Jackson Forest Forum

August, 2009. The saga of the attempt to sell timber in the North Fork Spur area demonstrates vividly the urgent need to reform timber sale practices in Jackson Forest. This sale was offered twice. Both times there was only a single bidder.

The rejection of the sole bid in the first sale created a political uproar from the Mendocino timber community, causing Jackson Forest to open the sale again. In the first sale, no minimum price was set for redwood, and the bidder, Schmidbauer Lumber of Eureka, offered an absurdly low price of $50 per thousand board feet — less than 10% of the normal price.

In the second sale, Cal Fire set a minimum bid of $205 per thousand board feet for redwood. Schmidbauer was again the sole bidder, bidding just the minimums, and the bid was accepted.

At first glance, the rebid appears to have been good for Jackson Forest. It will receive about $350,000, compared to the $110,000 offered on the first sale. But, in responding to the political pressures, Cal Fire apparently bent over more than a little to ensure that the timber would be sold. The minimum bid of $205 per thousand board feet is well  below even current depressed redwood prices.

When I learned about the terms of the resale, I investigated the current market for redwood in Mendocino County and found that a more appropriate market price would have been about $300 per thousand. This would have added $150,000 to the amount received by Jackson Forest for the 4.5 million board feet of timber it sold.

I wrote my finding to Russ Henly, Cal Fire Assistant Deputy Director for Resource Protection. In his reply, he attempted to justify the bid, but he did so by assuming logging costs well above those already specified by Schmidbauer in its initial bid and then tacking on a "profit and risk factor" of 12%. The current depressed market price of timber more than provides an adequate risk and profit factor.

The present practice is for managers of the forest to create a timber harvest plan (THP) that specifies the amounts of timber to be cut and the logging methods. The THP is then put out for bids and sold to the highest bidder. The winning bidder then hires a logging company to do the harvesting and hauling.

The core defect in the present system is that it was designed for a time when the timber industry in Mendocino County was very much larger and multiple mills in nearby Fort Bragg were competing for logs. Now there are no mills in Fort Bragg and only a few mills in the county.

Rather than a competitive bidding situation, we now have a few mills that all exchange information and logs; so there is not the opportunity for open, honest bidding. Equally important, Jackson Forest sales are very large and require large payments up front. These factors discourage bidders and depress the price that Jackson is likely to receive.

The solution to this is for Jackson Forest to harvest and deck logs on its own. It can then sort the logs by types and offer lots of these for sale or bid in quantities that will have the best demand. Micro mills in the area would be able to purchase logs from Jackson, something not currently possible. Not only would this improve the price received, but it would allow Jackson Forest to hire and oversee the logging contractors, ensuring that they met the high standards appropriate for Jackson forest.

The Jackson Advisory Group is expected to recommend making this change. It deserves widespread support.