How much money is an acre of pine trees worth
How Much Money is an Acre of Timber Worth?
Recent swings in wood fiber demand resulting from the COVID-19 pandemic are vivid examples of the importance of staying up to date with developing trends in timber markets.
For instance, the huge demand shift for tissue products coupled with the slowdown in construction over the last several months presented an ideal time to market and sell timber from young pine stands. Likewise, there will also be good sales opportunities for older pine sawtimber as new home construction gets back on track over the next few months.
Based on these tremendous shifts in the market, I wanted to draft an update of our most popular blog post ever (How Much Money is an Acre of Timber Worth?) to provide some revised trends, context, and related information about the value of pine timber per acre. Since we’re talking dollars and cents, it’s always instructive to stay abreast of market movements during periods of significant turbulence.
The original blog post analyzed values based on a rolling 12-month time frame. This new update will provide more detail by looking at values over a full 3-year period (2017-2019). In keeping with the format of the original post, the information below includes pine stumpage[i] values from timber sales across the US South for both natural and plantation stands that were harvested either in thinning (selective tree removal) or clearcut (complete harvest) operations.
What Drives Timber Prices?
Before we can determine how much an acre of timber is worth, we first need to understand the law of supply and demand ultimately drives the price of timber. Demand is heavily influenced by location, surrounding mill types, proximity to those mills, and the volume and type of timber products consumed in a given area. The volume and types of products available on a tract of timber will therefore determine the value per acre.
For example, larger pine logs used to manufacture top-quality grades of lumber are more valuable in a region with multiple sawmills than are smaller logs that are converted to woodchips to make pulp and paper products.
Timberland owners in the US South who manage their land for timber production predominately manage for the growth of large pine logs. These pine timber stands most often go through even-aged management regimes where the majority of the trees present are the same age (+/- a couple of years). Even-aged plantation pine stands typically experience 1-2 commercial thinnings and one final commercial harvest, or clearcut. When following this model, thinnings typically remove smaller trees at younger ages and clearcuts remove the remainder of the larger trees at older ages.
As a result, the size of the trees removed during thinnings and clearcuts are quite different and therefore vary in value. In general, pine logs fall into one of the following categories:
- Logs 5”-7” diameter at breast height (DBH) are considered “pulpwood”
- Logs 8”-11” DBH are considered “chip-n-saw” (CNS)
- Logs 12”+ DBH in diameter are considered “sawtimber”
For this new analysis, I analyzed US South prices for plantation pine stands on a per-acre basis by harvest type (thinning vs. clearcut) and age class (less than 15 years old, 16-20 years old, 21-25 years old and 26+ years old). I also analyzed US South prices for natural pine stands by harvest type (concise age class data is unavailable for these harvests).
With that said, let’s explore the question…
How Much Money is an Acre of Timber Worth?
Plantation Pine Stands
Not surprisingly, first thinnings of young timber brought lower prices from 2017-2019 due to the smaller trees that were removed; only pulpwood and smaller logs that fall into the chip-n-saw category are harvested at this time. However, second thinnings in the 21-25 age class typically remove more than just pulpwood, including larger chip-n-saw logs and smaller-diameter sawtimber.
Clearcuts, on the other hand, typically carry a higher price per acre due to the average size of the trees and the volumes of material removed. Most landowners prefer to clearcut their timberland when it is in the 26+ age class, since a majority of the trees have reached the higher-value sawtimber category.
However, it is important to note a clearcut will remove all standing timber on a tract of land, which, even in the case of a managed forest in the 26+ age class, will include both pulpwood and chip-n-saw logs. This mixture of harvested timber products will ultimately affect the price per acre.
Some obvious and expected trends can be detected from the data above, namely, clearcut harvests of older timber are more valuable per acre. However, there are a couple of notable trends as well:
- Thinnings of CNS and small sawtimber in the 16-25 ages classes command a higher price per ton than pulpwood, but the price differential between the age classes is minimal. This is typically governed by the fact that thinnings in higher age class stands are less common and usually yield less volume per acre, which results in a lower price per acre.
- Thinning values per acre for CNS and small sawtimber in the 16-25 age classes were up in 2018 but dropped markedly in 2019—a sign that supply of these products outpaced demand in that year.
- Like thinnings, clearcut values per acre for timber in the higher-value age classes all decreased in 2019, also a sign that supply outstripped demand.
Natural Pine Stands
Individual age class data is unavailable for natural stands of timber, however, the harvest information of natural pine stands illustrates similar price-per-acre ranges as the plantation pine harvest data. There are a couple of considerations to keep in mind when analyzing the natural pine data:
- Naturally regenerated stands of pine timber often have a higher density of trees than do plantations. During thinnings on natural stands, more material is therefore typically removed, resulting in an increase in volume and price per acre.
- The clearcut price per acre on natural pine stands is slightly higher due to the presence of some hardwood sawtimber that is harvested along with the pine during a clearcut, which carries a higher price than pine in the current market. Older timber stands also typically allow for larger trees, which can affect the total stand volume or the price per tree. The increased timber volumes combined with a mix of hardwood sawtimber will result in a higher price per acre.
In the chart above, the expected higher stumpage value for clearcut timber sales is evident. Unlike the plantation data, there is a clear trend of increasing stumpage prices over the three-year period for both clearcut and thinning timber sales on natural stands.
For a quick comparison of the two, the table below illustrates clearcut values of sawtimber-sized logs from both plantation and natural timber stands over the last three years.
Pine Timber Values/Acre
*Average of all age classes excluding <15 (clearcut)
Importance of Current, Reliable Pricing Data
This kind of information can be very useful in determining emerging market trends, which can be used to guide operational and strategic planning for both sellers and purchasers of pine timber.
For sellers, a trained forester is essential to provide insight into local market dynamics and help determine an accurate amount of merchantable wood that exists on an acre of timberland. Prices for timber products can vary considerably even from county to county in a specific region based on demand.
As detailed in the data above, there can be significant yearly swings in timber prices based on product type, age class and harvest type. Forest2Market’s direct market price data and specific harvest volume information provide the most complete and accurate timber pricing service in the southern US. Our timber price database is continually updated and contains comprehensive sales data from more than $6 billion in actual timber transactions across the entire region.
[i] “Stumpage” is the term used for the purchase price of standing timber and the rights to harvest that timber. In the South, stumpage is most often quoted in dollars per ton of wood, so we used that measurement to arrive at our values.
Few acres can yield big timber profits
MISSISSIPPI STATE -- Landowners with as few as five acres can manage their land for pine timber production, and an often overlooked byproduct can add to the profits.
Tim Traugott, a Mississippi State University Extension Service forestry professor, said in the past landowners needed 20 to 40 acres of land to make timber production economically feasible. With today's market situation and prices, however, five acres of pine trees is more than enough.
"If a landowner plants five acres of pine trees today and manages it the way it should be managed, he or she can expect a return of $25,000-plus -- it could be much more than that -- when it matures at 35 years of age," Traugott said. "Timber buyers routinely purchase tracts of five acres or less."
Case studies show existing pine stands can earn an average of about $100 to $150 per acre per year.
"That doesn't mean you plant the trees and get $100 to $150 a year -- landowners must properly manage the timber, thinning a few times over the 35-year lifespan. When the timber is harvested after 35 years, the profit will equal about $100 to $150 per acre per year," Traugott said.
Traugott said his data is based on timber that is managed as a crop, much like the management techniques used by producers of soybeans, cotton and other traditional crops. Without proper management, pine trees cannot be expected to generate these high profits.
"No matter how many acres you have, you need to manage it like a crop. If landowners seek professional help, manage the timber just like they would any other crop and market the crop properly, a five-acre pine tract will make them a tremendous amount of money," Traugott said.
Small-acreage pine plantations work because good management produces a higher volume of timber. With proper management, a landowner could produce the same volume of timber on a five-acre tract that could be produced on a 25-acre tract that has not been properly managed.
"Landowners need to understand it's not the number of acres that matters; it's the volume of timber on those acres. If you plant in pine trees and manage it properly, you're going to have high timber volumes," Traugott said.
Extension forester Britton Hatcher said selling timber at maturity is not the only opportunity landowners have to make money off pine trees. An often overlooked source of income is the pine straw that gathers on the forest floor each year.
"A lot of people here in the South are looking at a product every day that they don't realize can make them money. It is possible for landowners with pine stands in the right condition and location to make $150 or more per acre per year by selling the pine needles for mulch," Hatcher said. "If a landowner does all the work on five acres, yields 100 bales per acre and wholesales the straw for $3 per bale, those five acres could yield $1,500 per year."
Landowners can choose to harvest the pine straw themselves or contract with a harvester to do the work for them. The benefits of hiring someone else to harvest may outweigh the reduction in overall profit.
"Landowners who contract with someone to harvest their pine straw can make a considerable income, plus they don't have to do the work themselves. Not only can a landowner make money from their straw, but getting the pine straw up also helps to reduce a potential fire hazard," Hatcher said.
Hatcher said managing a pine tree for straw production is not difficult: pine trees inevitably drop the needles, and landowners can simply gather them for baling.
There are two main methods of harvesting pine straw. Buying equipment to mechanically harvest is less labor-intensive but can become rather expensive. A relatively simple and inexpensive method is to purchase a hand baler, which is more labor-intensive.
Pine stands must be at least 6 to 8 years old to produce enough pine straw to make baling economically worthwhile, and baling can extend until the stand's first thinning. Once logging debris is cleared, needle harvest can continue after the thinning.
Needle fall starts in late October or early November and can continue until April. Pine straw yields, depending on harvest method, are estimated at 100 or more bales per acre for healthy, growing pine stands. Landowners who are willing to fertilize have the potential to see more than 250 bales per acre.
"There's a square bale that averages about 15 to 20 pounds and a round bale that weighs about 40 pounds. The square bale has been known to bring as high as $6 or $7 per bale, and the round bale has sold for more than $12 per bale," Hatcher said. "If you're the landowner and you're doing all the work yourself and start wholesaling or retailing it, you're talking about a good bit of money."
Pine straw contains nutrients vital to tree growth, so landowners should fertilize stands with diammonium phosphate to replace the nutrients lost in baling.
Hatcher warned that producers are not allowed to harvest pine straw on lands enrolled in the U.S. Department of Agriculture's Conservation Reserve Program.
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On cars parked on the bike path, unknown persons wrote in pink paint: “Don't bet here”. We asked the townspeople how they feel about this method of punishing auto cads, and more than 60% of Yekaterinburg residents supported the people's avengers. Here is what readers of E1.RU wrote:
- About the spheres on Ryabinin Street: they were removed because of the shops, especially Red and White, they tried, because it was impossible to drive up to them for unloading. Now the sidewalk on Ryabinin has been turned into a roadway.
- The ghetto was built, normal public transport was not delivered, and there was nowhere to put private cars. Walking, right?
- Well, in a good way, people do not understand! If you can't park a car there, why do they park it there?
Photo: E1.RU reader
— Catch a life hack. Next time use blue and yellow paint. Then these troughs are also evacuated.
- I hope they will not be limited to a one-time action? In the Academy, graffiti artists have a place to turn around.
- Walk along Sakharov and Mekhrentsev, please! They made fun of the traffic police: firstly, there is such a confused form of treatment that not everyone decides to get involved; secondly, this is how enthusiastic a person should be in order to do someone else's work, not only take a picture, register, and then appear at the traffic police to testify, they will also give the applicant's information to the violator. Given that violating people are not burdened with conscience, and often with intellect, this can be fraught.
— Creative, bright. Norm! I don’t understand one thing, how did the spheres interfere with the prosecutor’s office? Or some poor fellow broke his nose while drunk?
- The spheres were removed because one villager didn't like them standing there. He took it and wrote to the prosecutor's office. I put the spheres so that people could pass between the 19th and 21st houses. There was constantly forced to pass through, neither with a stroller to pass, nor for a disabled person to pass. I had to get out on the road. They stayed there for two days. Again, the resident did not like it! Complained and they were removed!
Photo: E1.RU reader
— Debatable! But there has become an overabundance of car dealerships, regardless of whether there are parking spaces nearby or not. As soon as one starts - it works out the herd instinct, then emergency exits from pilots and pilotesses - and the next acre becomes dangerous for walking.
- Strollers and bicycles in the entrances also need to be painted.
- How much I wrote about this - the traffic police gives replies and is inactive! When will Ryabinin be cleared of parked cars? Either remove the signs, or the cars! The same people are parked on the sidewalks, whether on the forehead or on the forehead.
— We have on Bardina, 37 in general, such goats are parked right in the clearing behind the house. Zadolbali, and I want to pour paint. The region of one machine is 21, the other is local. Appeared before the new year. Two steps away is paid parking, and obviously illegal, they don’t want to put it there. The whole field was destroyed. They waited with the tenants that they would remove it. But, apparently, it is necessary to take a picture of the elder in the house and send it to the traffic police. It’s right that they covered it with paint in the Academy. We also have cars, but we park in the parking lot.
Photo: E1.RU reader
— This is petty hooliganism. People who cannot say their opinion in the face do it secretly, vandalizing people's property in their absence. The action is provided for in the article. Just like a parking violation.
- Well done, they are doing the right thing. If possible, come to Vonsovsky Street too, the same thing is happening. The traffic police ignores the appeals of citizens. The administration of the city of Yekaterinburg can only deal with replies.
— I do not support vandalism, but I fully share the attitude of the authors of the masterpiece. The city is filled with cars, and there is no rest from them. I would also like to do something with the emergency lights on the emergency gang.
We told how residents of a house in the center of Yekaterinburg struggle with a woman who parks on the lawn. Her maneuvers were recorded by surveillance cameras.
- In Yekaterinburg, vandals poured paint on a minibus with Armenian license plates
- Where did he mess up like that? "Vysotsky" got a "monument" from the fighters with autohams
- “We were returning to the beginning of the street.” In Yekaterinburg, a car hack blocked the exit from a wooden sidewalk for pedestrians
- “Work out parking in reverse”: residents of a house in Yekaterinburg are fighting a woman who puts her car on the lawn
- “Mockery” vs “Ignorance of traffic rules”.