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Stand Valuation

Stand Valuation. Factors Affecting Value of Timber. 1. The nature of the timber Species, total volumes, grade, etc. 2 . The nature of the tract on which the timber is located, and its market access; and 3 . The circumstances surrounding the sale

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Stand Valuation

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  1. Stand Valuation

  2. Factors Affecting Value of Timber • 1. The nature of the timber • Species, total volumes, grade, etc. • 2. The nature of the tract on which the timber is located, and its market access; and • 3. The circumstances surrounding the sale • Stumpage price is paid by the mill. They expect to absorb the cost of logging and still make a profit from the lumber.

  3. The Desirability of the Timber

  4. Desirability of the Timber Location

  5. Quality of the Transaction

  6. Sources of Timber Pricing • Comparable timber sales • Timber price reporting services • Timber Mart South • http://www.tn.gov/agriculture/publications/forestry/tfbp.pdf • Extraction from delivered log prices

  7. Not ready for harvest? • LEV – Land Expectation Value • Present Value = a/(1+i)t-1 • a = value received every t years in perpetuity • i = interest rate • t = years between annuity payments • This is covered in Timber Management class

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