How To Use Forest Data Network Index Prices
What is an index price?
Index prices can tell you on average what a particular species of a particular log species brought recently on the market in your region. Different species and different regions command vastly different prices. And those prices can change dramatically... sometimes in just a few weeks!
Selling Timber
A licensed forester can help with timber volume, measured in thousands of board feet (mbf). By multiplying the species volume against its index price, you can create a spreadsheet that totals the approximate value of each species as well as the estimated total value of the harvest you are planning.
Valuing Timberland
Index prices can help you value timberland that you own or land you may be interested in acquiring. Combining the forest value with an estimated raw land value (and other components such as development) result in a total approximate land value.
Price Trends
The price history for a specific species can be a valuable projection tool. Price trends change based on supply and demand, mill capacity in a particular area, and even fashion (as certain types of wood go in and out of style for products like furniture and flooring).
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Calculating Timber Value
Estimate Volume
A licensed forester can help with timber volume, measured in thousands of board feet (mbf) for sawlogs, and cords (or tons) for pulpwood or lesser quality wood from a harvest. Rely on your forest management plan to select the trees to be harvested, particularly if your land is in the Wisconsin Managed Forest Law program, which limits harvest timing to what is specified on your management plan, typically a window of two or more years.
Measure Timber Volume
Check and update prior measurements of volume of timber on your land. A forester “samples” a prior inventory by checking the timber estimate recorded at specific points in a prior inventory. That prior inventory also will need to be updated for reductions and estimated growth since the inventory date. If no reliable inventory is available, you will want to do a new inventory. Contact a licensed forester and get a quote on what that will cost which will vary based on the specificity of the timber cruise.
Convert Measurements
FDN index prices are in cords, but if your inventory is in tons it can be converted to cords by species. Different species weigh more or less per cord based on density. The Wisconsin DNR offers a tons per cord conversion table for your convenience.
Use Index
You can create a spreadsheet that multiplies the species volume against the FDN index price to get an estimate of value for that species in your harvest.
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