Impacts of Land and Ownership Characteristics on the Stumpage Prices for Virginia's Nonindustrial Forests

The character of Virginia's nonindustrial private forests is changing primarily for two reasons. First, many large, continuous forested tracts are being sub-divided, into with the resulting smaller tracts purchased for amenity values and recreation instead of as a timber investment (Hodge 1993). Second, the demographics of non-industrial private forest (NIPF) landowners are shifting away from an agricultural, rural focus to an urban oriented lifestyle and absentee ownership. These changes may mean less timber available for purchase by the forest industry. Timber that is sold will be on smaller parcels that is bound to have an impact on the procurement activities of forest industries. However, little research has been performed on the impacts of site and landowner characteristic on stumpage prices.

The objective of this research project is to identify how the stumpage price of timber is altered by the characteristics associated with the changing forest: decreasing tract size, decreasing harvested volumes, landowner residence, and landowner harvesting preferences. In addition to the price of timber, the competitiveness of timber sales is analyzed to determine what impact the fragmented forest could have on the competitiveness of timber markets.

To perform the study, site and landowner information was collected for 138 recent NIPF timber sales that occurred within central Virginia. This region is identified as a critical area for the study of forestry activities because of the growing urban and suburban residential populations and the large amount of forest industry activities taking place there.

Results show that access to the site is the most important characteristic determining the selling price of timber. Sites that are easy for logging crews and vehicles to approach dramatically increase the price paid per ton. Tract size is less important in determining bid prices for timber either once the total volume harvested passes a minimum of 500 tons, or there is mature hardwood sawtimber on the site and the acreage is greater than 50 acres. Landowners preference for select cut harvests results in a lower price per ton being paid by the purchaser due to the increased logging costs associated with this type of harvesting.