(Idaho Department of Lands Press Release, June 22, 2022)
Boise, ID – Idaho Department of Lands (IDL) is about to launch a delivered product sales pilot project and is looking to contract directly with loggers for harvesting and delivering timber products to purchasers.
Timberland owners use two basic timber sale models for selling forest products, with timber sold either as stumpage or as delivered products. Currently, IDL sells endowment timber using the stumpage model, with standing timber sold at public auction and purchasers being responsible for harvesting and removing the trees at their expense.
Under the Delivered Product Sales Pilot Program, IDL will sell at public auction specific product sorts like pulp, posts and poles, sawlogs, cedar poles, or house logs directly to end-users, contracting with loggers to harvest and deliver the product sorts.
“The pilot project will determine if the delivered products model will empower IDL to strategically market sales and specific products to improve net return and capture higher values, thus helping the agency meet its constitutional mandate to maximize long-term returns for the beneficiaries,” said Director Dustin Miller.
“In our research we found that other states and companies that sell timber as delivered products report net revenue increases of 10% to 20% compared to the traditional stumpage sell,” he added.
For loggers to be eligible to bid on harvesting and delivering products under this pilot program, timber harvesting contractors must apply to become eligible bidders. The bidder eligibility application period runs from July 1, 2022, through August 1, 2022. Following the application period, qualified applicants will be invited to submit bids on specific delivered product projects as they occur.
“Associated Logging Contractors of Idaho has long supported the Land Board and IDL on this effort, it is good to see this first step launched,” said ALC’s Executive Director Shawn Keough.
“The ALC encourages contractors to fill out the simple form and get their name on the list in the event a project comes up in their area they’d like to bid on,” she added. “This program may help small contractors with their businesses as it opens a ‘seat at the table’ so to speak.”
Montana and Washington both use stumpage sales and delivered product sales to sell state-owned timber. Industrial landowners and most consultant foresters working with larger private landowners also use the delivered product sale approach because it provides increased revenue and better control of timing and results for their clients.
The Idaho Legislature and Governor approved IDL’s FY2021 budget request for $500,000 to implement a Delivered Product Sales Pilot Program. Subsequently, in March of 2022, IDAPA 20.02.14 was updated to authorize IDL to sell endowment timber as delivered products.