Stand valuation
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Stand Valuation PowerPoint PPT Presentation


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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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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

  • Stumpage price is paid by the mill. They expect to absorb the cost of logging and still make a profit from the lumber.


The Desirability of the Timber


Desirability of the Timber Location


Quality of the Transaction


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


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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