A Landowner's Guide to Selling Standing Timber - the Ontario ...

A LANDOWNER’S GUIDE TO SELLING STANDING TIMBER2. A scaled volume sale – provides payment basedon an agreed-upon price per thousand board feet ofsawlog volume, and two or three prices for variousveneer grades, according to a scaled volume. In thelast few years as hardwood veneer values haveescalated, this is probably the fairest system to bothbuyer and seller. A scaled volume sale should require asignificant deposit or, preferably, full payment for logsas they are scaled, before they leave your property.Under no circumstances should you allow logs to leaveyour property before they are scaled, and at leastpartial payment has been received.3. A shared value sale – payment is based on anagreed-upon split of the income received from mills forvarious products (for example, a fifty-fifty split for allsawlog volume, a sixty-forty split for veneer volume).This is basically another way of expressing the scaledvolume sale.Table #3: Payment by Scale After the Harvestand / or Shared Volume Sale (i.e., actual volume harvested)Advantages:i. There may be several grades of veneer, with some buyersinterested in more grades than others, depending on theirmarkets. There will be separate prices for each gradeDisadvantages:i. Who will do the scaling of the harvested logs? This needs to beaddressed prior to signing an agreement. Usually, the veneer will bescaled in the bush (at no charge) by the veneer buyer’s representative.i. This system is fairest to both buyer and seller (i.e., no surprisesdue to quality or quantity of high- value products).ii.With remote properties, or if the owner is otherwise unable to bepresent at the time the woodlot is being harvested, trust canbecome a factor. Assurances need to be made that all wood ismeasured before it leaves the property.iii.Landowner may receive additional value for high-quality products.iii.Utilization may be lower for products of lesser value. This not onlyimpacts the financial return to the landowner, it also impacts thequality of the job completed in the woodlot if low value treesmarked for removal are not harvested (i.e. residual crop treesmay not be released). Generally, interest is in the higher-valueproducts, not fuelwood.iv.A practical method for determining volume of certain species(e.g., cedar or poplar stands) where it is impractical for markingof individual trees.18