Logging contract question

So, I just closed out a small sale that I supervised this winter. I was working with an individual who uses a small skidder/crawler operation, but that is only because he is a motorhead. If he knew anything about horses, or had any interest in animals, he would be an excellent Horselogger.

I marked the stand, and administered the sale exactly as I would have for a horse logger. It was a northern hardwood lot that had reasonable past management, but never quite enough improvement, so the stand had some good logs, but a lot of low grade.

I paid the logger $200/MBf for cutting and skidding 40Mbf of saw timber. With the quality of this timber that turned out to be a little over 1/2 after trucking and forester supervision and administration, which I agree is generally low. However we gave him the Fuelwood at no charge. He harvested nearly 150 cords of wood, which some foresters insist is worth $10/cd, but even when I collect for wood I generally say $5. I’ll get into that in a moment, but for now let’s say an extra $1500/40Mbf=$37.50/MBf making his actual logging cost more like $237.50/Mbf. He did not truck the wood away, and will process it on the landing, basically adding some more value for him to capture. Now we are getting up nearer 2/3.

The reason I gave him the wood, was so that he would have incentive to cut and utilize as much of the low grade as possible. If I had made a higher arrangement on saw timber, and charged him for Fuelwood, the income for the landowner would have been the same, and he would have been struggling to make ends meet on every cord of wood he harvested. In the end, the proof is in the woodlot.

The extra income he was able to secure for himself allowed him to operate with the craftsmanship that I presented to the landowners as our goal. They now have good multipurpose trails, aesthetically pleasing post logging impact, and over the next 30 years the residual stand of uneven-aged hardwood saplings, poles, and small saw timber will produce astounding value.

The end result of the economics of this job is that he landowners will have a few thousand dollars of income, but the next several harvests will be much more profitable. If we had tried to make this job more currently competitive, driving up stumpage, and marking more valuable trees and less low grade, then subsequent harvests would have the same low value mix. Wih the strategy we used, the LO will gain far more into the future, and continued improvement will be much more affordable, and cost effective.

I am not saying that you will find too many foresters, or even loggers, who will think this model is appropriate, as most are caught in financial constraints that require they recommend more immediate financial gains, or lose the job to competitors, but we are out here. In my mind the primary product is the residual stand. There is no doubt that folks have financial demands, but prudent forest improvement will always return far more gain in the long run, and if we all cut our woods like that, then eventually every timber sale could be both profitable and improving.

There is a significant cultural habit for squeezing loggers between high stumpage prices and the sawlog marketplace. I know many loggers who wince at the idea of getting paid good money for logging if it means that they will be paying lower stumpage than their counterparts. It’s like someone is giving them something, and there is a pride thing, like Red Oak, or White Pine, or Sugar Maple, is worth so much, and if I don’t pay that, I’ll never live it down at the saw shop.

There is no doubt that these guys do the best job they can, but that is just it, they do the best job they can given the financial constraints they choose to operate under. As a consultant I see so many compromises that have nothing to do with the character or skill of the operator, but can easily be attributed to economics. I strive to educate and encourage landowners and loggers to face into those compromises, and to find ways around the economic barriers to arriving at a high quality residual of aesthetics, ecology, and improved timber resource.

I just share this with you, to try to encourage you as a woodland owner to strive for more than a healthy log check. The cost of good advice may seem unnecessary, but with an eye to the future, it can turn out to be more valuable. Just looking for advice on a site like this is a good indication that you understand that.

These photos are post harvest. You may be able to see some good small sawlogs, nice poles, and some good saplings in the residual. There is also a fairly high stocking, which has aesthetic and ecological value. He cut exactly to my marking, and was able to retrieve everything without smashing down the residual. Photos are hard to use to reflect the actual, but good logging can be exciting to be a party to.

Good luck, Carl

• This reply was modified 9 years, 9 months ago by Carl Russell.