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Revised November 2003 Private Land Section

Selling Wood From Your LandWhat You Should Know — What You Should Consider

Selling wood can be arewarding experience. The incomegenerated from the sale ofstanding timber (stumpage) canprovide good financial returnswhile allowing you to plan for thefuture of your woodlot.

Even though many Islanderscut and sell their own wood, mostdepend on forest contractors to dothe work.

Important decisions aboutselecting a contractor who suitsyour needs, determining how thisincome affects your personalfinances, or choosing the rightmanagement options for the futureof your woodlot are often notgiven the time and considerationthey deserve. This brochureoutlines several important factorsyou should consider when

planning a harvest on yourwoodlot and provides some foodfor thought about the future ofyour land.

What factors should Iconsider before I sell anywood?

There are several key factorswhich woodlot owners shouldconsider when planning to sellstumpage from their woodlot.They are:A. Which stand should be cut and

what products will beproduced?

B. What are the financialimplications from selling thewood?

C. What forest management andnon-timber factors should Iconsider before the harvestbegins?

D. Which contractor should Iselect?

A: Which site should be cutand what products will beproduced?

Each stand in your woodlothas a different economic andbiological potential. For instance,young spruce may be suitable forpulpwood right now; but if left togrow for several years, they mayproduce sawlogs or studwood,providing a higher rate of return.Hardwoods may be suited tofirewood, but individual trees,such as large, defect-free sugarmaple or yellow birch, mayproduce valuable hardwood logsor veneer.

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In fact, landowners who havedone some pre-harvest homeworkon the value of wood productshave received more for individuallogs and veneer tree pieces, thanfor all the trees harvested forfirewood.

While it is up to you to decidewhen you want to harvest, it isimportant to remember that eachstand also has an optimum harvestperiod. For instance, an old fieldwhite spruce stand shouldprobably be harvested by the timeit reaches 50 to 60 years of age(before these trees collapse anddie). On the other hand, a sugarmaple stand may live for severalhundred years, so your harvestwindow and management optionsare much more varied.

Both the product(s) and thevolume harvested will affect yourreturn, so be sure to understandwhat products are being harvestedand what price each one provides.

B: What are the financialimplications from sellingthe wood?

Income from selling yourwood is just that — income;therefore, there may be taxes due.However, it may also be possibleto write off some of your forestmanagement costs against this

income. Before you sign a contractand receive payment, consult withyour financial planner todetermine the best financialapproach for you, your pocketbookand your woodlot.

C: What forestmanagement and non-timber factors should Iconsider for the potentialharvest area?

The future of the harvestsite should be determined beforeany trees are cut; because,making the best managementdecision after the trees are gone isoften too late. It is important tohave an idea of what you want forthe future of your land before youbegin the harvest and record thoseaims in a forest management plan.

Each forest stand has its ownpotential and limitations. Forinstance, an over mature standmay have only one harvest option — clearcut. The site couldthen be reforested the following

year should you desire. However,for a healthy, mature black sprucestand, you could either clearcutand replant, or use strip cuts toremove 1/4 to 1/3 of the volume,and allow the remaining trees toprovide seed to renew the strips.After a few years, you couldharvest another 1/4 or 1/3 and soon, until the old stand is removedand the strips are covered inhealthy young trees. This providesincome over a longer period butthe individual returns are smallerand may be subject to changingmarket conditions.

For quality hardwood or pinestands, selection cutting shouldwork well. While it is often moreexpensive, and requires skill andplanning to do properly, selectioncutting can produce high valuetrees while promoting qualityyoung seedlings underneath for thenext forest generation. As well,while volume produced fromselection harvests is usually small,you can conduct a harvest everyfew years as opposed to onceevery 25 to 40 years and, overtime, the improved quality of thewood can lead to higher returns.

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When you prepare yourmanagement plan, ask thefollowing questions: • Are my objectives for this

area short-term (one to fiveyears) or long term (20 years,40 years or longer)? Yourdecisions today will impact theshort- and long-term value ofyour woodlot and its value toyou and your family.

• Does this stand have oneharvest/management optionor are there several options?Some harvest and managementoptions are dictated by thehealth and species compositionof the stand while othersdepend upon the objectives ofthe landowner such asaesthetics and wildlife.

• Do I need all of the incomeright now or would I bebetter off to take it over a fewyears? Spacing out a harvestcan provide income overseveral years. Clearing the areawill provide a larger one-timepayout but very little incomefor the next few decades.

D: Which contractorshould I select?

Often, landowners do notconsider harvesting options until acontractor comes knocking at thedoor. It is important to understandthat, while the contractorapproached you, you are under noobligation to select that companyor to sell your wood to anyone.

It is best to take the time toconsider your options and getsome more information by asking:

• Are the contractor and crewtrained in safe harvesting andfirst aid? Do they carryliability insurance andworkers’ compensationcoverage?

• Do they intend to clearcut oruse alternate harvestmethods? Alternate methodsrequire training and practice soyou should ask to see one ortwo sites where they havealready used the proposedharvest system.

• How do they intend to payyou? Many contractors provideat least partial payment up front,while others pay in one lumpsum.

• Will the payment be made bythe acre or by the cord? MostIsland woodlot owners preferthe “by the acre” systembecause it is easier to measurethe harvest area and determineproper payment. The total areais usually determined bymeasuring the outside edge ofthe area where any harvestactivity has occured. However,when certain high-value but lowvolume products, such as

veneer logs, are harvested, itmay be worthwhile to get anidea of their current valuebefore you agree on a price.

• What types of equipment willthey use and when will all ofthe wood be removed? Canthey work in wet or steep siteswithout damaging the area? Ifthey need to cross a farm field,will it be before or after thecrop is harvested? If they areusing a mechanical harvester,will it be working around the

• clock, disturbing the sleep ofyou or your neighbours? Willthere be problems with soilrutting and erosion?

• Will the contractor be on-siteor is the work supervised by acrew chief or foreman? If it issomeone else, be sure to meetthis person before the harvestbegins.

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• Who is responsible forrepairing, constructing andrepairing damage to roads,fields, bridges or otherstructures? It is usually too lateto complain after the harvestabout the condition of your haulroads. Be sure to put this inyour contract.

• Do you need permits toharvest in that area? Meetingenvironmental regulations orgetting access to public roadsmay require you to have specialpermits, so be sure to determinewho is responsible for thisbefore the harvest begins. Thecontractor should also check tosee if there are any protectedareas or species.

• Are they willing to enter intoa contract and include thepoints you agreed to? Acontract is your insurance thatthe terms you agreed upon aremet.

Contact several other contractorswho work in your area and ask thesame questions. It may also helpto get another couple of quotesbefore you decide to see if theprice offered is reasonable andfair. A contractors’ list is availablefrom all forest district offices.

• And finally, ask for a list ofwoodlot owners who haveused their services over thepast few months or years.Contact a few of them to see ifthey were satisfied with thework, payment and adherenceto the contract.

E: The HarvestWhen you are satisfied with the

information you obtained, makeyour decision based on what isbest for you and your woodlot. Aswell, for your protection, be sureto insist on a signed contractwhich includes all of the pointsyou consider to be important toyou.

If you would like help withyour forest management andharvest options, or if you want tohave the site planted, the PEIDepartment of Agriculture,Fisheries, Aquaculture andForestry offers advice andincentive programs for Islandlandowners. Contact the forestdistrict office nearest you for moreinformation.

District Forestry Offices

Eastern Forest District OfficeSouthamptonBox 29St. Peters Bay PE C0A 2A0Tel: (902) 961-7296Fax: (902) 961-7298

Central Forest District OfficeBeach Grove RoadBox 2000Charlottetown PE C1A 7N8Tel: (902) 368-4800Fax: (902) 368-4806

Western Forest District OfficeWellingtonBox 144Wellington Station RR#1PE C0B 2E0Tel: (902) 854-7260Fax: (902) 854-7448