Timber Pricing by Log Size or Lineal Foot PLF

1. ©2016, Forest2Market, Inc.
TIMBER PRICING
BY LOG SIZE OR POUNDS PER LINEAL FOOT (PLF)

2. ©2016, Forest2Market, Inc.
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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3. ©2016, Forest2Market, Inc.
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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4. ©2016, Forest2Market, Inc.
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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5. ©2016, Forest2Market, Inc.
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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6. ©2016, Forest2Market, Inc.
Scaler directs truck to certain point, where logs are flush with a
“starting point” and then counts the logs and measures average
length.
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THE “STARTING
POINT”

7. ©2016, Forest2Market, Inc.
Counting logs is straightforward at 30 logs per load,
but what about at 75 logs per load?
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Frontal View
THE “STARTING
POINT”

8. ©2016, Forest2Market, Inc.
Best Practice - Scaler “draws” imaginary cross hairs on the front
of the load, then counts vertically and horizontally.
8
Split = ½ log
8 logs across
9 logs down
8 x 9 = 72
THE “STARTING
POINT”

9. ©2016, Forest2Market, Inc.
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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10. ©2016, Forest2Market, Inc.
LOG PRICING
Stumpage price per timber
tract is highly correlated to log
size (i.e., the larger the trees,
the higher the stumpage price.)
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R² = 0.7522
$-
$10
$20
$30
$40
$50
$60
0 20 40 60 80 100 120
StumpagePrice($/ton)
PLF

11. ©2016, Forest2Market, Inc.
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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12. ©2016, Forest2Market, Inc.
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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13. ©2016, Forest2Market, Inc.
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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14. ©2016, Forest2Market, Inc.
LOG PRICING
Weighting price into PLF
classes reduces variability.
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15. ©2016, Forest2Market, Inc.
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.
15
R2 = 0.9677
MSE = 1.81

16. ©2016, Forest2Market, Inc.
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) .
16
R2 = 0.9755
MSE = 1.37

17. ©2016, Forest2Market, Inc.
CONTACT
17
Forest2Market
15720 Brixham Hill Ave
Suite 550
Charlotte, NC 28277