timber pricing by log size or lineal foot plf

©2016, Forest2Market, Inc.

TIMBER PRICINGBY LOG SIZE OR POUNDS PER LINEAL FOOT (PLF)


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POUNDS PER LINEAL FOOT (PLF)

All logs are different and all loads are different. A standard measurement is required to ensure accuracy.

Pounds per lineal foot (PLF) is a measure of log size, much like DBH or SED.

PLF is a widely accepted industry standard for ensuring valid comparisons across all logs and all loads.


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FUNDAMENTALS OF PLF

PLF = (total weight of load) / (total lineal feet of load)• Weight is measured at the scale.

• The total lineal feet is determined by the scaler:Number of logs x Average length of load

If load weights are uniform, then the total number of lineal feet for a load of logs (the divisor) is the main driver of PLF value. Total lineal feet is a function of stem count:

• Smaller logs = More stems per load = Lower PLF value

• Larger logs = Fewer stems per load = Higher PLF value


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EXAMPLES OF PLF CALCULATION

According to Forest2Market data, the average load of logs in the South weighs 27.78 tons (with a standard deviation of 3.08 tons).

_ 27.78 tons x 2,000 lbs. = 55,560 lbs.

_ 55,560 lbs. ÷ 2,500 lineal feet (total for a load of small logs) = 22 PLF

_ 55,560 lbs. ÷ 1,500 lineal feet (total for a load of larger logs) = 37 PLF


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PLF MEASUREMENT AT MILL SCALE

At the scale, mills take three measurements:• Weight

• Average length of logs (by load)

• Number of logs (by load)


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Scaler directs truck to certain point, where logs are flush with a “starting point” and then counts the logs and measures average length.

THE “STARTING POINT”


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Counting logs is straightforward at 30 logs per load, but what about at 75 logs per load?

Frontal View



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Best Practice - Scaler “draws” imaginary cross hairs on the front of the load, then counts vertically and horizontally.

Split = ½ log

8 logs across

9 logs down

8 x 9 = 72



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HOW ACCURATE ARE SCALERS?

• Very Best: 1 log, 1 foot

• Average: 2 logs, 2 feet

• Data suggest a normal distribution, so bias is minimal.

• Audit procedures vary. The best mills audit about 30 loads per month per scaler and give prompt feedback.


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LOG PRICING

Stumpage price per timber tract is highly correlated to log size (i.e., the larger the trees, the higher the stumpage price.)

R² = 0.7522$-

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LOG PRICING

Delivered price per load is correlated to log size. Variability is greater. Why?

•Individual loads from the same

tract have variable PLF values,

even though pricing is constant

(Slide 1 2).

•Among multiple tracts, variable

costs and varying levels of

demand affect prices even though

PLFs are constant (Slide 13).


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LOG PRICING: SINGLE TRACT

Variable PLF - Constant Price

A tract of timber will typically receive one price for CNS and one price for sawtimber.Because multiple loads are distributed throughout the tract, however, they will have variable PLFs.

In this case, PLF will vary while delivered price remains constant.


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LOG PRICING: MULTIPLE TRACTS

Constant PLF - Variable Price

All tracts of timber in the market are not priced equally. Transportation and harvesting costs, as well as demand factors, will cause variability in pricing among tracts, even though they have common PLF values.


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LOG PRICING

Weighting price into PLF classes reduces variability.


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SUPPLY AGREEMENT PRICING

With a reliable price curve and accurate scaling measurements for CNS and sawtimber, a supply agreement can be based either on the price curve equation or agreed upon PLF values.

R2 = 0.9677MSE = 1.81


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SUPPLY AGREEMENT PRICING

Benefits of PLF include: • Ease of calculation - it can

be done at the scale.

• Suitability for supply agreements - it is defensible.

F2M reports in PLF, but has correlations between PLF, DBH, and other log size measurements based on spread data (spreading a load of logs in the yard and measuring each one separately) .

R2 = 0.9755MSE = 1.37


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CONTACT

Forest2Market15720 Brixham Hill AveSuite 550Charlotte, NC 28277

timber pricing by log size or lineal foot plf

Engineering