timber pricing by log size or plf

Timber Pricing by Log Size or

Pounds per Lineal Foot (PLF)

Pounds per Lineal Foot (PLF)

• All logs are different and all loads are different. A standard measurement is required to ensure accuracy.

• Pounds per lineal foot (PLF) is a measure of log size, much like DBH or SED.

• PLF is a widely accepted industry standard for ensuring valid comparisons across all logs and all loads.

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Fundamentals of PLF

• PLF = (total weight of load) / (total lineal feet of load)• Weight is measured at the scale

• The number of lineal feet is determined by the scaler

Number of logs x Average length of load

• If load weights are uniform, then the total number of lineal feet for a load of logs (the divisor) is the main driver of PLF value.• Total lineal feet is a function of stem count:

Smaller logs = More stems per load = Lower PLF value

Larger logs = Fewer stems per load = Higher PLF value

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Examples of PLF Calculation

According to F2M data, the average load of logs in the South weighs 27.78 tons (with a standard deviation of 3.08 tons).

• 27.78 tons x 2000 pounds = 55,560 pounds

– 55,560 pounds ÷ load of small logs with a total of 2500 lineal feet = 22 PLF

– 55,560 pounds ÷ load of larger logs with a total of 1500 lineal feet = 37 PLF

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PLF Measurement at Mill Scale

Three measurements:

• Weight

• Average length of logs (by load)

• Number of logs (by load)

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Scaler directs truck to certain point, where logs are flush with “starting point”

and then counts the logs and measures average length.

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Counting logs is straightforward at 30 logs per load, but what about at 75 logs per load?

Frontal View

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Best Practice – Scaler “draws” imaginary cross hairs on the front of the load and

counts vertically and horizontally

Split = ½ log

8 logs across

9 logs down

8 x 9 = 72

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How Accurate Are Scalers?

• Very Best:– 1 log

– 1 foot

• Average:– 2 logs

– 2 feet

• Data suggest a normal distribution, so bias is minimal.

• Audit procedures vary. The best mills audit about 30 loads per month per scaler and give prompt feedback.

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Log Pricing

Log stumpage price per timber tract is highly correlated to log size (i.e., the larger the trees the higher the stumpage price.

R² = 0.7522$-

$10

$20

$30

$40

$50

$60

0 20 40 60 80 100 120

Stu

mp

age

Pri

ce ($

/to

n)

PLF

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Log Pricing

Log delivered price per load is correlated to log size, but variability is greater. Why?• Within a tract, individual

loads will have variable PLF values, even though pricing is constant (Slide 12).

• Among multiple tracts, variable costs and different levels of demand affect prices even though PLF’s are constant (Slide 13).

R2 = 0.5206MSE = 23.86

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Log Pricing—Single Tract

Variable PLF –Constant PriceA tract of timber will typically receive one price for CNS and one price for sawtimber, but will have variable PLFs due to multiple loads distributed throughout the tract. In this case, PLF will vary while delivered price remains constant.

$32

$37

$42

$46

$49

20 30 40 50 60 70 80 90 100

20 to 40 PLF

30 to 60 PLF

30 to 80 PLF

40 to 100 PLF

60 to 150 PLF

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Log Pricing—Among Multiple Tracts

Constant PLF –Variable Price

All tracts of timber in the market are not priced equally. Transportation and harvesting costs, as well as demand factors, will cause variability in pricing among tracts even though they have common PLF values.

$32

$37

$42

$46

$49

20 30 40 50 60 70 80 90 100

$27 to $37

$30 to $42

$35 to $46

$40 to $50

$40 to $55

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Log Pricing

Weighting price into PLF classes reduces variability.

R2 = 0.9677MSE = 1.81

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Supply Agreement Pricing

With a reliable price curve and accurate scaling measurements for CNS and saw-timber, a supply agreement can be based either on the price curve equation or agreed upon PLF values.

R2 = 0.9677MSE = 1.81

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Supply Agreement Pricing

The benefit of PLF:

• It is a simple calculation that can be made at the scale.

• It is defensible and therefore can be used for supply agreements.

F2M reports in PLF, but has correlations based on spread data load (spreading a load of logs in the yard and measuring each one separately) between PLF, DBH, and other log size measurements.

R2 = 0.9755MSE = 1.37

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Contact

Daniel StuberOperations ManagerForest2Market®, Inc.14045 Ballantyne Corporate PlaceSuite 150Charlotte, NC 28277

704-540-1440 ext. 21daniel.stuber@forest2market.com

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