Timber Companies

Will they ever learn to respect the consistent calculated revenue they have from club leases. Rant over

I doubt it

I been watching them for many years, been a part of leases. The answer is no. But likewise, I've seen individual landowners screw hunters over too, though usually not to the same degree.

A low supply of land results in an increase in demand. There's always someone else who will gladly sign the lease. Basic economics. Sad but true.

here is the problem. My son had land leased for a set amount and the lease was for 3 years. After three years which was this year other folks were allowed to bid and he was allowed to match the bid amount. He was paying $8000.00. Someone bid $15000. He cannot pay this so he told them he couldn't pay that he would remove the stands he had up. They told him he was not allowed to go on the property and the stands were theirs. Timber companies do this.

I don't care what they said I would be going and getting my stuff.

X infinity. No chance in hell I don't go get my stuff

This is the first I've ever heard of such BS, What company did this?
I'm with BmV, wouldn't matter what they said, they would not bully me outa what's mine. it may be their property, but I'd go get my property off of it.

Unless that clause was specified in the lease agreement, they cannot stop you from retrieving your property. And if that clause was in the agreement it was stupid to sign it.

It may not be bullying. If they had the right to tell him not to go on the property, I'm guessing his lease had expired. Many leases expressly state that anything left on property after termination is deemed abandoned by the tenant and ownership goes to landlord. Therefore it may no longer be your property, and you would be trespassing and stealing to "go get my property." You wouldn't break back into an apartment after your lease ended to get a couch you left.

I'd take that chance.

i thought leases ran aug to aug ????

if he could put up a stand last april why can't he take one down now ?

I think people have too high of expectations when it comes to timber leases honestly. Large timber companies could shut down their lease programs, be fine financially, and probably deal with a lot less drama and headaches for doing so. Hunting leases to a timber company are the equivalent of cotton gin trash to a cotton company. The timber companies view leases more like a public conservation program or charity than a big profit maker. They charge for leases to cover the overhead of having a lease program. So when you call up a billion dollar company griping about not having enough food plots or the timing of when they sprayed or cut timber, you can guess how much they care. They especially won't cater to someone with a hundred questions and concerns about a $1,500 lease. Hunting leases are far outside their core mission as a company. So if you hate leasing, buy your own land or hunt public, but there is no sense in griping about the big companies.

One day I guarantee you they will all either quit leasing or simply lease all recreation rights to the states in exchange for tax incentives.

I agree with you to an extent. I think your wrong on the money. Yes, in the big scheme, its not much. But to that CEO sit in a big office in NY City that has never even seen a pine tree, its revenue. And he is ALL about revenue. So, they hire people like Rebelman to lease the land, catch all the BS, and the CEO only knows about the $$$....nor does he care about anything else. The corporate world and its not just limited to the timber industry.

The situation described doesn't strike me as a usual way of doing business for most. The people with boots on the ground (Rebelman) usually have a better understanding of the recreationl side and right vs. wrong than what was described. But if the insurance policy had expired......

I completely understand all that, but we are not talking about a couch that was just left behind. from the way I read it, he had no intent to give up his lease, He had paid his dues of $8000 and the company decided to let others bid on the lease, they got a high bid and then offered him the chance to match the bid or give up the lease. He didn't want to pay the $15k for the hunting so he told them he couldn't afford it and would be getting his things.

Well the lease will run from said date to said date, and that can differ for everyone. I know most anything I've seen it will express somewhere within the contract that they reserve the right to modify or end terms based on criteria they deem worthy within that contract.

true lease has expired and according to att. friend if you have no lease u are trespassing.

I would get my stands or they would regret it..

And I wouldn't be talking about it on the world wide web. In fact, I would deny so much I'd start to believe my own lie.

A match on a windy summer day would be a hell of a pay back if i didnt get my shucks back.

Alclearcut obviously per your screen name you have a good view from the Timber co. Side I can't see the lose of lease revenue not hurting thier bottom line it's constant revenue with what i would think very little cost involved. It takes a while to replace a tree

I don't know what value any specific timber company puts on leases, my only point was I'm sure there was a written contract that stated both side's obligations. I think it's a little extreme to say you would burn someone's property because they exercised their rights according to the terms you agreed to on the front end.

I find it hard to believe that they wouldn't let them remove their stuff. I have always worked with people. Except those that call up after hunting season has started and say they left something. It is not the current lessee's issue and should not be inconvenienced.

If a company's land is growing 2 cords of wood per year, that's a stumpage value of about $20 per acre per year. It's not uncommon to get $10 per acre per year for the hunting rights of the same land, so the hunting lease is not an insignificant amount of money. Can't blame them for getting all they can, but it sure looks like they could let the man get his stands.

There isn't any commercial 'timber companies' relying on $20/acre from their timber assets. At least not in the southwest from commercial pine forest. They would all be bankrupt tomorrow if this were the case.

MacMillan Blodel set up their type A leases for 1.5 cords per acre per year for better land, and just 1 on some of the poorer sites. There was an overcut sometimes, but I never saw a dime of overcut on the first 2 thinnings before buying out the contract. Their initial 1.5 estimate was not all that far off, so I thought I was being generous by saying 2.

But you are right that $20 an acre is too low. It's late and I'm tired and I was thinking ton prices; sorry about that and thanks for correcting. But I think my point is still valid; the hunting leases are a significant source of income and they need to make all they can.

I bet the net on hunting leases isn't as lucrative as we think it is. I don't know what the total overhead is, but I would imagine they have to lease 10-15 thousand acres to pay the salary, benefits, truck, gas, payroll taxes, etc. for each person they employ to handle leases.

For easy math, let's say they get $10/acre/year for hunting lease. Over 15 years, the gross $150/ac. Over that same 15 years, say they grow 1,000 tons/acre - at $10/ton - that's $10,000. I know I'm using rounded numbers, that they don't normally clear cut at 15 yrs, and there are present value factors. But, just trying to compare generally, it seems like a $1-$2 move in stumpage has a greater impact on net revenues than hunting leases.

Ok, I wasn't thinking well last night and put the timber growth in cords and used ton prices. So my $20 figure was way too low and should have been a little under $50. I was too low but you are way too high.

A tract I planted in 1993 cut enough on the first thinning to recover the planting cost. I figured a while back that I would get around $33 per acre per year if I clear-cut it now at current prices. Timber prices are down and going further down.

Many timber companies have recognized the trend and sold off all their land. As they make less on timber, they are gonna want more from hunting.

The recreational value of forest land has really ran up the price over the past 30 years or so. If you are gonna buy land for no other purpose than to make money growing timber, then I don't think much land in AL is worth over $500 an acre. It sells a lot higher because of the recreational and speculation possibilities.

Did you mis-figure that $33 per acre part?

The present value of a $10/ac hunting lease (annuity) for 20 years is $105/ac

The present value of a 20 year old plantation worth $2,000/ac is $702/ac.



Not going to get into costs. Some are shared some are not.

PCP is right. The pure economic value of land for timber is dang low. $500/acre isn't far off. If Reb says $700/acre I'd accept that too, but it's not $1,500/acre or more just due to timber. It's all about deer and turkey.

Me either, I meant 100/tons/acre = $1,000/acre

No, that was based on the prices I was offered for it when I had a crew on the place in 2015. I decided to let it grow some more; probably a mistake from an economic view. I don't think it would produce that $33 figure now that prices are even lower. For reference, land planted in 1979 cut out at right at $1000 per acre. Parts of it had been thinned 3 times, and some just twice, so it's really hard to put a price on what that land actually returned, but it was nowhere close to $2000, and that was a 36 year rotation.

The superior trees that they are planting now will make more money than this tract, but you better have a whole lot of poles if you are gonna cut $2000 per acre at today's prices.

The contract I had with MB was at one cord per acre per year and was tied to a commodity index, and I was getting about $24 a year from the lease. I would have been better off financially to have stayed in the lease. On the other hand, I am pretty sure I could get $10 for the hunting rights. Only point I was trying to make is the hunting rights have become a very significant part of the income on timber land.

I agree with PCP. Think about it like this... You should be making enough off the leases to cover some hard costs. After you achieve that threshold now you aren't taking your cash flow from what is currently producing to pay for something that is not producing (what is idle)... So you've got a breakdown over here that says what I'm growing cost me "X" amount to just hold this period. It is part of that piece.

I would not pay someone to lease 10k acres full time. That's a joke. You're going to have to multiply to get to my number. A little money is made off the leases but it is more about budgeting and controlling the hard costs like taxes than anything.

So big dog up in his NYC office - Don't assume he doesn't know what he's doing. He can't start a chainsaw but if he's any kind of timber man offsetting his hard costs are at least a small element of what he is looking at when the reports come across his desk. When you talk about holding something that long covering becomes fairly significant on the whole. Several hundreds of thousands of acres... yea it is a factor.

Taxes, as in property taxes, would be a small number. Wouldn't cost but about $1.25 or there about per acre. Maybe less if some deals have been cut. $1.25+/- is set by the state and should be the same for areas. For some reason I want to say its based on soil type but that doesn't seem right.

Ok so you are looking at the reports your accountant prepared and you are trying to figure out your carrying costs vs production costs. Dirt vs Trees. If you lease for $7.50 then you take out $1.25 for property taxes you have $6.25 left before you start losing money and out of that you pay for insurance as well as someone to handle the leases. Then the deal breaker is how it is financed. It may not have a mortgage a big company may have financed via some type of debt offering or credit facility, etc. They hopefully own a lot of land outright with no interest and your accountant takes all that and put is on paper to show you how much money you lost just carrying the land. Any loss that is cash flow has to be made up on the production side or you are going out of business.

If your numbers are correct, lease revenue provides an additional 15% incremental profit on the same asset as well as residual annual cashflow while the timber is growing and generating $0 in cashflow. As a CFO, I can tell you that based on those numbers, leasing is important to timber companies.

If they understand what you just said I think you pretty much just hit the nail on the head.

Hunting leases are nothing. They don't even cover land taxes. The only reason timber companies lease hunting rights is to supplement their losses. They are in the timber business, your hunting experience means nothing in their schedule and planning.

You're so far off on that! I would guess at the bottom end in Alabama, lease revenue averages at least 3X MORE than their property tax.

We all know when you're leasing, you are at the owners mercy. Owners need to realize when they accept that check they then have responsability to a customer. And if you own the land you hunt and answer to only the man upstairs, thank him everyday.

Ya'll folks realize that not every acre is lease-able and that the weighted average is no where close to $10/ac don't you?

The statement that lease revenue doesn't cover property taxes is patently false. Alabama Property taxes on timberland are next to nothing thanks to the historical political pull of the wealthy landowners and timber companies. Heres a quick example. You own 2000 acres of timber land valued by the assessor at $1250/acre. The total fair market value is $2,500,000. Thanks to lobbying clout, because it is timberland, it is only assessed at 10% of that value which is $250,000. The statewide millage rate probably averages around .043 so the prop tax on that 2000 acres is only $10,750 plus $200 for the $0.10/acre timberland charge in AL so total taxes on 2000 acres is only $10,950. I'll pay that for a 2000 acre lease all day long and twice on Sunday. Just show me where to sign up.

Reb, the weighted avg is also a factor of where your land is located and you guys dont have very much acreage in the prime high $$ areas. The companies like Westervelt, individuals and others that have significant acreage in those prime blackbelt and central AL areas probably average out significantly higher than $10/acre.

Negative. Under current use the number is around $1.25 (+/-) per acre. That is statewide. I'm not sure of the exact number but $1.25/acre is close. Now there are different classifications under current use but they all fall around the same $1.25. So, that 2000 acres will be about $2500 regardless of appraised value. Before I knew better I protested a property value. They cut the value in half but my taxes stayed the same because I had it in current. I now know better after wasting an hour for nothing.

I pay $2.50 per acre property tax for my land in Perry County, and that is under current use as timber land. AL Power Co does indeed get a sweetheart deal and pays nowhere near that much.

The gap has widened then. Sure that is just state and not some add ons??? Around $1.25/acre is what I pay. They all use to fall close. For timber land there is only 4 classes. I can't find a schedule though. Maybe Blackbelt soil?

I know there are different soil rates, but my soil is far from the best. I think you will find there is a big difference in how many Mills of property tax each county charges. Coosa co where I live is one of the lowest at just 12 Mills. We haven't passed an increase since I've lived here.

Perry county did pass an increase a few years back. They've also got it up through reassessment. It went up every year there for a while. And you can be sure it never goes down in bad times. Your $1.25 figure was right for me in the 90s. It's probably still right in some counties. My guess is it's not as uniform as you were thinking; all depends on how those county votes have gone through the years.

Edit: you made me wonder so I looked it up. The state has a chart, but it's a PDF and I am on my phone and don't know how to post it. I was wrong on the 12 Mills for Coosa, that is just for schools. There is another 14 for other government. Perry is nearly double that and some counties are much more.

I have been round and round with them at the tax office. I've protested more than I care to remember leaving looking like a fool the first few times because I didn't know how the game was played.

OK. Can't remember -&$#$ so I had to get out the assessment records. Pulled one at random and it is 52.13 acres. Total tax bill of $65.92. The tax breakdown is something I need to follow up on. But this is where ours is going to be. The state current use is set and the others vary. THE HIGHEST FUND ON THIS ONE IS "STATE OLD SOLDIER" FUND! WTH???? It gets $15.45. Next is " county general" at $13.39. And then "state general" at $5.15. And so on. I think I remember the previous owner paying close to $200/year not knowing any difference. I see that a LOT, especially with out of state owners.

For a home and land....homestead exemption.

OK, looked up "old soldier fund" and it was for widows of Confederate soldier so it is being put to good use.

Then you have to watch for them sneaking in a vote to roll the funds over into a general fund or something else. And who's watching anyway? Not many.

Hunters can be a pain in the a::: . A penny holding up a dollar!

I think there may be 1-2 widows still alive...seriously.

After that University land bid discussion, this thread makes me laugh a little.