High costs of timber sales discourage many bidders

The Feb. 2 guest commentary by George Winters on unsold timber sales was extremely misleading. There are myriad reasons timber sales go unsold, mostly due to economics. While timber supply for local mills is in short supply sales will generally not be bid if the minimum bid, set by the state or U.S. Forest Service, is too high. If they want to stay in business no company can continually pay more for raw materials than they are worth.

Generally the reason state timber sales do not sell is that they are appraised when lumber prices are high, but by the time they go to auction lumber markets are down. At that point the bidders have to determine if they are willing to gamble on markets improving. Sometimes they do go ahead and bid, and are correct, and other times they lose. You can’t lose too often or you are out of business and a lot of good employees are out of jobs. The state is supposed to reappraise, and reoffer, unsold sales at a later date.

U.S. Forest Service sales are another matter. Sales volumes offered on the Mount Baker-Snoqualmie National Forest have gone from over 250 million board feet per year in the pre-spotted owl era to something in the neighborhood of 10 million board feet. Much of that volume goes unsold due to extreme costs, such as helicopter logging, or expensive road construction, for small volumes of timber.

That reduction in volume is enough to supply a couple of good sized mills and a lot of employees. As for the issue of making money on road construction. In some cases the government appraisal for the cost of the road exceeds the actual cost while in many, if not most, actual construction costs exceed the appraised value. When appraised costs are higher than actual the difference is usually added into the bid for the sale. When costs exceed appraisal that amount is deducted from the final bid.

You can be assured sales do not go unbid due to a lack of need by local sawmills.

Ron Smith


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