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Turning thinnings into cash

Harvested timber falls into one of four categories, in ascending order of value: pulpwood, stakewood, small sawlog (commonly called boxwood or palletwood), and large sawlog.

Generally, pulpwood is material of any size that is of inferior quality and which cannot meet the specifications of the other categories.

Stakewood must be straight, clean and is cut in lengths of 1.6m to a minimum top diameter of 7cm. Small sawlog must also be straight and clean, and is normally cut to either 2.5m or 3.1m lengths to a minimum top diameter of 14cm.

Large sawlog, which in practice is only harvested from subsequent thinnings and clearfell, is cut in varying lengths according to the mill's requirements -- typically 4.9m -- and normally to a top diameter of 20cm, though occasionally it is possible to negotiate a slightly lower large sawlog price to a top diameter of just 16cm. The timber market is notoriously cyclical, so prices fluctuate considerably. At present, prices across the board are good, despite the recession.

A first thinning will yield mostly pulpwood, stakewood and some small sawlog, depending on the size of the material, so these are the markets to aim for when negotiating with buyers.

Fortunately, with the growing demand for wood to be used as fuel, the market for pulpwood has expanded considerably and the dependence on the pulp mills (eg, Medite in Clonmel and Smartply in Waterford) has correspondingly decreased.

The private owner now has a number of markets available for this low-value material. Not so long ago, a first thinning was frequently carried out at a loss, and any surplus was regarded as a bonus, whereas currently it is the norm.

If there is sufficient volume of potential stakewood to harvest and assuming there is a local market, it is likely to be worth pursuing. But bear in mind that stakewood costs more to harvest. Ultimately, it's a balancing act between the potential volume and the price differential. And, of course, it is most important to 'ration' the amount of palletwood removed at a first thinning and not to be seduced into achieving a higher return now as a crop can be ruined if the cream is removed too soon.

There are three methods of sale: standing, extracted to roadside and delivered in. With the first, the timber is sold standing to the purchaser at an agreed price, usually by category, and the purchaser assumes responsibility for harvesting.

With the second method, the owner engages a contractor to harvest and extract to roadside, and the buyer, or buyers, purchase the respective categories separately. With the third method, the vendor takes control of the entire operation, including haulage, and the purchaser pays a "mill-gate" price.

Standing sales are likely to remain the norm for most private owners. The great advantage to this method is simplicity. But there are potential dangers, so it is most important that the contractors engaged know what they are doing and that there is expert supervision on hand to ensure the right trees are harvested.

There are plenty of good, honest contractors, but inevitably there are some who are not so good. Establish the ground rules at the outset and then make sure they are adhered to.

Indo Farming