Timber Consulting & Log Buying
When to hang on to them and When to sell them...
High quality walnut trees can be a great investment, but like any good investment or card hand, you need to know "when to hold 'em and when to fold 'em". I often get asked how big a walnut tree should be before it is sold. The answer is not simple and each tree must be assessed to determine it's financial maturity.
Financial Maturity is when the income from selling the tree can be placed in another investment and earn a higher rate of return than the tree is earning growing. Financial maturity differs from biological maturity. Biological Maturity is when the tree dies. Trees that reach biological maturity have already surpassed financial maturity. There is a time period when the tree is deteriorating and actually losing value before it reaches biological maturity and dies.
At what size does a walnut tree reach it's maximum earning potential? This is determined largely by tree quality. The better the tree - the longer you should grow it. The poorer the tree - the sooner you should sell it. Walnut trees that have no defects, such as knots, branches, cracks, or scars, are called Veneer Trees. These sheets of veneer are sliced or peeled from the logs.
Veneer is often cut between 1/64 - 1/38 of an inch thick, so any defects rule out veneer production. Logs are graded by the number of sides that are clear of defects. Most markets require a minimum of 3 clear sides or faces. Four clear faces are preferred and these are the most valuable trees. Your veneer grade log must be a minimum of 8 feet, but the longer the better.
Trees that have defects on two sides or more are called lumber trees. These trees have too many problems to be efficient for veneer production, so they are cut into boards.
As veneer quality trees grow in size, they gain volume in board feet, and each board foot is more valuable as the tree gets larger. In other words, you are gaining volume and each unit takes a price jump as the tree grows larger in diameter.
Walnut lumber trees gain in volume over time, but the lumber does not take price jumps as the tree gets larger in size. If walnut lumber is $0.50 per board foot, it is the same price for a tree regardless of how large the tree is. Growth is 2-3% per year. This is a poor return on your investment, so lumber quality trees should be sold as soon as someone will buy them.
Foresters measure trees at chest height, or 4 1/2 ft. above the ground. If you have a lumber quality tree, the tree is financially mature at 16-17 inches in diameter. A veneer quality tree at 16-17 inches in diameter is like a 150 lb. hog. The frame is there, but you make a good return adding 'meat' by allowing the tree to continue growing.
Following, is an example of how walnut veneer trees gain value as they grow larger. On good sites, walnut will grow 1 inch in diameter every 3 years. Over a 12 year period, the tree will increase in diameter by 4 inches. The figures for a 10 ft. veneer log with 4 clear sides.
|Years Later||Length (in feet)||Diameter (in inches)||Board Feet (in Log)||Price (per foot)||TOTAL|
In 6 years, you will have a 8% Rate of Gain.
This is a 48% increase in money!
In 12 years, you will have a 10.4% Rate of Gain.
This is a 124.8% increase in money!
In 18 years, you will have a 12.6% Rate of Gain.
This is a 226.8% increase in money!
In 24 years, you will have a 15.5% Rate of Gain.
This is a 372% increase in money!
Therefore, the longer you hold onto a tree, the more money that tree is worth.
(** Common growth in size is 2” every 4 years)
This is the recommended tree size as your risk factor is less.
Prices are estimates only and do not reflect values you may receive for your trees. Tree value varies greatly with quality, access, and number of trees for sale. Price can only be determined by getting bids from reputable timber buyers, such as us.
A Top quality tree will grow 1/8 inch growth ring per year. That 1/8 inch is the growth ring that goes around the tree. This means if you calculate this increase, the tree gains 1/4 inch in diameter per year, gaining an inch every 4 years. Recommended size of veneer to be marketed would be 18-26 inches, watching all variables.
If a tree shows signs of deterioration it is time to harvest, as it will be considered a deduction on the veneer price if deterioration is prolonged.
Examples of deterioration that should be considered a risk factor for harvest:
~ The appearance of Frost Cracks. These would be starting from the bottom of the tree where the roots extend. If caught early enough, it does not do too much damage, but if let go it will rise up further on the log each season causing more damage to the veneer quality.
~ Bark Checking. Walnut trees have a long bark line. When the bark becomes looking more checkered or separated, the tree is aging and has reached its maturity. This usually means that its diameter has stopped increasing and should be harvested.
Weather factors, such as storm damaged tops, can be seen if major limbs are broken or ripped. This can induce the tree to sprout sap limbs coming off the main stem of the log. If you see damaged tops on your veneer trees, you should have a tree professional, like us, look at them to assess the damage and future growth.
~Use this only as an estimate, as trees differ from many factors such as: terrain, zone, drainage, timber density, and soil.
~When considering to sell, assess risks of future growth such as: your stand, wind, water, lightning, and value.
It is not recommended by us, or any other reputable foresters to do extensive harvests without proper planning. If you are going to harvest an entire timber for just its value, make sure that there is enough existing quality species of trees to regenerate this forest. A common recommendation on a select harvest is not to rid the timber of all its quality. A better practice us to use proper management practices that will allow the timber to flourish after a harvest. Proper techniques of harvest do timber stands good. It produces new growth and allows canopy space to reach new seedlings.
Please call us if you have any questions or concerns on upcoming harvests.