Branching Out - Fall 1998

Just Say No to High-Grading

Current prices for timber in the Northeast are good. As a result, harvesting activity has increased. However, forest landowners must realize that some harvesting techniques can limit both short-term and long-term options. A well-planned timber harvest increases your immediate and future benefits.

High-grading and related practices should be avoided. High grading is cutting only the highestvalue trees. Smaller, lower value trees are left. Since most of Maryland=s forests are even-aged, the high value trees are those best suited to the growing site. The smaller ones are less suited for the site, malformed, or diseased, and not ideal to remain as the next forest or seed source for future forests. When only the larger, better trees are removed and the smaller, inferior ones remain, the quality of the forest declines rapidly. This seriously limits the economic and silvicultural potential of the forest. A mix of all sizes and quality should be included in a timber sale.

Other high-grading practices

High-grading also is called diameter-limit cutting. This removes all trees above a certain minimum diameter, typically 12-14 inches, with the premise that it will leave the smaller trees to grow. Because the smaller trees may be just as old as the larger ones, they will not have good growth, even when surrounding trees are removed. In addition, the trees removed may be growing well and could continue to add value at a good rate for additional years.

Selective cutting removes the highest quality trees. It is another form of high-grading and is not part of good forest management. Selective cutting should not be confused with selection or group selection cutting which are tools in good forest management. Selection or group selection cutting includes removing trees from a range of diameters to develop a sustainable uneven-aged forest.

Why does high-grading happen?

The immediate financial gain of high-grading or diameter limit cutting is tempting. Big dollars are offered for Ajust the larger trees. The gain is brief, however. High-grading can sacrifice your management objectives for decades. Your forest may not recover enough in your lifetime to produce quality timber. An analogy would be a farmer getting rid of the blue ribbon bull and using the losers for breeding stock.

High-grading can occur because it benefits the logger. The logger gets high-quality timber at the same cost to log and haul lower-quality timber, creating a potential higher margin of profit. High-grading sometimes occurs when there is an inheritance tax or medical bill to pay. Cutting a few of the valuable trees can pay the bill but it leaves lower quality trees and a less productive forest for the future.

What are the consequences?

Is high-grading really that bad? Yes! It can limit seriously the future productivity of your forest. When the remaining trees can=t grow as well as the trees that were removed, the overall quality of the forest has been degraded. Mast-producing trees and other trees with wildlife value are lost. The time until the next harvest is increased. In addition, the next harvest may be of the remaining lower quality, less valuable trees.

How can you avoid high-grading?

For the health of your forest and for your future earnings, trees of all ages, sizes, and quality should be included in a harvest. Have a management plan and work with a consulting forester to achieve current economic and forest health goals and to assure that your forest has a healthy silvicultural and economic future.

[Portions exerpted from The Forestry Advantage, in the National Woodlands, October 1998, by Peter J. Smallidge and Michael C. Creason.]

How Can You Conduct a Good Timber Harvest?

Most hardwood forest owners in Maryland will sell timber only a few times during their lifetime. Softwood forest owners may sell more often. A timber harvest can be a significant financial transaction and can have major implications for the present and future of your forest.

If you are approached by a timber buyer, you may be pleasantly surprised by the value you are offered and move quickly toward a timber harvest. However, a harvest is a complex undertaking and demands careful planning. How will it affect the future of the forest, the soil, and water? What types of trees are likely to replace those removed? What will the forest look like to wildlife and the neighbors? What is a good logging job? How will the income affect your taxes?

Develop a management plan before conducting any activity in your forest. Outline your objectives and the steps needed to accomplish them. Cooperative extension publications, the Department of Natural Resources (DNR) forester, consulting and industrial foresters, and computer software are available to help develop a plan. A plan prepared by a professional forester also can qualify for the Forest Stewardship or Tree Farm programs, reductions in real estate taxes, and cost-sharing on the management practices. Once you have developed a plan, you are in position to conduct a harvest.

Hire a consulting forester. Some forest owners are reluctant to hire a professional forester because a fee is involved. The fee often is recouped many fold in increased income, restored site conditions, and the improved future health of the forest. A consulting forester can help you through all the steps of a timber harvest.

Know types of harvest and say "no" to high-grading. Group selection, selection, shelterwood, seedtree, and clear cutting are sound harvesting methods.

Check your mortgage or any other encumberance on the property to assure clear title to the land, the trees, and the income and that you are not restricted in what you do.

Clearly mark property lines and harvest boundaries. This may be the time to have a complete survey of your property. Clearly mark areas to timber and those that are off limits. Communicate this to the logger.

Choose a logger who will harvest according to your objectives. You can select a logger who comes to your door and then take your chances. Or, you can hire a forester to prepare an invitation to bid, receive the bids, help select a logger, and monitor the harvest. Consider the logger=s performance, proper equipment/size of operation for the job, services such as road building and seeding, subcontractors, adherence to Best Management Practices (BMPs), willingness to accommodate special concerns, and participation in logger training. Maryland=s Master Logger Program certifies loggers who have completed comprehensive courses. Master Loggers understand the principles of forest stewardship and can be a partner in accomplishing your objectives.

Sign a written contract guaranteeing the rights of all parties. All timber sales, regardless of size, should be accompanied by a written contract. This is no time for a handshake agreement.

Observe regulations for sediment control. As the writer of a letter in the last Branching Out knows, harvesting timber is not a simple process. State and county regulations govern timber harvests. Ultimately, the landowner is responsible to see that harvesting complies with regulations.

Know timber prices. Timber is a durable good and can be held until the market is advantageous. Get market information from a forester or from Pennsylvania's quarterly timber market report website (see Take Note).

Consider tax implications. Do you want a lump sum or pay-as-cut sale? Should you spread the income over more than one year? Will the income require payment of estimated taxes? The book value or basis of your timber must be established and used to determine gain or loss on timber sales. This can be established even some years after you acquire the forest. Consult a qualified tax advisor before the harvest begins.

Protect and enhance wildlife habitat by leaving cavity trees and dead tops for dens and perches and saving shrubs that have nuts or berries for food. After the harvest, seed the landings and skid roads to attract wildlife.

A timber harvest is more than cutting trees. With proper planning, a harvest can enhance your forest, wildlife, neighborhood, environment, and current and future income. See the ATake Note@ section for resources to help plan a timber harvest that will be good for you and your forest.

• Develop a management plan
• Hire a consulting forester
• Check mortgage restrictions
• Mark property & harvest boundaries
• Protect wildlife habitat
• Consider tax implications
• Evaluate the timber market
• Solicit bids
• Choose a logger
• Sign a written contract
• Observe regulations
• Restore disturbed areas
• Enjoy your well-managed forest

Hunting Lease Insurance

As a service to hunt club and forest landowners, the Maryland Forests Association (MFA) has endorsed affordable hunting lease liability insurance. Administrated by the Davis-Garvin Agency, Inc., South Carolina, this program insures both the landowner and the hunt club to whom the land is leased.

To qualify for the insurance, both the hunt club and the forest landowner must be members of MFA. The insurance offers broad coverage but is strictly hunting lease liability insurance and does not take the place of liability insurance coverage unrelated to leased hunting activities. For information on the MFA Hunting Lease Liability Insurance program, contact Davis-Garvin agent Ed Wilson at 800-845-3163 (toll-free).

MFA has represented Maryland's forest community since 1976 and has members from all segments of the forest community. For information on MFA membership, contact the MFA office at 301/895-5369 or visit their website at http://mdforests.org.

RESOURCES for Forest Landowners

Now available! All seven fact sheets on riparian forest buffers: introduction (FS724); design, establishment,and maintenance (FS725); trees for buffers (FS726); understory plants for buffers (FS727); grasses for buffers (FS728); and soil bioengineering or streambank restoration (FS729). Free from your county Cooperative Extension office.

From your county Cooperative Extension office (free unless noted):

Developing a Forest Management Plan, FS625.

Private Consulting and Industrial Foresters, 1998 listing of licensed and certified foresters in Maryland.

How to Determine Your Property Boundaries, FS619.

Measuring Your Forests FS 629.

A Guide to Logging Aesthetics: Practical for Loggers, Foresters, & Landowners NR60; $6.

Marketing Forest Products: The Sales Contract FS628.

Maryland's Master Logger Program.

From other sources:

Forest Stewardship Planning Guide. Computer software; free from USDA Forest Service, 802-951-6368.

Timber Market Report, Pennsylvania. www.cas.psu.edu/docs/CASDEPT/FOREST/TMR/TMR.htm

How to Choose a Quality Logger and Tips to Consider When Selling Your Timber, $1 each from American Pulpwood Association, Inc.; 301-838-9385.

Maryland Logging Companies and Maryland Sawmill Companies: lists free from DNR-Forest Service or the Internet at www.dnr.state.md.us.

Forest Owners' Guide to the Federal Income Tax, Ag Handbook 708; $10 from Purdue University Ag Communications Center, 765-494-6784; www.fnr.purdue.edu.

Timber Tax Management for Tree Farmers. Updated annually. $24.95 from American Forest Foundation, 202-463-2455; www.treefarmsystem.org.

Branching Out - Vol. 6, No. 4, Fall 1998

Editors: Jonathan Kays, Vera Mae Schultz, and Pam Townsend
Contributors: Karin Miller, Becky Wilson

Supported by the Maryland Tree Farm System