soils in a healthy (no fire history, cattle grazing, etc.) forest. This is obviously not typical, but it does show the potential for great returns with walnut.

    Things have been pretty steady in the central hardwood market where I work and more landowners are selling this year to take advantage of 15% capital gains tax rate that will likely go away soon due to budget deficits.

    Planting and growing trees for future timber harvest is very dependent on local site conditions and local timber markets. Advice given based on different geographic locations with different tree species/markets doesn't really apply to someone in southeastern Ohio (originally poster's location). Seek the advice of a professional forester in your area before making any important decisions.

  • tralblaz
    12 years ago
    last modified: 9 years ago

    I am interested in maybe doing this myself. I own an acre that use to be part of a farm and I was wondering if an acre of trees would be profitable, who would I contact abpout planting the trees and is there any legal actions that would need to be done before planting?

  • carklinky
    12 years ago
    last modified: 9 years ago

    Value of trees?

    I grew up in a large city and now own 30 acres in upstate NY.

    I was wondering what the value of 3 Black Walnut trees about 55" circumference and 100 feet high would be?

    Also, someone planted about 300 pine trees in 3 incredibly straight rows fairly close together. They are now at least 80 feet high and 4-6 feet in circumference with very straight trunks. Can someone guesstimate a value? All the trees are near roads or paths. I don't know what kind of pine, the needles are fairly small. Thank you.

  • karinl
    12 years ago
    last modified: 9 years ago

    Best to start your own thread, but also, your best answer will come from a local source. Try finding a local buyer, maybe through a tree removal company if you can't find a listing.

    Karin L

  • Norman Graham
    5 years ago

    When the price of timber goes up, Tree theft increases. Shockingly, I'm missing my Shag Bark Hickory's. It's because the price for hickory is huge. someone cut the trees, literally, down without a stump above 1 inch above the ground. It's nearly impossible to guard trees for years. As you have more, and do not visit them often, it's nearly a guarantee that some trees will be cut and stolen.

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