Trading Timber Volume for Value
By Thom J. McEvoy
The opportunity to obtain periodic income from wood production is one of the most tangible benefits of forests, but not necessarily the most important. Some owners prefer to affect changes in forest habitat for favored species; others simply want to improve access or to create a network of trails for recreation; and some want it all. Almost regardless of an owner’s primary interests in forests, timber opportunities will figure into the mix at some point. An owner also needs to know about managing forests for timber, even if periodic income from timber is the most subordinate objective.
There are two choices available to a manager who decides a particular stand or area is suitable for growing timber: manage for volume production, or manage for value. The two are related to a certain extent; strategies that increase volume growth will also increase value, and large trees are generally more valuable than smaller ones. However, the volume manager is concerned with fiber production – how to grow the maximum amount of useable wood fiber in the shortest amount of time. For example, paper companies are mostly concerned with volume production from their lands. Tree size and form is less important than growth rate. Although paper manufacturers are concerned with wood quality, especially as it affects the pulping process, a crooked tree is just as valuable as a straight one. The value manager, on the other hand, is concerned not so much with wood volumes but, rather, tree form and how much the marketplace will pay for wood when it is ready for harvest.
While the volume manager is focused on time and efficiency, the value manager is concerned with timber appreciation for end uses like veneer and/or high quality, defect-free lumber. Which perspective is correct: volume or value? The answer is, it depends – on local product markets, site quality and the woodland owner’s objectives. Most managers fall somewhere between the two extremes, balancing the need for cash to pay current expenses of owning forests (such as property taxes) with future gains when timber has reached its maximum value.
Does it pay to manage for value? Absolutely, but only if an owner can wait long enough and is not overly concerned with who reaps the benefit when timber values mature. For example, in parts of Europe where forests have been managed for much longer periods than anywhere in North America, a single 200-year-old tree is worth more than an entire acre’s worth of trees in some parts of the United States. Values are likely to have stayed within the family, but it is a sure bet the person who first decided to favor that tree is not around to see it harvested.
Growing valuable timber takes time, and patience – above all else – is the virtue of a value-oriented manager. A forest owner growing value is willing to bear the cost of management while passing the opportunity of income to future generations. For most people this is a difficult, if not impossible, choice. The value manager, more concerned with future values than current yields, is an altruist at heart.
Focusing silvicultural decisions on value requires predictions about future markets, which are not always easy. For example, who could have guessed 50 years ago that in New England red oak would be more valuable in today’s market than, say, sugar maple? Certainly not the people who then advocated “weeding” red oak from northern hardwood stands to favor other, more valuable species. Heeding this advice at the time might have seemed reasonable, but to have done so would prove to have had a tremendously negative effect on timber values today.
The assumptions of value managers are not always correct, and consumer trends are fickle. Although it is impossible to predict how consumer demand will affect future timber values, it is reasonable to assume that today’s commercially important species will be even more valuable in future markets, due primarily to scarcity. Less timber from public lands, and less timber from private lands owned by people who do not want to cut trees, means that timber from well-managed lands will be much more valuable in future markets. The value manager can take advantage of these trends by employing practices that grow straight, defect-free trees on good sites using long rotations – 50 to 100 percent longer than current guidelines, depending on the species, sites and prospective markets. A good rule of thumb to follow is that better sites are proportionally capable of longer rotations.
Aside from time, patience and generosity toward future generations, what are the best methods to grow valuable timber?
A first consideration is site quality. Trees will grow almost anywhere in the United States where there is adequate soil and moisture, but only the best soils are capable of growing valuable timber. These sites are located in coves and valleys, on the toe-slopes of hills (the transition between the side hill and the valley) and especially in areas where soils are derived from limestone or other nutrient-rich bedrock. Although it is impossible to say how much forestland in the regions meets these criteria, it is probably less than 20 percent. Sites that are not suitable for growing high-value timber are ridge tops, side slopes and sandy, excessively drained soils that are usually also nutrient-poor. Wet soils, or soils that are poorly drained, are also not suitable for long-rotation timber production.
The easiest way to locate productive soils is with the use of soil maps, which are available from the USDA-National Resource Conversation Service (visit www.nrcs.usda.gov and then search for your state to obtain local contact information). Not all areas in the country have been mapped, so the next best alternative is to ‘read’ site productivity from the trees in a stand. One of the best predictors of site quality is tree height. A tall stand of young sapling or pole-sized trees is a great indicator of a potentially excellent site. Foresters use a site-quality measure based on tree height and age called “site index” to predict a site’s ability to grow timber.
Once potentially productive sites are identified, the next task is to make sure the site is not susceptible to storm winds. Look for the telltale pit-and-mound topography that results from the root ball of an upended tree next to a hole where the roots used to be. Careful examination of the site will reveal hints about storm frequency and even the direction of storm winds. When storms are funneled down valleys, sites near the mouth of a valley show more evidence of blowdown than sites further up valley. This is caused by venturi effects; a sucking turbulence that develops when landforms compress and accelerate wind. Evidence of pit-and-mound topography on a site is a sign that storm winds may damage or blow down a stand before it reaches full value (maybe not in the current owner’s lifetime, but at some time during the life of that stand). Risk of blowdown is not necessarily a reason to always avoid these sites, especially if soils are highly productive. A manager who thinks strategically is able to recognize the risks and plan for the possibility of nature moving up the harvest date.
Depending on when in the life of a stand a manager makes the decision to focus on long rotations and high value, the principal cultural activity is periodic thinning. In young stands, thinning is often delayed to take advantage of competition from surrounding trees, also known as “trainers” because they train the stem to grow straight and true, forcing the canopy into the sun as much as possible.
High stem density in a young stand promotes69 height growth and helps lower branches prune naturally. When to start thinning is species and site-dependant, but in northern and central hardwoods the first thinning is delayed until the stand is at least 30 to 40 years old (on a good site), with subsequent thinnings at 10 to 40-year intervals.
The manager must always weigh the potential benefit of a thinning with the risks of damage to soils and residual trees. Why? Because even minor stem injuries can destroy future timber values. In all circumstances, thinning should be scheduled when trees are dormant and/or when soils are dry. In areas where forest soils freeze, schedule thinning during frozen ground conditions (especially if the thinning also involves timber extraction). The next best alternative, if frozen ground is not an option, is to schedule activities when soils are dry. Always bear in mind, however, that fine-textured soils (and the feeder roots in these fine soils) are more easily damaged from heavy equipment when soils are wet.
Careful tree felling and extraction practices are essential in high-value stands. Even a minor bark scrap in the butt log of a residual tree can reduce the stem value by hundreds, sometimes thousands, of dollars. Make sure logging contractors are skilled in directional felling practices, such as those taught in the Game of Logging.
Most loggers profess complete control over falling trees, but directional felling ability is not a matter of genetics, bravado or luck. It is a skill, learned as a set of practices that enable a logger to safely and accurately fell trees. If it is not possible to thin the stand while holding residual stem damage to an absolute minimum, you’re better off economically to not thin. This is a tough choice, but the value of accelerated growth is cancelled out by stem injuries that can have a permanently negative effect on product values when trees reach maturity.