This article appeared in our Aug/Sep 1998 Newsletter

Trees of all species are increasingly becoming a valuable commodity. As woodlot owners look to their woodlots for supplementary income, they usually ask "What do I have to sell?" and "What's it worth?" Ideally, your woodlot has a management plan that tells you what is growing on it, and how it is to be harvested. If not, this is definitely the best place to start. YSC can help you select a forestry professional to prepare a basic plan for your woodlot. In any event, unless you are well aware of the timber inventory of your woodlot, you should get a qualified impartial person to provide you with an estimate of the volume and quality of your wood.

How do I select a harvesting contractor? YSC can provide you with a list of contractors to choose from. "Caveat Emptor" is very much the rule here. Do ask for references from other woodlot owners in terms of how the contractor performed on their woodlot. Besides payments, the quality of the harvest, road building, compliance with environmental regulation etc. are all important issues.

What kind of payment arrangement should I make?

There are several ways that you can sell stumpage. If you have a very good idea of the quantity and quality of the wood for sale, you can sell your stumpage for a lump sum payment. This method is risky since there is no way to predict, with 100% accuracy, the quality and quantity of the volume harvested. The alternative is payment based on volume delivered to mills using the mills scale (i.e. $10/ tonne). This method requires more attention by you as the seller to check the volume harvested. However, the woodlot owner usually comes out ahead using this method for the reasons mentioned above. Important: use the mills unit of measure! Although many people prefer to have their wood measured in cords, few mills use this measure. The "cord" is an outmoded and ambiguous measure that causes a lot of confusion. YSC has worked out the fairest possible conversion factors for those that prefer to use this measure, but it is still only an estimate. If the wood is scaled by the tonne, the stumpage should be paid by the tonne.

What if I can't oversee the harvesting myself?

Because of constraints such as distance to the woodlot and time available, many people can't oversee the harvesting of their woodlot themselves. One solution is to get an independent knowledgeable person to keep an eye on the operation on your behalf. The YSC Harvest Supervision Program may be a suitable arrangement. This program requires a management plan as described above. Under this program, YSC staff monitors the harvest operations to ensure that everything is carried out in accordance with the agreement between the contractor and the owner.

What is my stumpage worth?

YSC can give you the range of prices and averages. Guidelines can also be obtained from other woodlot owners, contractors etc. Guidelines, ranges and averages is all you can obtain from these sources, since there are so many factors that determine the actual worth of your stumpage such as quality, distance from mills, road construction costs, method of harvest etc. The main consideration behind these factors is how much will the contractor receive when he sells the harvested products, and how much will it cost to harvest them. The stumpage that the contractor can pay is the difference between these two figures, less the contractors profit. YSC will provide you with ball-park figures for harvesting costs and trucking rates and the selling price of wood products at mills in this area. With this information you can form a pretty good general idea as to the stumpage value for products from your woodlot if conditions for harvesting on your woodlot are also close to average. 

Do I need a written contract?

Although many sales are settled with a handshake, it is far better to have a written contract that spells out what has been agreed upon in terms of 1)Description of your property 2)Time period of harvest 3)Harvesting method 4)Road Construction and pertinent permits(i.e. stream crossings) 5)Terms of payment 6)Special consideration (i.e. wildlife habitat) 7)Restrictions (i.e. no harvesting on Sundays, etc.) YSC has a standard stumpage contract form that you may use. YSC will deduct stumpage payments to the owners for wood sold through the Board if a copy of the contract signed by both parties is given to us. However, owners must realize that this does not guarantee that they will receive stumpage for all wood sold from their lot, since some mills may pay the contractor directly. If the contract stipulates that all the wood is to be sold through the Board, the owner has some assurance of getting all the stumpage provided that the agreement is adhered to. If you as an owner take reasonable precautions in selecting a contractor, inform yourself about stumpage rates and get advice from knowledgeable professionals, you can improve your woodlot and receive significant cash dividends at the same time.

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