This stumpage report is provided on a semi-annual basis and should be used in association with the Indiana Forest Products Price Report and Trend Analysis written by Dr. William Hoover in cooperation with Indiana�s forest products companies. Dr. Hoover�s report is published in the upcoming fall issue of the Woodland Steward Newsletter. Stumpage price was obtained via a survey to all known professional consulting foresters operating in Indiana.

A consulting forester is a self-employed professional forester who offers management services to private landowners for a fee. Reported prices are for sealed bid timber sales only (not negotiated sales) between a motivated timber seller and a licensed Indiana timber buyer.

The data represents approximately 10 to 15 percent of the total volume of stumpage purchased during the periods from February 16, 2007 through June 15, 2008. This period is slightly different than those reported in previous surveys. Future surveys will be conducted from the June 16 through June 15, in order to provide as up to date information as possible. The results of this stumpage price survey are not meant as a guarantee that amounts offered for your timber will reflect the range in prices reported in this survey. The results simply provide an additional source of information  to gauge market conditions. The sealed bid timber sale process is for trees marked by a professional forester. The species, number of trees and volume in a sealed bid sale are determined prior to the notice of sale. A notice is sent to licensed timber buyers who then inspect the timber and offer a price for said trees at a predetermined time and place. Under conditions determined in the bid notice, the owner then accepts or rejects the bids.

Upon acceptance of the bids by the owner and fee paid, the owner then conveys the right to cut the advertised trees to the purchaser. This is frequently referred to as a lump sum timber sale. More detailed information on this process is available in Purdue FNR publication 111 � �Marketing Timber� or FNR � 138 �How to get the Most from Your Timber Sale.� These publication and others are available on line at: www.fnr.purdue.edu/ extension/publications.shtml in the �Economics, Marketing and Taxation� section.

This report reflects �spot market� prices, not the average price paid by timber buyers. The bidding process used by consultants �spots� the maximum amount any buyer is willing to pay for a particular lot of timber at a particular time and place, not the average price paid for timber. High bids frequently reflect an urgent need for timber because of special orders for lumber or veneer, low log inventories at the buyer�s mill, poor logging conditions due to wet weather, or other special conditions.

Hardwood lumber is sold in a highly competitive commodity market. Competition comes from mills within the state, region, and hardwood lumber producers in the Lake States, Northeast, South and Southeastern production areas. This market competition means that the cost of stumpage in other producing regions determines in part the amount Indiana mill and loggers can pay for stumpage. If all timber were sold on a bid basis the spot market would no longer exist and the average of the highest bid price offered would be lower than now observed. This explanation isn�t meant to deter you from seeking the best available price. It�s meant to explain the apparent discrepancy between the two price reporting systems.

SEALED BID PRICES: The prices reported are broken into three sale types; high quality, average quality, and low quality. A high quality sale is one where more than 50 percent of the volume is number 2 grade or better red oak, white oak, sugar maple, black cherry, or black walnut. The low quality sale has more than 70 percent of the volume in number 3 grade or is cottonwood, beech, elm, sycamore, hackberry, pin oak, aspen, black gum, black locust, honey locust, catalpa, or sweet gum. The average sale is a sale that is not a low quality sale or a high quality sale as defined above.

SPECIES ADJUSTMENTS: We have made some minor adjustments in the categories from previous surveys. White ash was previously included as a component of the high quality timber sales, however the average stumpage price appeared to be showing a decline from past surveys. The decline may be due in part to a decline in the red oak markets. However, it is likely affected more by a drop in the white ash market due to the threat from emerald ash borer. The threat has increased the supply of ash on the market as some forestland owners and foresters have decided to manage away from ash species.

Hickory has also been removed from the species list for low quality sales due to increased demand and increased prices. A total of 339 sales were reported for the sixteen month period ending on June 15th. Figure 1 shows the number of sealed bids offered by sale type. A total of 1834 bids were received for the 339 sales. This reflects what foresters have been suggesting, higher quality timber offered for sale increases buyer interest and the number of bids offered. This number has been fairly consistent since this survey began in 1999-2000. The average number of bids offered per sale was 5.4 for this period (up from previous surveys, with 6.6 bids / high quality sale, 4.9 bids / average quality sale, and 3.5 bids / low quality sale). The survey also indicated the most interest in very high quality sales (defined as sales with 5 percent or more of the estimated volume with potential white oak or black walnut veneer). These sales received an average of 8.9 bids, although the sample size was limited to 23 sales. The average number of bids for a high quality sale after adjusting for these exceptional sales was 6.2 bids A total Doyle stumpage volume of 25,080,347 board feet was sold during this period. The average volume per sale was 72,378 board feet for high quality, 78,048 board feet for average quality, and 65,318 board feet for low quality. Total timber value sold was $ 11,231,615. Total value by type was $6,069,835, $ 4,534,810, and $626,970, respectively. The weighted average of the stumpage price by sale type (obtained from this survey in 2000, 2002, 2004, 2006, and 2008) is reported in Figure 2.

The weighted average of the stumpage price is the total value ($) for each sales group (high, average, low) divided by the total volume by sales group. The median stumpage price by sale type per year is reported in Figure 3. The median price is the amount where half of the sales are higher and half are lower. The price reported is per 1000 board feet (MBF) of standing timber. To obtain a price per board foot, divide the price by 1000. An average price of $448 per thousand (MBF) is the same as 44.8 cents per board foot stumpage. The average stumpage price for high quality sale was $591/MBF, $382/MBF for average quality, and $213/MBF for low quality. Price ranges by sale type are reported in Figures 4�6.

All three sale types are summarized in Table 1. When adjusting for the price of the exceptional sales (sales with 5% + reported veneer) the average stumpage price for a high quality sale was $513/MBF with a median stumpage price of $529/MBF. The variance also was reduced significantly to $31/MBF. Unfortunately this data as not collected in previous surveys so it is not possible to compare these numbers with previous data. I anticipate we will collect this data in the future.