MINNESOTA DNR TIMBER
PURCHASER’S SURVEY
RESULTS
DNR - Forestry
4/16/2010
The DNR conducted a survey of over 500 past purchasers of
state timber in the fall of 2009 to better understand current
needs, identify emerging issues, improve our sale rates and help
shape the future direction of our timber sales program. We
received responses from over 160 purchasers (33%),
representing a very diverse group. The results show differences
in preferences between purchasers of different buying areas,
volume produced and other factors. Understanding these
differences will enable us to improve our processes and policies
without negatively affecting other purchasers.
We want to extend a sincere thank you to all of you who helped
in this effort.
Key Findings
Respondents prefer scaled sales only slightly more than
pay as cut Sold On Appraised Volume (SOAV) sales, with
22% having no preference
68% of respondents indicated a 15% down payment was
no barrier to purchasing DNR auction permits
82% of respondents preferred a sale size less than or
equal to 1,000 cords*
49% reported 3rd-party certification as being somewhat
to very important
*Result was not weighted by firm size
Key Findings (continued)
38% of respondents say they would increase their bid for
permit lengths of longer than 3 years
73% of firms indicated that administrative rules and
procedures such as forms of security, or splitting the
annual timber offerings half and half between regular
and intermediate auctions, make DNR sales about the
same in market attractiveness as compared to other
public ownerships
While not nearly as important as price, access issues were
noted by many as a significant factor in whether or not to
buy a DNR sale.
Questions 1-3 establish a profile of respondents related to
volume, location and ownership of the timber they purchase.
Q1: What percentage of volume did you purchase by
ownership?
Respondents purchase
Private State
wood from all available 33% 36%
sources.
State stumpage had the County
highest reported % of 27%
volume purchased by Federal
respondents, at 36%, 3%
closely followed by private
at 33% and County at 27%.
Q2: What volume of wood do you purchase annually?
Of the 160 firms responding:
54% purchase less than or equal to 5,000 cords
22% purchase 5,000 to 10,000 cords
18% purchase 10,000 to 25,000 cords
4% purchase 25,000 cords to 50,000 cords
2% purchase more than 50,000 cords
Q3: In which Minnesota Counties do you buy wood?
PRIMARY COUNTY NUMBER OF PERCENT OF CUMMULATIVE %
FIRMS FIRMS
Koochiching 25 16% 16%
Itasca 23 14% 30%
Aitkin 16 10% 40%
St. Louis 15 9% 49%
Beltrami 11 7% 56%
Cass 9 6% 62%
Hubbard 8 5% 67%
Pine 8 5% 72%
Lake Of Woods 6 4% 76%
Cook 5 3% 79%
The top 10 primary counties represent 79% of respondents.
Q4: Do you prefer sales that are lump sum, PAC-scaled,
PAC-SOAV or no preference?
PAC (pay-as-cut)- scaled sales
Lump No
are preferred by 31% followed by Sum Pref.
PAC-SOAV at 28%. 19% 22%
19% of purchasers prefer lump PAC PAC
sum payment. Scaled SOAV
____________________________________________________________________
31% 28%
Sale Methods:
PAC =Pay-As-Cut (billed quarterly)
Lump Sum= sale is paid in full at time of purchase
Scale Methods:
Scaled= payment based on scaled volume
SOAV= Sold On Appraised Volume, payment based on appraised volume
Q5: Is the down payment required on DNR sales (15%)
a significant barrier to purchase of DNR sales
compared to other ownerships?
68% of firms said “NO
BARRIER”
By firm size:
Yes
75% of firms in the 25,000 31.7%
to 50,000 cord size range No
answered “YES, A BARRIER” 68.3%
(3 of 4 reporting).
Q6: What sale size best fits your business on an operating basis?
2,501 to > 4,000cds
4,000 cds 2%
1,001 to 3%
2,500 cds
14%
82% said 1,000 cords or
less 100 to 500
cds 39%
96% said 2,500 cords or
less 501 to
1,000 cds
43%
Q7: Would you generally prefer State timber sales to be
larger, smaller, or about the current mix of sizes:
Smaller
Current mix of sales is Volume
right - 56% 15%
Current Larger
Larger volume - 29% Mix Volume
56% 29%
Smaller volume - 15%
Q8a: How important is third-party certified fiber to
your business?
Very
About half of 13%
respondents indicated
certification is Not At All
somewhat to very Somewhat 51%
important. 36%
Conversely, over half of
respondents indicated
certification was not
important at all.
Q8b: Which certified fiber system are you using?
52% of respondents use FSC
9%
both systems.
67% of firms that purchase Both
SFI
more than 25,000 cords per 52%
39%
year utilize SFI exclusively.
Q9: Rank these items (1 to 4), with 1 having the
greatest impact on your interest in a timber sale?
Only the #1 answers are shown.
Some 50% of purchasers Access
25%
reported species as the #1 Species
consideration. 50%
Wood
Quality
Total is more than 100% 30%
because many respondents
Sale Location
recorded multiple #1 items. 34%
Q10: Compared to a one year sale, would you be likely
to raise your bid by at least 10% for a permit length of:
2 Years
Of 144 responses:
7%
66% of all firms said they
would increase bid for permit Doesn't
lengths of >= 2 years. Matter
3 Years
34%
26%
All 3 MN firms that cut
more than 50,000 cords said
they would increase their bid
for permit lengths >=3 years. LongerThan
3 Years
33%
Q11: Are multi-area DNR auctions helpful to your business?
Definition: A multi-area DNR auction means that two or more
areas bring timber sales to the same place, on the same day, on
the same notice of sale.
YES-
YES- 42%
Main reason given:
-Saves time
Yes
42%
NO-
NO- 58% No
Main reason given: 58%
-Increases competition
Q12: When compared to other ownerships, is there
anything about state timber sales that make them
more or less desirable to acquire? If yes, please explain
Explanations for more desirable:
-Boundary lines are marked
-Professional staff oversees
-Certified status of the wood Yes
-Length of sale-more options 41%
No
Explanations for less desirable: 58%
-Sale regulations more complicated
-Higher security requirements
-Quality issues with the timber
Q13: Does the sale method of regular or intermediate auction
versus informal sale, have an impact on your willingness or
ability to purchase state timber? If yes, please explain
Yes-
Yes- 42%
Some explanations given for
yes:
-Can’t outbid the big guys… Yes
42%
-Opens doors for some No
smaller operations 58%
-Some complained because
they were unable to bid on
intermediates…
No-
No- 58%
Q14: If you know of DNR timber sales that went unsold for
reasons other than price, please list the reasons why you did
not bid, in order of importance.
TOP 10 REASONS FOR NOT BIDDING ON A DNR TIMBER SALE,
OTHER THAN PRICE …
1. Access issues (no guarantee, wetland, roadwork)
2. Poor quality wood
3. Sale is too small
4. Distance to markets is too far
Un-
5. Un-merchantable species percentage too high
6. Expensive road costs for low volume
7. Cumbersome sale harvest restrictions
8. Seasonal operating restrictions
9. Sale is too large
10. Have enough permits for now
Q15: When compared to other public ownerships, do
administrative rules and procedures such as the different
forms of security required, or splitting annual timber
offerings annual make DNR sales more or less
attractive? If answer is not the same, please
More
Reasons why more Attractive
attractive: 7%
-Intermediate/Regular split Less
is helpful to some Attractive
21% About the
Reasons why less attractive: Same
-Too many sale rules 73%
-Too much security
-Intermediate/Regular split
negative for some
Q16: Would you consider doing site work, in addition
to logging, if you could use your existing equipment
and it would offset a portion of your stumpage costs?
Already
Doing
Example: Felling No
1%
residual trees 10%
Yes
89%
For more
information
U&M Program Contacts:
Keith Jacobson, U&M Program Supervisor, keith,jacobson@state.mn.us
Mimi Barzen, mimi.barzen@state.mn.us
Rick Dahlman, rick.dahlman@state.mn.us
Don Deckard, donald.deckard@state.mn.us
Lance Sorensen, lance.sorensen@state.mn.us
Steve Vongroven, steve.vongroven@state.mn.us
Timber Program Contacts:
Lillian Baker, Timber Program Supervisor, lillian.baker@state.mn.us
Gaylord Paulson, gaylord.paulson@state.mn.us