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Bids for BLM sales are down
By Jolene Guzman, Staff Writer
Saturday, November 15, 2008 | No comments posted.
Coos County isn’t the only government entity experiencing the effects of a plummeting timber market.
This year the U.S. Bureau of Land Management’s Coos Bay District offered more timber sales than logging companies were willing to bid on.
Of the nine sales offered by the district this year, four of them received no bids.
“It’s been off and on,” district spokeswoman Megan Harper said.
Sales since November 2007 netted about $1 million for the district. If all sales had sold at the appraised price — bids are sometimes higher — that value would have exceeded $1.7 million. Appraisals are done before sales are put out to bid to determine a minimum bid price.
August and September were the worst months. Both sales in August and one of two sales in September went without bids. A November 2007 sale also went bidless, but sold in December 2007 at the appraised price. Harper said scary economic news, slipping lumber prices and soaring fuel costs kept logging companies away. Fluctuations in lumber prices are often a reflection of the ups and downs in the housing market and higher gas prices drive up the cost of hauling logs, she said.
One other factor worked against BLM, in the agency had appraised sales, but then the economy crashed.
“They were appraised a little high, which makes it difficult to log it economically and get a good turn on the sale,” Harper said.
The BLM requires timber buyers to pay a percentage of the price up front, then the rest after the sale is logged. Logging companies typically have three years to cut timber, depending on the sale, which allows them time to wait for better market conditions. Even that assurance hasn’t swayed potential bidders lately.
Usually when a sale receives no bids, BLM foresters go back and review the sale to see if they can cut costs from the bid, such as having BLM handle road maintenance rather than the bidder. With other sales, it’s a matter of holding off until favorable conditions swing back around, Harper said.
History shows that does happen. It’s just not a quick turnaround.
This year the U.S. Bureau of Land Management’s Coos Bay District offered more timber sales than logging companies were willing to bid on.
Of the nine sales offered by the district this year, four of them received no bids.
“It’s been off and on,” district spokeswoman Megan Harper said.
Sales since November 2007 netted about $1 million for the district. If all sales had sold at the appraised price — bids are sometimes higher — that value would have exceeded $1.7 million. Appraisals are done before sales are put out to bid to determine a minimum bid price.
August and September were the worst months. Both sales in August and one of two sales in September went without bids. A November 2007 sale also went bidless, but sold in December 2007 at the appraised price. Harper said scary economic news, slipping lumber prices and soaring fuel costs kept logging companies away. Fluctuations in lumber prices are often a reflection of the ups and downs in the housing market and higher gas prices drive up the cost of hauling logs, she said.
One other factor worked against BLM, in the agency had appraised sales, but then the economy crashed.
“They were appraised a little high, which makes it difficult to log it economically and get a good turn on the sale,” Harper said.
The BLM requires timber buyers to pay a percentage of the price up front, then the rest after the sale is logged. Logging companies typically have three years to cut timber, depending on the sale, which allows them time to wait for better market conditions. Even that assurance hasn’t swayed potential bidders lately.
Usually when a sale receives no bids, BLM foresters go back and review the sale to see if they can cut costs from the bid, such as having BLM handle road maintenance rather than the bidder. With other sales, it’s a matter of holding off until favorable conditions swing back around, Harper said.
History shows that does happen. It’s just not a quick turnaround.
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