North Carolina’s private landowners own close to 85 percent of the state’s 18.6 million acres of forestland, they play a critical role in ensuring that our forests are healthy, productive and diverse. The decisions landowners make on their land have a long-term impact on wildlife habitat, clean air, clean water, wood supply and outdoor recreational opportunities. So it’s important that they have the information they need to make knowledgeable forest management decisions that assure that North Carolina continues to enjoy the many benefits that forests provide.
Many investment analysts consider reforestation to be one of the best long-term investment opportunities available to landowners. This conclusion is based on the appreciation of timber products over the past 50 years. On the basis of these and current trends, analysts believe that prices paid to landowners nationally for softwood sawtimber and quality hardwood sawtimber will rise at a rate at least equal to inflation and that prices paid for standing timber in the Southeast may rise more rapidly than in other regions because of increased demand and competition.
Financial assistance for reforestation is available at both state and federal levels. State cost-share programs such as the Forest Development Program and the Southern Pine Beetle Prevention Program are available through the North Carolina Forest Service. Landowners may receive up to 40 percent of the cost of site preparation, planting or timber stand improvement through the Forest Development Fund. Funding for this program is provided by the forest products industry in North Carolina.
At the federal level, cost-share funds may be available under the Farm Bill. The Farm Service Agency (FSA) and the Natural Resources Conservation Service (NRCS), encourage landowners who might be interested in various cost-share available in the Farm Bill to plan ahead before signing up for a specific program.
When selling timber, be certain your interests are protected. Like most landowners, you probably sell timber infrequently and should not rely on personal judgment. Professional assistance from a forester is well worth the cost. You should consult with both a forester and an attorney experienced in timber sales.
Timber is generally sold either on a lump-sum basis or under a pay-as-cut agreement. Tax considerations, timber quality and quantity, and other factors should influence your decision on how the timber is sold. In a lump sum sale, the landowner receives a set price (lump sum) for the stand of timber. Under a pay-as-cut agreement, the landowner is paid as the timber is cut and for only that timber that is harvested.
If you make infrequent sales and have good quality timber, it is often in your best interest to sell by advertising the sale to potential buyers, receiving sealed bids and selling on a lump-sum basis. You should then execute a timber sale contract.
While no two contracts are exactly alike, all should include the following basic provisions: Guarantee of title and description of the land and boundaries; Specific description of timber being conveyed, method of designating trees to be cut, estimated volumes, species, products and harvest method(s); Terms of payment; Duration and starting date of the agreement; Clauses to cover damage to non-designated trees, fences, ditches, streams, roads, bridges, fields and buildings; Clauses to cover fire damage where harvesting crew is negligent and to protect the seller from liability that may arise in the course of harvesting; Clauses for compliance with applicable state regulations and defined best management practices; Clauses for arbitration in case of disagreement.
If you have any questions about your family forest, please contact the NCFA at (800) 231-7723 and staff will be able to answer your question or direct you to the proper person within the North Carolina Forest Service.