ENTERPRISE


SELLING WOOD


n the last issue of Smallwoods we looked at the importance of: getting the marketing of timber right; dealing with timber buyers; timber miles; timber markets; points of sale; and units of sale. In the second and final part of this timber marketing guide we consider: methods of sale; timber quality and categories; niche markets; timber valuation and sale contracts. The three most common methods of sale in the UK are negotiation, tender and auction. For most members, due to the relatively small amounts of timber being sold, the most practical method is likely to be negotiation. This entails entering into discussions with a potential buyer and agreeing terms. The main advantage of this method is that it is a relatively straightforward way of making a sale and it allows the seller to establish a relationship with potential buyers. Both parties are able to develop a greater understanding of each other’s requirements and objectives and this can greatly assist with


Marketing Timber I


the planning of future timber sales. If things progress well the invaluable establishment of trust develops. The clear drawback of a negotiated sale with a single buyer is that there is no way of ensuring the best current market price is being achieved. With this method having a good idea of the true value of the timber is very important for the seller, particularly when trust has yet to be established. Competitive sales of timber


by tender or auction are more widespread where the volume and value of the parcel is likely to attract interest from multiple buyers. By ensuring all interested parties are aware of other competing interests the buyer is encouraged to pay as much as possible in order to secure the timber. A supply/ demand imbalance can give rise to a buoyant market and in these circumstances sellers should seek to ensure the sale method is competitive in order to maximise the return.


A tender sale is conducted by inviting various buyers to submit


a written bid for the timber by a deadline, or closing date. One disadvantage is the need to spend time putting together formal sale details so that each buyer is offering on equal terms. An advantage is that the seller has time to assess the various merits of each offer after the deadline and make a considered choice as to which, if any, offer is accepted. This gives many woodland owners great comfort in that they can do their homework on the individuals and companies before proceeding.


Auctions


An auction sale is very competitive and usually produces an immediate result. It is ideal in a rising market where there is interest from at least two competing buyers and the seller is confident about the contract terms and his or her ability to supervise the sale process. It is likely to be the best way of getting the highest price in certain market conditions and provides the seller with the comfort of knowing they have not been duped during a negotiated sale. Internet-based timber auctions and tender sales have been established in the UK since 1995 and they are accessible to any woodland owner, along with professional guidance and advice aimed at assisting the owner to decide on the most beneficial route to market. www. timberauctions.co.uk For small quantities of low


grade timber, such as firewood, some sellers are finding eBay to be a good option.


Students on a recent Woodland Heritage Woodland to Workshop course, measuring timber volume. Courses in 2014 will be from 6-8th May and 22nd-24th September. Visit www.woodlandheritage.org.uk for details


12 Smallwoods New Year 2014


Timber categories Timber quality is a vast area about which whole books have been written. It is also a moving feast as traditional uses and end markets die out to be replaced, hopefully, with new applications and products. For the woodland owner the topic is made simpler by just focussing on the timber available from his or her woodland. Every owner wishing to sell some timber should gain a basic understanding of what they are selling and the likely end uses. Softwood timber markets can


Roadside timber stacks in the New Forest


SELLING WOOD ENTERPRISE


In Part Two of his series on selling wood, Mike Bentley looks at wood categories


be categorised simplistically. Small round wood (SRW), which is typically derived from early thinnings and the lower diameter (5-14cm) top sections of main stems in mature trees. It need not be very straight and can contain knots and certain defects. It is used for making pulp and panel products (such as MDF and OSB) and is now increasingly being sought after for woodfuel, either as a firewood log or for manufacture into chips or pellets for woodfuel boiler systems. Other uses include animal bedding and good quality SRW commands a premium price for fencing posts. Pallet, packaging and fencing


wood is often from the middle part of the tree with a diameter greater than 14cm. It is usually sawn to produce small sections for making pallets, crates, boxes, fence rails and large posts. It can contain knots and because it is often sawn into shorter lengths straightness is not always critical. Sawlogs are the highest value


softwood category and therefore the most demanding in terms of quality. As a general rule the longer and straighter and more knot-free a sawlog log is, the higher the value. The sawn sections are typically used for general construction, including timber frame houses. Some species such as Douglas fir can be used in large section for load- bearing beam work, as a substitute for oak, and this can greatly increase the value.


Hardwood markets Hardwood markets also fall into general categories. Woodfuel is sold as logs, chip and pellet. Virtually all poor-quality timber of variable size and species will find a buyer in today’s buoyant woodfuel marketplace. The easier it is worked and processed, the higher the value. For instance, a parcel of relatively straight, lower diameter logs with no large knots or forks will go through a processor or chipper more easily than large twisted knotty logs and therefore be worth more. Then there is fencing quality


hardwood. Oak and sweet chestnut logs cleft easily into


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durable and attractive fencing posts and rails, therefore small diameter logs of these two species can usually find a ready market of higher value than other species. Mining and second grade is


very much a ‘catch all’ category for the purposes of this guide and covers the quality of timber which is too good for woodfuel but not good enough for planking and joinery end uses (see below). It tends to be less species-specific and is more tolerant of knots and discolouration and other defects. The end uses are wide and varied from pit props and bearers to internal framework for high- end kitchens and upholstered furniture. The market for beams and posts, particularly oak, is hungry for UK timber and is suited to larger logs, even with some knots and defects – swept, or curved, logs can command a special premium.


Furniture grade The best quality logs are selected for the planking category and the exact criteria are different for most species. On the whole the longest, straightest most knot- free logs without any defect are of highest value, with extremely good examples even finding their way abroad into the veneer industry. Still manufactured in this country though are finishings (skirtings, frames, architraves


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etc...), flooring, kitchens and furniture; which all use good- quality hardwood timber. For all the above categories in both softwood and hardwood there is usually further variation between different species due to different timber properties and resultant end uses.


Niche Markets I have given niche markets a special mention in this guide because this is perhaps the area where owners of small woodlands can actually take advantage of their relatively low timber volumes and their available time to investigate less common end uses at the local level. ‘Small is beautiful’ is certainly true when it comes to volumes of timber needed by some niche markets. Compare the potential retail


value in say a cubic metre of firewood once it has been split, seasoned and bagged (say £120-£180 for arguments sake) with a cubic metre of timber which has been sawn, seasoned, and planned and turned into kitchen chopping boards: probably around £5,000-£7000. Despite the extra manufacturing costs, the difference is clear and demonstrates the value of sniffing out these lesser-known users of timber and developing a relationship with them. In the first part of this guide


in the last edition of Smallwoods the importance of getting to know your local wood users was highlighted and it is worth reiterating the point here in relation to niche markets. Woodturners and carvers are often keen to buy special pieces of timber, perhaps even those that other people might avoid, and with a little investment in machinery (notable a chainsaw, chainsaw mill and bandsaw) you could be producing blanks to sell through local clubs. One final thing, if you do


uncover a high paying, local market for small amounts of timber which you are able to satisfy, keep it quiet. You have developed this special customer and you will probably want to keep the benefits for yourself!


Timber Valuation Timber prices, felling costs, extraction costs and timber haulage costs change all the time and so therefore does the net return available to the seller. The vast majority of timber sales are conducted privately and this means there is very little public information available. The annual hardwood auction at Westonbirt which contains mostly FC timber is one of the few sources of price information and we are planning to publish a summary of the results in a future issue.


In the meantime members wishing to know the likely value of their timber should simply ask about locally and investigate online. Speak to other owners, timber buyers and local FC staff and get a feel for the prices being paid in your area. The Internet timber auction options also offer current price information. Sale contracts are important


and owners are strongly advised to ensure an adequate one is in place. Different circumstances require different contract provisions due to varying levels of risk and necessary protection. A contract should also meet the needs of both parties. We are currently looking at the practicalities of providing a generic timber sale contract template for Members to customise and cover their own particular circumstances.


Helpline Apologies for mis- naming Geraint Richards in the first part of our marketing series last issue. One of the most valued benefits of SWA membership is our Technical Helpline, ably manned by membership manager, Phil Tidey (philtidey@smallwoods.org.uk). Do use this free resource and make the most of it. If Phil doesn’t know the answer straightaway he will usually know where to find it and I expect he will come to me with tricky questions regarding timber marketing; that’s a genuine offer, not a challenge!


New Year 2014 Smallwoods 13


PHOTO: FC PHOTO LIBRARY


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