l*"""<. Division of Agricultural Scienc e s UNIVERSITY OF CALIFORNIA TIMBER MARKETING and LAND OWNERSHIP in MENDOCINO COUNTY grartr CALIFORNIA AGRICULTURAL EXPERIMENT STATION BULLETIN 772 Mendocino County is rich in commercial forests — 1,305,000 acres, or 58 per cent of its total land area; has an unusually high proportion of pri- vately owned holdings — 81 per cent of the commercial forest area, twice as much as for the rest of the state; -^ has a high proportion of small holdings — 57 per cent of the private commercial forest area of the county, one-fifth of all of Cali- fornia's forest properties under 5,000 acres. The great postwar boom in timber increased annual lumber production in the county more than sixfold within 10 years; boosted the county as an important lumber supplier — the 1956 cut of 874 million board feet was 2.3 per cent of the national lumber output; expanded the importance of the forest industries in the local economy; brought into existence many new mills and logging operations; developed new markets for Douglas-fir and for old-growth redwood stands once inaccessible because of high logging costs; increased the need for efficient timber marketing — with much of the county's forests under control separate from that of the utilization plants, operators had to buy needed timber from the land owners; made the small forest owner — who had little experience or interest in * timber marketing and whose primary interest commonly lay elsewhere — a major source of timber supply. At first everyone seemed to prosper. small-forest owners had "windfalls" selling timber once thought worth- j less. new mill and timber operators found an available supply of timber on these small ownerships. But then major imperfections in timber marketing became apparent, detri- J mental to sellers, buyers, and the county as a whole. faulty marketing practices led to dissatisfaction with timber selling, timber-property damage, withdrawal of holdings from the market, and underestimation of the possibilities of planned forest management on small woodlands. The postwar timber market in Mendocino County has been a transition market which cannot persist over a long period. To guide this transition into a sound, permanent forest economy, to avoid resource depletion which would lead to a contraction of the county's forest industries, this study offers basic information and evaluates the effectiveness of present marketing procedures. It points out weaknesses and offers suggestions as to how to overcome them. The study is aimed at developing more efficient timber marketing in the county, and at bringing about a better understanding of timber marketing in an area of rapidly expanding cut. This is done by an analysis of information drawn from a sample of small-forest owners. The study also covers the current land-ownership situation, as several aspects of marketing are related to the nature and stability of timber holdings. You will find the summary and evaluation of the findings on pages 4 to 8. Owners of small timber properties and loggers and millmen who obtain stump- age and logs from such properties will find details of marketing practices on pages 26 to 44. All those interested in the relationship of marketing and land ownership to economic development and forest policies, particularly as they concern small forest properties, will find in this bulletin basic data about the forest industries in the county, the pattern of land ownership, changes in this pattern over a ten-year period, and a description of the marketing system for standing timber from the small forest holdings. CONTENTS The Findings 4 Timber marketing 26 The Forest Economy of Research method 27 Mendocino County 9 Sales characteristics 27 Resource base 9 Marketing practices 30 Forest industries 11 Variations in sales practices 38 Lumber and land 13 . . _, Prices and price-determining factors.. 41 Forestry and markets 16 tl /~l ex , r i j r\ l- i-7 Why woodland owners won't sell 42 The Changing Status of Land Ownership. . 17 7 Basis of the study 17 Home use of wood,and products 43 Land ownership in 1957 18 Purchasing procedures of timber buyers 43 Change in land ownership, 1948-1957 21 Appendix 45 Woodland Marketing Practices 26 Literature Cited 56 THE AUTHORS: Paul Casamajor is Lecturer, School of Forestry, and Associate Specialist in Forestry in the Agri- cultural Experiment Station, Berkeley; Dennis E. Teeguarden is Assistant Specialist in the Agricul- tural Experiment Station, Berkeley; John A. Zivnuska is Professor, School of Forestry, Forester in the Agricultural Experiment Station, and Forester on the Giannini Foundation, Berkeley. JUNE, 1960 TIMBER MARKETING AND LAND IN MENDOCINO PAUL CASAMAJOR DENNIS E. TEEGUARDEN THE FINDINGS .[resent timber-marketing practices and institutions for small woodlands in Mendocino County are poorly devel- oped and disorganized. Although large amounts of timber have been marketed, this situation is unfavorable to the pro- ductive use of the forest-land resources of the county and the development of adequate timber for the long-range fu- ture of its wood-using industries. The great postwar surge in lumber production brought an unanticipated de- mand for the timber on small holdings. Newly developed and often temporary mills and logging operations created a wave of timber buyers who purchased from the small-property owners. These owners knew little about their timber holdings, seldom had experience in tim- ber sales, and played a passive role in the marketing process. Sales transactions in the county are developed separately and on highly in- dividualized and variable bases. The marketing process does not include stages with a high enough degree of concentration to bring the forces of sup- ply and demand into focus; there exist no centers of information where buyers or sellers can learn about timber avail- ability or mill requirements. There is not even a clearly defined and uniformly applied unit for the measurement of the physical quantity of the timber bought or sold. The traditional estimating and scaling 1 Submitted for publication August, 1959. practices of the lumber industry may be adequate for transactions between ex- perienced traders but in the postwar sit- uation in Mendocino County they con- tributed directly to the difficulties in woodland markets. The main weakness in marketing practices lies in the sellers' ready ac- ceptance of a passive role and their lack of realization of the complex nature of timber sales. These sales involve cutting rights to standing timber, since timber size and other considerations usually tend to preclude logging directly by the owners unless they are specialized timber operators. Standing timber is not a standardized good separate from the property to be sold at the side of the road or in an organized market place. Instead, each property has its distinctive features affecting values and marketing possibilities, while the fixed nature of forest stands requires that the purchasers have the right to enter the sellers' lands to cut and remove the trees, which di- rectly affects the residual values. A suc- cessful sale requires an informed and active seller who can provide for the detailed administration and supervision of all procedures related to the sale. In short, a portion of the returns from the sale must be invested in sale preparation and sale supervision. For small-woodland owners who are not actively aware of the possibilities and problems of selling timber, no prescrip- tion of particular steps for improving [4] WNERSHIP OUNTY JOHN A. ZIVNUSKA sales procedures can be meaningful. The details of these procedures are discussed fully on pages 26 to 44. Frequently the problems lie more in the application of the procedures than in the procedures themselves. Written contracts have given sellers little protection when prepared without adequate recognition of legal and forestry problems at issue and when used without the support of careful su- pervision and active enforcement. Either the lump-sum basis or the scaled-volume basis of sale can be effective if the sale is carefully prepared and administered, and either is subject to gross abuse with- out such preparation and administration. Much the same is true for many of the other steps in the sales process. Accurate and meaningful price reporting for standing timber does not appear to be feasible under the condi- tions prevailing in the county. The de- tailed and time-consuming field inter- views of this study plus an analysis of recorded timber-sale contracts did not produce data adequate for the appraisal of price levels for individual properties or for the isolation of the effects of price determining factors. A fundamental dif- ficulty in price reporting is the lack of precise and fully defined information as to the price received by the sellers. One- third of the standing-timber sales were on a lump-sum basis, which automati- cally makes the significance of any data on price per thousand highly question- able. In the two-thirds of the sales on a scaled-volume basis, variations in scaling practice — often unreported and fre- quently unknown — substantially reduce the reliability of price data. In a number of cases the sale was based not only on cash payment for the timber but also on supplemental services such as road build- ing, the value of which cannot be readily determined. The timber itself ranges from residual old-growth redwood trees to second-growth Douglas-fir stands, and varies widely in costs of logging and log quality. To these differences must be added wide variation in terms of sale such as length of cutting rights, liability for taxes or fire, time of payment, re- sponsibility for slash removal, and sim- ilar matters, all of which must be defined to give precise meaning to quoted prices. The quoted price for standing timber, therefore, is not as clear an indicator of the success of a sale as is true in many other areas of economic activity. Price is only one of several factors determining the actual return to the seller. Accurate determination of the volume cut also has a great effect on the gross cash income from the sale, while the condition of the residual stand and damage to roads, fences, and other improvements may often be the dominant factor in deter- mining the net benefits received. The sellers' complaints usually centered on cutting and logging practices, slash dis- posal, scaling practices, and failure to provide services rather than on price. Far-reaching consequences. These weaknesses in the marketing practices extend beyond the question of returns to the small woodland owners. They di- rectly affect the commercial-timber sup- ply of the entire county and the long- range prospects for its forest-products industries. Small timber holdings (own- erships of less than 5,000 acres) are widespread in the county, comprising 57 per cent of its private commercial forest land. Of the 126 such small-woodland owners interviewed, 23 per cent stated i] that they would not sell timber because they believed logging would conflict with their primary purposes of ownership (mostly recreational or residential use). Each of these owners held a small area, but together their holdings comprised nearly 11 per cent of the total area in the sample. The basis for their reluctance to sell is suggested by the fact that of the owners who made one or more timber sales, 40 per cent indicated dissatisfac- tion with the results of the logging. This tendency to withdraw an appre- ciable proportion of the small-woodland holdings from commercial timber pro- duction is particularly pronounced in the holdings of less than 180 acres, which include about one-fifth of the small- woodland area and about 9 per cent of the total private forest land in the county. The rapid turnover of ownership, the in- creasing fragmentation of holdings, and the common purposes of ownership all indicate that these very small forest hold- ings are not likely to be an important source of timber in the future. Such with- holding of lands from logging has a direct and immediate effect on the avail- able timber supply. Existing marketing practices also dis- courage the development of planned management on small woodlands. The passive role in the timber transactions played by those owners willing to sell indicates that strong interest in the in- come possibilities from small woodlands is not common. The basis of cutting has been dominated by buyer's choice, by the removal of all merchantable trees, or by diameter-limit cutting; timber marking and silvicultural considerations entered into only 3 per cent of the sales. In short, conscious provision for future growth from woodlands has been the exception. Deliberate land clearing was three times as common among the sample owners as silvicultural marking. In most of the cases studied, growth on the residual stands will be as much by chance of nature as was the volume removed in the logging operation. How can marketing from small woodlands be improved? A diagnosis of the nature of current marketing practices does not automati- cally lead to the prescription of the rem- edy. Indeed, some of the conventional prescriptions such as price reporting, the use of written contracts, and the use of competitive bidding have been dis- counted as either unfeasible under the conditions in the county or as not nec- essarily effective. Successful timber sales from small woodlands can be and are being made in Mendocino County. However, success in obtaining the full value of the timber cut and protecting the value of the tim- ber remaining does not appear to be pri- marily a matter of following particular devices or procedures in the marketing process. The successful seller is well in- formed, careful in the selection of pro- cedures, and active in the supervision of all aspects of the sale. To improve woodland marketing, the small-woodland owners will have to in- crease their interest and knowledge, and the forest industries will have to develop more stable and organized purchasing methods to facilitate the market access of the sellers whatever their state of knowledge. Needed: Well-informed owners Small ownership has been fluid and unstable in Mendocino County. It is es- timated that in 1957 there were 3,050 ownerships of rural land of less than 180 acres and another 815 holdings between 180 and 4,999 acres in size. Approxi- mately 67 per cent of the number, with 51 per cent of the area, were held by owners new to the property since 1948. Another 13 per cent of the number and 33 per cent of the area were held by own- ers who held land in 1948 but who had [6 either increased or decreased the size of their holdings. Only 20 per cent of the number and 16 per cent of the area rep- resented holdings unchanged since 1947. Direct education of such a large num- ber of fluid and unstable owners would be difficult. To a considerable extent, these characteristics of the ownerships explain why small-woodland owners made only limited use of technical assist- ance in marketing, and why they gen- erally did not even know that such assist- ance was available. Public agencies, through their serv- ice programs, can play an important role in this owner education by focusing at- tention on demonstration and by assist- ing on individual properties which, in turn, can serve as centers of influence. To succeed in these efforts, thorough consideration of the ownership structure and stability is essential. For example, concentration of the program on prop- erties larger than 180 acres would reduce the number of potential contacts to 18 per cent of the total number of small holdings, while covering 82 per cent of the total land area in such holdings. Al- though this study has not been directly concerned with holdings from 5,000 to 20,000 acres, this size range is highly important for the future level of forest production in the county. Here 42 own- erships — largely held by livestock inter- ests — include 38 per cent as much rural land as all 3,865 small holdings. Because manufactured products rather than standing timber are generally marketed from holdings larger than 20,000 acres, these ownerships are not of concern in terms of the types of issues considered here. Private forestry consultants could also play an important role in providing marketing assistance and sales supervi- sion for the woodland owners. Over two- thirds of the sales reported in this study amounted to $2,000 or more, and one- third to more than $10,000. Improved handling of many of these sales would have provided an ample margin to repay the added expenses. Such services are available in the county, although small- woodland owners used them very little. Needed: Stable, organized purchasing methods Substantial improvement in woodland marketing directly through the owners is limited because tenure is unstable, the number of owners is large, and their main interest lies elsewhere. Just as the buyers have been the more active group in the current marketing situation, they are also the primary source from which improvements in marketing may come. The forest industries can do much to improve woodland marketing by estab- lishing stable, organized purchasing methods. It is true, of course, that the immediate interests of buyers and sellers are in opposition. Over a short period increased profits for the one likely mean decreased earnings for the other. However, over a longer period the development of perma- nent forest industries, based on wood grown on small holdings, benefits both buyers and sellers. Such permanent in- dustries must rely on market forces to bring about the necessary continuous supply of timber from small holdings. During the period of this study, wood- land marketing in Mendocino Countv was dominated by unstable, shifting tenure on the side of the sellers, and bv unstable, often temporary and short- lived mills or timber operators, on the side of the buyers. Both buyers and sell- ers had primarily short-term interests at heart, and it is not surprising that the resulting pattern has been disorganized and not conducive to long-term forest management. Substantial improvement in market- ing is likely to be achieved only through the introduction of some element of sta- bility. The large population increase and [7] the developments in land ownership in California (for Mendocino County, de- scribed on pages 17 to 26) make it more probable that such stability can come from the forest industries than from the woodland owners. If the development of additional permanent forest industries in the county can be encouraged, it would be in their long-term interests to improve marketing institutions and prac- tices. This has been the experience in other parts of the United States. The development of permanent forest indus- tries has been accompanied by improved methods of measuring timber volumes, standardization of the terms of sale of standing timber, encouragement by the buyers to mark timber for cutting on a silvicultural basis, and greatly improved information about availability and inter- est of timber buyers. Even long-term con- tracts with small-woodland owners are being actively developed by some of the larger companies. What can the individual wood- land owner do to improve his market opportunities ? He can take a more active part in the development of the sale; he can make use of the technical assistance available from public agencies and con- sulting foresters; and he can closely su- pervise all phases of the transaction. General improvement in woodland mar- keting does not seem likely, however, through programs which concentrate solely on the seller. What is needed also are permanent and stable industries buy- ing timber from woodlands on an or- ganized purchasing basis. The future forest economy of Mendocino County is favored by a large area of productive forest land in private ownership and well situated relative to major consuming centers in the state. Developments of the period since World War II have brought into an active tim- ber market the 47 per cent of this private forest area which is in holdings of less than 5,000 acres. This market has been dominated by short-term interests and general instability for both buyers and sellers. It is clearly a transition market which cannot persist over a long period. If the transition is to lead to a perma- nent forest economy and not to a de- pleted resource and contracted industrial output, the development of improved woodland marketing must be recognized as dependent upon as well as essential to the development of improved and permanent forest industries. [8] THE FOREST ECONOMY OF MENDOCINO COUNTY Resource base Mendocino County is a mountainous area of 2,246,000 acres, fronting on the Pacific Ocean. The land resources, trans- portation routes, and pattern of develop- ment are oriented to the topography. The dominant features are two major north- south ridges of the Coast Range. These ridges are separated by the Russian River flowing southward and the Eel River flowing northwest, with the divide between the two drainages lying between the first and third largest communities in the county, Ukiah and Willits. The second largest community, Fort Bragg, is located on the coast. The major high- way and rail transportation routes follow the Russian River-Eel River drainages, with the western of the ridges forming a substantial barrier to commerce between the coastal area and the developments along the central valleys. This rugged terrain is largely covered with forests and brush (Baker and Poli, 1951) . 2 Forest land suitable for growing commercial crops of wood includes 1,305,000 acres, or 58 per cent of the county's area. Open hardwood stands and chaparral cover another 609,000 acres, giving a total of 85 per cent of the area in forest or brush. The arable land is scattered in separate valleys along the main drainages and the coast. The commercial - forest types are strongly controlled by the topography. Some 771,000 acres of redwood type form a fairly continuous forest cover beginning a short distance inland from the coast and covering most of the west- ern front of the Coast Range. To the east of this lie 332,000 acres of Douglas- fir type in somewhat scattered areas, pri- - See Literature Cited. Table 1. Distribution of Land, Mendocino County, 1948 Area in thousand Type of Land acres Commercial forest land Pine 29 Redwood 771 Douglas-fir 332 Fir 5 Pine — Douglas-fir — Fir 168 Sub-Total 1,305 Noncommercial forest land Noncommercial coniferous types. ... 64 Hardwood types 154 Timber-grass types 229 Chaparral 162 Sub-Total 609 Nonforest land Grass 231 Cultivated, urban, and industrial ... 75 Coastal sagebrush 7 Barren 15 Marsh 1 Water 3 Sub-Total 332 Total— All land 2,246 Source: Table 2, Baker and Poli (1951). marily on the eastern face of the westerly of the two major mountain ridges of the county. On the easterly of the two ridges, largely in the northeastern part of the county, there is a broken pattern of 168,- 000 acres of pine — Douglas-fir — fir type and 34,000 acres of either pine type or fir type. The open hardwood and chap- arral types occur characteristically on the lower slopes of the ranges. In 1948 the forests of the county in- cluded 13,000 acres of old-growth, 447,- ( Continued on page 11) [9] Terms used in this bulletin The classifications used in this study are based on those used in the Forest Survey conducted by the Pacific South- west Forest and Range Experiment Sta- tion, U. S. Forest Service. The more important classifications used are de- fined below. Land area Commercial forest land. Forest land which (a) is producing, or is phys- ically capable of producing, usable crops of wood (usually saw timber), (b) is economically available now or prospectively, and (c) is not with- drawn from timber utilization. Noncommercial forest land. Forest land incapable of yielding usable crops of wood products (usually saw timber) because of adverse site con- ditions, or so physically inaccessible as to be permanently unavailable eco- nomically, or withdrawn from timber utilization for specific purpose. In- cludes chaparral land. Nonforest land. Land that does not qualify as forest land. Includes land which has never supported forest growth; land from which the forest has been removed to less than 10 per cent stocking and has been developed for other use; all land in thickly pop- ulated urban and suburban areas; and water classified by the Bureau of Census as land. Commercial timber types: a. Pine: areas with ponderosa, Jeffrey, or sugar pine comprising more than 80 per cent of the timber cover. b. Douglas-fir: areas with Douglas-fir comprising more than 80 per cent of the timber cover ; or mixtures of Douglas-fir and the true firs in which Douglas-fir comprises 20 per cent or more of the timber cover. c. Fir: areas with true firs (white or red) comprising more than 80 per cent of the timber cover; or mix- tures of the true firs and lodgepole pine, mountain hemlock, or western white pine, in which the true firs comprise 20 per cent or more of the timber cover. d. Pine — Douglas-fir — Fir: areas with mixtures of the commercial pines and either Douglas-fir or the true firs in which the pines comprise from 20 to 50 per cent of the timber cover. e. Redwood: areas with redwood com- prising 20 per cent or more of the timber cover. Classification of type of private ownership Timber interests Timber operating company. A cor- poration actively engaged in com- mercial logging and milling of timber as a major enterprise. Timber holding company. A cor- poration holding timber land for future commercial timber opera- tions. The timber may be held for the company's own future use or to sell to other operators. Timber operating individual. A per- son whose major enterprise is com- mercial timber operations. This includes individuals logging tim- ber, operating a large or small saw- mill, or splitting timber commer- cially for sale. Timber holding individual. A per- son holding timber land for future commercial timber operations. The timber may be held for his own future operations or to sell to other operators. [10 Agricultural interests Range livestock farming company. A corporation engaged primarily in range livestock farming opera- tions. Range livestock farming individ- ual. A person whose major enter- prise is range livestock farming. Other farmers. Persons or corpo- rations that have farming as their major activity, but whose principal agricultural enterprise is not range livestock farming. Miscellaneous interests Recreational property owners. Per- sons or corporations holding land principally for recreational pur- poses. Other classified owners. All other land owners whose classification is known but does not logically fit the classes listed above. Examples are owners of land held for residential purposes only, mining claims, and reservoir sites. Other terms Stumpage. In a general sense, stand- ing timber. Also may mean the value of timber as it stands uncut in the woods. Log scale. The lumber contents of a log, or of a number of logs considered collectively, based on a specific log rule. Scaling is the measurement of a log (or logs) to estimate its lumber volume, as indicated by a particular log rule and scaling practices. (Continued from page 9) 000 acres of old-growth with a mixture of young-growth, 389,000 acres of young- growth with a mixture of old-growth, 242,000 acres of large young-growth, 103,000 acres of small young-growth, and 111,000 acres non-stocked (Baker and Poli, 1951). Although detailed For- est Survey data are not available for the county, it has been estimated that in 1954 there were about 22 billion board feet of timber in old-growth stands, 7 billion board feet in young-growth stands, and another 1 billion board feet scattered over non-stocked areas (May, 1954) . The economic structure of the county reflects this resource base. From its ear- liest development to the present time, lumbering and agriculture have been the mainstays of the area. An economic anal- ysis of the county showed that in 1948 manufacturing (primarily of forest prod- ucts) was the direct source of 34 per cent, and agriculture of 21 per cent, of the earned income with much of the bal- ance coming from the servicing of these two major forms of activity (Industrial Survey Associates, 1951). The main forms of agriculture are livestock ranch- ing and the production of fruits and nuts. The more intensive forms of agri- culture have been concentrated in the val- ley bottoms, while the livestock ranching has been in the hills, coming into direct contact with the timbered areas. In the past, attitudes toward land use in the county have been strongly colored by the traditional conflict between stock and timber. Recreational use of the county is well established, and many local groups hope for a major expansion of such ac- tivity in the future. Forest industries The first lumber mill in the county was established at Mendocino City in 1852. Within 20 years there were 19 mills in operation. Relying on coastal ship- ping in its early development, the indus- try for many decades was oriented pri- marily to the production of redwood lumber from the coastal forests. During [in the early 1920s production was gener- ally above 200 million board feet annu- ally (figure 1), and in 1921 and 1922 Mendocino County ranked second among the counties of the state in lum- ber output (May, 1953). The subsequent decline was greatly accentuated by the depression period of the early 1930s, and it was not until the period following World War II that the county's lumber production regained and then greatly surpassed the previous highs. In 1956 production amounted to 874 million board feet (May and Baker, 1957) — 14.9 per cent of the state total and 2.3 per cent of the national total for the year. Mendocino County has ranked second to Humboldt County in volume of out- put since 1948. The veneer and plywood industry has developed entirely during the postwar period. In 1946 no veneer logs were pro- duced in the county, while in 1956 an estimated 66 million board feet of veneer logs were cut (May, 1957). With two plywood plants and four veneer mills active in the county by the end of 1956, 51 million board feet of this volume were manufactured within the county, with 1000 Fig. 1920 1. 1930 1940 1950 Lumber production in Mendocino County, 1920-1956. the balance going to mills in either So- noma or Humboldt County. Production of pulpwood has been very limited. The plant of Masonite Corpora- tion at Ukiah represents one of the two large pulp operations in the state prior to 1957. This plant was originally in- tended to operate on pulp logs and Ma- sonite became the second-largest land- holder in the county. However, in recent years chips from sawmill residues have been the primary raw material. The Fibreboard operation at Antioch and the three roofing-felt plants in the San Fran- cisco Bay area are also potential pulp- wood markets for the county. Following the beginning of production at Masonite in 1950, pulpwood production in Mendo- cino County rose to a peak of 74.4 mil- lion board feet of pulp logs in 1952. Re- flecting the general swing toward the use of chips, pulpwood production then de- clined steadily to 11.6 million board feet in 1956. For all practical purposes, there is no available pulpwood market for the average landowner. The production of grape stakes, fence posts, and other split products from red- wood is a long-established small-scale in- dustry in the area. There is also some production of poles and piling, as well as a limited output of other minor forest products. The general pattern of timber opera- tions in the county is shown by the rec- ord of timber operators registering with the California Division of Forestry (fig- ure 2). This record is somewhat incom- plete, since production reports are ob- tained only from those timber operators who re-register during the following year, but it is the best available record of log output. These reports show a rapid rise from 210 million board feet in 1947, the first year of record, to a peak of 1,030 million in 1955. The dominant role of the lumber industry is shown clearly. Of the total volume of 990 million board feet reported for 1956, sawlogs represented [12 93.6 per cent, veneer logs 4.2 per cent, pulp logs 1.2 per cent, and other products 1.0 per cent. Lumber and land The great expansion in the lumber in- dustry has been the driving force in the county's economy during the period after World War II. As shown in table 2, lumber production doubled from 1946 to 1947, doubled once more by 1951, and then expanded half again in size during the following five years. Produc- tion in 1956 was six times as high as that in 1946. This record appears the more remarkable when it is noted that nationally lumber production has shown no change from 1951 to 1956, and that output in 1956 was only 10.5 per cent higher than in 1946. In addition to lumber production within the county, there is a net move- ment of logs out of the county for lum- ber manufacture elsewhere. In 1956 a net transfer of 17 million feet of logs from Humboldt County into Mendocino County was far more than offset by the movement of 37 million feet from Men- 1000 800 AJI logs ~+/ / M t r * // Saw logs and veneer logs 600 // i> It M* ft 1/ 400 200 - Polpwood III! f 1950 1952 1954 1956 Fig. 2. Log production in Mendocino County as reported by registered timber operators, 1947-1956. docino County to Sonoma County (May and Baker, 1958). Throughout the period Douglas-fir and redwood dominated the lumber output. In 1946 Douglas-fir formed 43.7 per cent of the total and redwood 46.6 per cent (May and Simontacchi, 1947). In 1951, Douglas-fir production was 40.4 per cent, Table 2. Number of Active Sawmills and Lumber Production, Mendocino County, 1945-1956 Year Number of active sawmills Lumber production in million board feet Total Redwood Douglas-fir Pine True firs Other 1946 93 93 129 126 105 144.7 283.7 386.9 376.0 440.0 585.6 610.0 772.0 874.4 67.4 242.3 321.5 360.5 361.2 63.2 119.6 237.2 310.2 463.5 11.4 5.3 24.4 50.1 37.3 1.7 0.3 2.3 48.0 12.3 0.9 1947 1948 0.2 1949 1950 1951 0.1 1952 1953 1954 3.2 1955 1956 0.1 Based on data compiled by the California Forest and Range Experiment Station, U. S. Forest Service. Data for 1954 are from Census reports. Species data for 1948 exclude production of 19.35 million board feet included in the total and produced in the extreme eastern part of the county. [13] and redwood 56.5 per cent of the total. In the period from 1951 to 1956, which is of particular interest in this study, this pattern shifted, and by 1956 Doug- las-fir had risen to 53.0 per cent of the total, while redwood dropped to 41.3 per cent (May and Baker, 1957). The sawmill population of the county changed rapidly during the postwar pe- riod, although the total number of mills operating changed only moderately. The redwood strike of 1946 kept four of the major sawmills of the county idle for about six months, thus reducing total out- put but also encouraging the development of smaller mills. In 1946 some 93 mills produced 145 million board feet com- pared to 195 million from 47 mills in 1945. By 1951 production had risen to 586 million and there were 126 active mills in the county. Fourteen of these mills had an annual output of more than 10 million each, and together produced 50 per cent of the total output. From 1951 to 1956 expansion was centered in these medium and large mills, with the total number of mills dropping to 105 while production rose to 875 million board feet. Thirty-two mills producing more than 10 million feet annually pro- vided 73 per cent of the total output, while the smaller mills declined both in numbers and in output. Many of the mills established during this postwar period were short-lived. Of the 93 mills operating in 1946 only 22 were still operating in 1956, producing 40 per cent of the total output of that year. Moreover, of these 22 mills only 13 were still held by the same owners as in 1946. Thus 72 per cent of the lumber production in 1956 was from mills that were either new or under different own- ers than in 1946. (May, personal com- munication.) Although the number of mills operat- ing in the county was fairly stable, the number of timber operators, many of whom were independent loggers without formal affiliation with any mill, increased substantially. There were 69 registered timber operators in 1948 (the first year in which registration was required) , 139 in 1951, and 277 in 1956. The sharp contrast between the pat- tern of expanding lumber production in Mendocino County and the relative sta- bility of production nationally is ex- plained primarily by the ready avail- ability of timber in the county. To under- stand this relationship between lumber and land, it is necessary to review some of the highlights of the ownership of the forests which supported this expansion in output. It is estimated that in 1948 four-fifths of the commercial forest land of the county was privately owned and one- fifth was in public ownership (table 3). Public ownership was particularly im- portant in the pine — Douglas-fir — fir, fir, and pine types of the northeastern part of the county where such ownership (primarily federal) included 58 per cent of the commercial forest area as con- trasted with 11 per cent (primarily state) in the redwood type and 13.5 per cent (primarily federal) in the Douglas- fir type. Timber-operating and timber- holding companies and individuals owned 38 per cent of the commercial forest area. These holdings were concen- trated in the redwood type, in which pri- vate timber interests held 60 per cent of the area. Range livestock and other farm- ing companies and individuals held 32 per cent of the commercial forest area, including 58 per cent of the area in the Douglas-fir type. Individuals and com- panies interested in recreational and mis- cellaneous uses of the land held the re- maining 10 per cent of the commercial forest area. This relationship between types of ownerships and timber types is reflected also in the relationship between size and timber type (table 4) . Holdings of less than 5,000 acres included 49 per cent of [14 Table 3. Commerical Forest Land, Mendocino County, by Type of Ownership and by Timber Types, 1948 Total Timber type Type of ownership Redwood Douglas-fir Other Thousand acres Federal 158 91 8 78 36 9 114 State or local government 4 Total public ownership Timber interests 249 502 420 134 86 460 166 59 45 28 193 66 118 14 Range and farming interests 61 Recreational and miscel. interests 9 Total private ownership 1,056 685 287 84 All types 1,305 771 332 202 Source: Baker and Poli, 1951. the private commercial forest land, with 40 per cent of privately held redwood type and 70 per cent of the Douglas-fir type. In contrast, holdings of 50,000 acres and larger include 18 per cent of the private commercial forest land. These large holdings consisted almost exclu- sively of forests in the redwood type and amounted to 29 per cent of the private holdings in that type. In these statistical relationships be- tween lumber production and forest-land ownership lies much of the story of de- velopments in Mendocino County dur- ing recent years. In 1948 companies and individuals engaged in timber operations as a major enterprise held 27.5 per cent of the commercial forest land, almost en- tirely in the redwood type. The great expansion of lumber production neces- sarily had to be based in major degree on timber obtained from other types of ownerships. The development of cutting on the public forest lands was on a con- servative basis controlled by sustained- yield considerations. Much the same was Table 4. Privately Owned Commercial Forest Land, by Size of Ownership and by Timber Types, Mendocino County, 1948 Total Timber type Size of ownership in acres Redwood Douglas-fir Other Thousand acres Unclassified Less than 5,000 acres 11 522 330 193 3 277 213 192 7 205 74 1 1 40 5,000-49,999 acres 43 More than 50,000 acres All sizes 1,056 685 287 84 Source: Baker and Poli, 1951. [15] true of the large forest properties in the redwood type during this period. The brunt of the expansion was borne by other types of forest ownership. From the nature of the ownership pattern and the composition of the lumber output, it can be seen that this would be especially pro- nounced in the Douglas-fir type, al- though developments in the small and medium holdings in the redwood type were generally similar. In this process extensive forest areas considered as having little if any com- mercial timber value were brought into an active timber market. The owners characteristically had had little exped- ience in timber marketing and their pri- mary interests were generally in other fields. With the rapid changes in small mills and the widespread role of inde- pendent loggers in supplying these mills, it is clear that the market facing many of the small owners consisted to an impor- tant degree of buyers with none of the attributes of permanence. Thus the gen- eral scene in which lumber and land have been coming together into new rela- tionships in Mendocino County during recent years has been dominated by a production boom, in which one impor- tant element has been the establishment of market relationships between holders of comparatively small forest properties and operators of comparatively small and frequently temporary logging and mill- ing enterprises. Forestry and markets During 1957 and 1958 Mendocino County was affected by the national de- cline in lumber demand. Production in the county dropped, and a number of small mills closed. The importance of lumber to the economy has been brought home to the entire business community. With this realization, there has been an increasing concern about the county's timber future. To what extent will lum- ber production expand once again when demand for lumber rises? In the absence of detailed and local- ized data on timber volumes and timber growth in the county, the possibilities for the future are far from clear. It has been estimated that the ratio of cut to growth for Douglas-fir in the entire North Coast region in 1952 was 3.8 to 1 (Cali- fornia Forest and Range Experiment Station, 1954). By 1956 this region may well have been cutting Douglas-fir some 4.5 times as fast as it is growing it. With the different ownership structure in red- wood being reflected in more conserva- tive cutting policies, the ratio of cut to growth for this species in 1956 was per- haps something more than 2.5 to 1. Not all stands are being cut this heavily, which means that the more readily avail- able stands are being reduced more rap- idly than these estimates suggest. The outcome of this situation will de- pend upon numerous and diverse factors which can be grouped under the general headings of forest management and wood utilization. In terms of the forest econ- omy of the county, the two are insep- arable, with developments in one facili- tating and depending upon developments in the other. Organizationally, however, much of the forest land of Mendocino County is under separate control from that of the wood utilization plant. As long as this situation persists, the tim- ber market will play a fundamental role in developments in the county. It is only through this market that the forces of demand can reach the nonintegrated timber owner and affect his management decisions. Similarly, it is only through the market that the nonintegrated wood- utilization plants can obtain raw mate- rials for processing. Thus an effective market is essential to an effective forest economy in the county. For either private or public planning in the area's forest economy there is need for information concerning the current [16] structure of land ownership, its stability, and its direction of change in recent years. There is also need for a clear understanding of the workings of the timber market of the area and its effec- tiveness from the standpoints of the land- owners and of the timber industries. The balance of this report is devoted to these two questions. THE CHANGING STATUS OF LAND OWNERSHIP Basis of the study An intensive study of land ownership involving a 100 per cent coverage of the area was carried out in northern Mendo- cino County in 1944 (Poli and Griffith, 1948). On the basis of this complete survey a method for sampling land ownership was developed (Hasel and Poli, 1949) and later applied to the en- tire county (Baker and Poli, 1951) as a part of the Forest Survey conducted by the California Forest and Range Experi- ment Station, U. S. Forest Service. Essen- tially, the method superimposed a grid of east-west lines with a two-mile spacing between lines on maps of the cover types and the ownership plats in the county assessor's office. Total holdings for each ownership intercepted were then deter- mined by consulting the records in the tax collector's office. The total number of ownerships, area of commercial for- est land, and similar matters were esti- mated from this sample by the use of various statistically developed expansion factors. The field work for the county- wide study was carried out in 1947 and the first part of 1948, but all data were listed under the 1948 date in the report. The results of this study included esti- mates both for all land and for commer- cial forest land of the number and area of ownerships by type of ownership and, for the private land, by size class of ownership. The present study, undertaken in the fall of 1956, initially intended to use the working papers of the Forest Survey study as the basis for developing an ad- dress list of a sample of forest owners. In checking this material against records in the county assessor's office, it become apparent that major changes in owner- ship had occurred during the period of approximately 10 years. Thus it was necessary to make a complete resurvey of land ownership in the county. The ownership survey made during 1957 was based on the method devel- oped for the Forest Survey with minor modifications and repeated exactly the same sample lines used in the earlier study. 3 Two points on procedure should be made clear: First, every property larger than 2,600 acres was included in the survey, but ownership data for prop- erties less than 2,600 acres were esti- mates based on a sample. It is estimated that the survey included 25 per cent of the total number of ownerships of pri- vate rural land in the county, but 83 per cent of the total area of such land. Sec- ond, all information concerning individ- ual ownerships used in this study is based on public records in the county offices. All private rural land in the county was sampled in this 1957 ownership sur- vey. However, time did not permit sep- arate sampling of forest-land ownership such as was carried out in the 1948 sur- vey. Thus it is possible only to approxi- mate the areas of commercial forest land by types of ownership and size classes in 1957, under the assumption that within each classification the ratio of commer- cial forest land area to total land area 3 A full discussion of methods and special problems in comparing the two studies has been prepared by Casamajor (1958). Copies of this report may be borrowed from the School of Forestry, University of California, Berkeley. 17 was the same as in 1948. Since some selectivity is presumably involved in the transfer of particular areas from one ownership class to another, this assump- tion may not be completely correct. How- ever, these approximations are believed usable for bringing out the general pat- tern of change in forest ownership which has taken place in the county. Land ownership in 1957 The 2,246,000 acres of land in Mendo- cino County, including some 1,305,000 acres of commercial forest land, are pri- marily in private ownership (table 5). According to the 1948 survey, federal, state, county, and municipal lands in- cluded 20.6 per cent of the area, with private holdings making up the re- mainder. This ratio of public to private ownership has remained the same up to 1957 when the present survey showed the area in private ownership to be very nearly equal to that reported 10 years previously. The balance of this discusison is lim- ited to the privately owned rural land in the county. It is estimated that the 1.8 million acres of such land were held in 3,917 separate ownerships in 1957. By size of ownership, the land was distrib- uted as shown in Table A below. Distribution of private rural land. As would be expected, the greater part of the ownerships is concentrated in the small size classes (appendix table 3). However, the 3,050 ownerships of less than 180 acres held less than 10 per cent of the private rural land (appendix table 4) . When combined with 815 other ownerships of less than 5,000 acres, small ownerships included more than half the land area — 54 per cent. There were 52 medium- and large-size owner- ships; they constituted only 1.5 per cent of the ownerships, yet held 46 per cent of the private rural land. Within this group, two ownerships of more than 50,000 acres held 13 per cent of the total private rural land area. Distribution of private commer- cial forest land. As shown in the right column of Table A below, ownership of commercial forest land differed in important aspects from that of all rural land. Large ownerships of more than 50,000 acres held a larger proportion of the commercial forest area than they did of all rural land, while the small-size properties of less than 5,000 acres held a smaller proportion. The small owner- ships of less than 5,000 acres included slightly less than half the commercial forest land, while medium- and large- size ownerships held slightly more than half. The ratio of commercial forest area to all land increases with size of ownership for the classes larger than 5,000 acres, as shown in the following table : Per cent commercial forest land is to Size of ownership total land area Less than 180 acres 57 180-4,999 acres 52 5,000-49,999 acres 61 More than 50,000 acres 98 Table A Per cent of total number of ownerships Less than 180 acres 77.7 180-4,999 acres \ 20.8 5,000-49,999 acres 1.4 More than 50,000 acres 0.1 100.0 Per cent of Per cent of private rural private commercial land area forest area 9.7 9 44.5 38 32.4 32 13.4 21 100.0 100 [18] c o u * is o g L. U ■c 8. s >• £ § O -J o 3 o H o 0) Ph oo o) co t> © t> o CO CO co d CM ci tr- O d o tH PI ,„ H •^ rH ^ t> CN •a js O *tf CN CD O T-l r- CN 00 T-l CN 1 T3 Pi w a> M o is '3 M a> B B o O o O Ph t-J Ttf lO «* d o4 o tH tH T-l tH q T-l od lO -a § M H co o w CT> tH lO 00 t-I CD C5 CN CO lO o^ T-T lO o CO T-T w w o W a w 1 1 g* Ph P 1 HH i o 1 <*H c Eh 15 1 TJ > o U (V -u c3 W i Ph s Ph o u l-H PP Ph hh <3 Eh o Ph s Ph O w Eh < P3 Ph P < <: Eh o Eh ««H •^ PJ MM Tig 31 9s For smaller classes, the ratio varies but is generally lower than for medium and large ownerships. These relationships ac- count for the fact that although small ownerships hold more than half of the private rural land, they hold less than half of the commercial forest land in the county. Type of ownership shows a pattern related to that of size of ownership. Table B below shows how the private rural ownerships in the county are dis- tributed among different types of owner- ships. (See page 10, for definitions of types.) As this table suggests, there are maj or differences in the size of ownerships characteristic of the various ownership types. Ownerships held primarily for miscellaneous purposes are generally small — none is larger than 2,600 acres, and 46 per cent are smaller than 180 acres (appendix table 4) . These miscellaneous interests hold only 11 per cent of the commercial forest area, but make up 61 per cent of the total ownerships. Simi- larly, the area held by farming interests other than range-livestock is mostly in small properties of less than 2,600 acres. In contrast, the area held by range-live- stock interests is characteristically in holdings ranging from 2,600 acres to 20,000 acres. For the whole county, these range-livestock interests hold 75 per cent of all land in ownerships rang- ing from 2,600 to 20,000 acres. These va- rious relationships are shown in the table at bottom of this page. The land held by timber interests shows the greatest degree of concentra- tion in large holdings (Table C) . Within the group, there is considerable difference in the size of timber operators and timber holders (Table D, page 21). The former are generally large, and hold 90 per cent of the rural land in private ownerships of more than 20,000 acres and 86 per cent of all land held by timber interests (appendix table 4) . Location of land owners. In this study the address of each ownership as listed in the tax collector's office was re- corded for all ownerships included in the sample. An address within the county does not necessarily mean that the prop- erty is occupied. The general pattern of private rural land ownership by address of owners shows that slightly more than one-third of the ownerships, representing slightly more than one-third of the pri- vate rural land area, have owners with an address outside the county (appendix Table B Ownership primarily p er cent of interested in: total ownerships Timber 11.4 Range-livestock 13.8 Other farming 13.8 Miscellaneous purposes 61.0 100.0 Per cent of private rural land 38.7 43.7 5.9 11.7 100.0 Per cent of private commercial forest area 56 29 4 11 100 Table C Size of ownership Less than 2,600 acres. . . 2,600-19,999 acres .... More than 20,000 acres. Timbi 100.0 Range- livestock Other farming Per cent of rural land 100 100 Miscellaneous purposes 19.5 34 96 100 22.0 60 4 58.5 6 100 [20 Table D Less than 2,600 acres . . 2,600-19,999 acres More than 20,000 acres Timber-operating Timb er-hc dding Per cent 11 21 68 72 28 100 100 table 5) . More than half of these owners have addresses in the San Francisco Bay area, which includes one-fifth of the total owners of rural private land in Mendocino County. Generally there is a striking parallelism in the distribution of number of owners and of area owned. The average size of ownerships for owners with addresses in the county is 467 acres, and that for owners outside the county 463 acres. The most notable divergence from this pattern is for ownerships in which the owner's address is outside of California. Such ownerships average 1,310 acres in size, but their number is too small to be of any par- ticular significance. There is, however, considerable varia- tion among the types of ownership in the proportion of owners with addresses inside the county. It is estimated that 557 recreational property owners have ad- dresses outside the county compared to 211 within the county, that 6 range live- stock farming companies have addresses outside compared to 2 within the county, that 131 timber holding individuals have addresses outside compared to 79 within the county, and that all 16 timber hold- ing companies have addresses outside the county. All other ownership types recog- nized in the study have a predominance of owners with addresses inside the county. Change in land ownership 1948-1957 During the period from 1945 to 1957 the population of Mendocino County grew from 34,300 to 52,230, an increase of 52 per cent as compared to 44 per cent for California. This population increase, together with the tremendous expansion in lumber production during this decade, was bound to have a great impact on the ownership of land. The 1948 Forest Survey data and the present study provide a basis for determining the effects of this decade of change on land ownership in the county. As noted pre- viously, no significant changes occurred in public-land ownership during this period in Mendocino County, so the full impact of change was concentrated on the privately owned land. This discussion will be limited to the privately owned rural land of the county. Size of ownership. As shown in fig- ure 3, no major shifts in the relative dis- tribution of the rural land among the in- dividual size of ownership classes oc- curred during the period, but the cumu- lative effects are of some importance. The private rural land in ownerships of less than 2,600 acres declined from 45.7 per cent of the total area in 1948 to 39.8 per cent in 1957. Some but not all the size classes larger than 2,600 acres showed increases. A generally similar pattern is shown for commercial forest land. In broad terms, then, rural land tended to move from smaller toward larger ownerships. A more detailed studv of the shifts will clarify the full significance of Thus the number of ownerships larger the complex pattern of the shifts which occurred (see appendix table 7). During the period from 1948 to 1957 the estimated number of private rural land ownerships increased from 3,233 to 3,917 — a net increase of 684 ownerships. However, the number of ownerships of less than 180 acres increased by 712. [21] than 180 acres actually decreased. This 30.6 per cent increase in the number of ownerships of less than 180 acres oc- curred at the same time that the total area of such ownerships was decreasing by 14 per cent. Thus the average size of holding in the less-than-180-acres class decreased by 34 per cent from 88 to 58 acres. This increasing fragmentation of the one-tenth of the private rural land of the county in the smallest-size class is one of the most striking developments in land ownership in the decade, and has impli- cations for the future management of this area (see page 6) . Although there was a slight overall PRIVATE RURAL LAND SIZE CLASS IN ACRES 1-179 1 80-699 700-2,599 2,600-4,999 5,000-19,999 20,000-49,000 50,000 and over 1948 1957 .I..1I www-^w 10 20 Per cent of total 30 Fig. 3. Comparison of private ownership, [22] decrease in the number of ownerships larger than 180 acres, in detail the pat- tern was erratic, with increases in some classes and decreases in others. Along with this went a shift of land area, which in general was toward larger-size classes but which in detail involved concentra- tion in several classes. This is shown in figure 4. A particularly striking relation- ship in this pattern is the pronounced decline in the area of holdings between 30,000 and 49,999 acres, with equally pronounced increases in the areas of the next smaller and next larger size classes. As these relationships suggest, any tendency for the large to get larger in PRIVATE COMMERCIAL FOREST LAND SIZE CLASS IN ACRES 1-179 180-699 700-2,599 2,600-4,999 5,000-19,999 20,000-49,000 50,000 and over 1948 1957 i :::%v:v:v>:v:::::::-: ;.y.;.vy..v.y.v.v.v/.y/.y/.v.v/.v.v.;.v.v.v.v.v WMMM i i _l 10 20 Per cent of total 30 Mendocino County, by size of ownership, 1948 and 1957. [23] Mendocino County is by no means uni- versal. This is brought out clearly by ranking the ownerships in order of size. The two largest ownerships in 1957 were also the two largest in 1948, and they increased in combined acreage by 24 per cent during the decade. However, the ownerships which ranked from third through eighth in 1957 were consistently smaller than their counterparts in 1948, with their aggregate acreage being 13 per cent less. From the ninth largest ownership to approximately the 760th the 1957 ownerships are larger than those in 1948. In each of these years the 760th ranking ownership was about 220 acres in size. Ownerships smaller than the 760th rank were smaller in 1957 than their 1948 counterparts. Type of ownership changed more pronouncedly during the decade than size (appendix table 8). The dominant pat- tern shows a shift from other types of ownership into the ownerships of tim- ber-operating companies and individuals. The area owned by timber operators in- creased from 21 per cent of the total private rural land in 1948 to 33 per cent in 1957, while their holdings of private commercial forest land expanded from one-third of the total to nearly one-half. The area held in each of the other types of ownership declined, both in all rural land and in commercial forest land, with the decline in each instance being ap- preciable. Timber interests (timber hold- ers plus operators) increased their share of the private rural land in the county from 30 per cent to nearly 39 per cent and their share of private commercial forest land from 47 per cent to about 56 per cent. The greatest part of the increase in number of ownerships came in the other classified owner type, which increased from 1,026 to 1,604. Recreational-prop- erty owners increased from 637 to 768. Timber operators showed the greatest relative increase in numbers, with tim- ber-operating companies increasing from SIZE CLASS IN ACRES 1-179 180-379 380-699 700-1,299 1,300-2,599 2,600-4,999 5,000-9,999 10,000-19,999 20,000-29,999 30,000-49,999 50,000 and over -90 -60 30 +30 60 90 Thousand acres Fig. 4. Change in area of rural private land, Mendocino County, by size of ownership classes, 1948-1957. [24] 29 to 69 ownerships and timber-operat- ing individuals from 78 to 150 owner- ships. Farmers other than range-livestock farmers showed the greatest decrease, dropping from 669 to 541. Timber-hold- ing companies showed a pronounced relative decline with a drop from 26 to 16 ownerships. The other types remained fairly stable in numbers. With these changes in areas and num- ber of ownerships by types, there were appreciable changes in the average size of holdings by types of owners as shown in appendix table 8. Stability of ownership is an impor- tant factor in the management of land, es- pecially where it concerns long-term pro- grams such as timber growing. Since the present ownership study repeated the sample used in the Forest Survey study, the two studies give a direct measure- ment of the net change in ownership dur- ing the decade 1948-1957. 4 The change in ownership status of pri- vate rural land during the decade, on all land types combined, is summarized here: Number Area owned of Owners in 1957 Per cent Per cent Same Owners Same Acreage 19.4 10.6 Same Owners Smaller Acreage 8.1 7.9 Same Owners Larger Acreage 5.9 33.5 New Owners to the Property 66.6 48.0 Total 100.0 100.0 As this table indicates, two-thirds of the 1957 owners, with nearly half the private rural land, were new since 1948. About 6 per cent of the owners, with one- 4 Properties with more than one recorded owner were considered in changed ownership if at least 50 per cent of the owners had changed. In the case of joint ownership by husband and wife, ownership reverting to one or the other due to death or divorce was not treated as a change in ownership. Transfer of ownership to children was considered a change. third of land, were the same as in 1948, but had increased the size of their hold- ings. Another 8 per cent of the owners, with about 8 per cent of the land, were the same as 10 years before, but had reduced the size of their holdings. Only one-fifth of the ownerships, with one- tenth of the private rural land, remained completely unchanged during this pe- riod. Since these relationships reflect only the net change from 1948 to 1957, the total amount of change must have been even greater. It is evident that rural land ownership in Mendocino County was highly unstable during the decade studied. There were striking differences in the degree and type of change shown by the various types of ownership in the county (appendix table 10). About 11 per cent of the number of timber-operating com- panies, with nearly half of the land in such ownerships, had remained the same since 1948, but their acreage had in- creased, while 83 per cent of these owner- ships, with slightly more than half the land, were new in 1957. Thus the hold- ings typical of the new timber-operating companies in the county were very much smaller than those of the companies con- tinuing in land ownership. Three-fourths of the ownerships held by timber holders and timber-operating individuals, includ- ing 70 per cent of the area of such hold- ings, was in the hands of new owners in 1957. About 20 per cent of the ownerships held by range-livestock interests, with 38 per cent of the land in such holdings, were the same ownerships as previously but with larger acreages, while 46 per cent of these ownerships, with another 39 per cent of the land, were new owners. Other farmers showed more stability, with one-third of the ownerships, and nearly 30 per cent of the land, represent- ing the same owners with the same acre- age. However, 40 per cent of these own- ers with 40 per cent of the land repre- sented new owners. [25 In the case of properties held for mis- cellaneous uses, three-fourths of the num- ber of ownerships, with 60 per cent of the area, represented new owners. Nearly one-fifth of such ownerships, however, with almost one-fourth of the area were the same owners with the same acreage as in 1948. In terms of size of ownership (ap- pendix table 9), nearly 35 per cent of the number of all private rural owner- ships in the county in 1957 consisted of new owners with holdings of less than 40 acres. The pronounced instability of such holdings is indicated by the fact that 80 per cent of all ownerships in this size class, with three-fourths of the area of such land, were in the hands of new owners. Somewhat surprisingly, owner- ships in the size class 40 to 179 acres showed the greatest stability, with 30 per cent of the number and one-third of the area being in the same ownerships with the same acreages as in 1948. However, new owners held 60 per cent of the num- ber and area of these ownerships. In properties larger than 2,600 acres, the proportion of numbers and area rep- resented by the same owners with the same acreage fell off rapidly, and all ownerships larger than 20,000 acres in 1957 were held either by the same owners with larger acreages or by new owners to the property. Against this background of a rapidly changing ownership pattern the timber economy and market have developed in Mendocino County. The following sec- tion focuses attention on the marketing of forest products. WOODLAND MARKETING PRACTICES Timber marketing Timber marketing in this report re- fers to the selling and buying of stump- age (the right to cut standing timber) or logs, the chief concern being the ex- change of these products between small forest owners and timber buyers. Sales involving title to both land and timber are not included, although there have been many such sales in Mendocino County in recent years. This study is con- cerned with the sale of timber as the product of the land, not with the sale of the entire enterprise. Marketing has been well described as "the focal point of the entire process of forestry" (Duerr, 1949 ). 5 Hence it is es- 5 Duerr writes that ". . . In marketing, the products of the forest are released for consump- tion. The aims of forest policy and the work of forest management are culminated and made to bear fruit. It is the character of the market, as a reflection of consumer's demands, that shapes forest-management policies; and it is the effi- ciency of the market as a reflector of those de- mands that determines how well the goal of optimum benefit may be seen by the forest manager as an individual negotiator in the markrt " p. 162. sential that market relationships and marketing practices operate to result in adequate returns to the productive efforts of forest owners and the timber buyers. In the case of small-woodland owners in Mendocino County, marketing assumes an even more prominent role, as the sale of timber is ordinarily the only act of forest management. Because of this syn- thesis of management and marketing, the impact of established marketing customs on silviculture and the forest is of par- ticular interest and importance. And in a market situation where buyers dominate the small primary producers, buyer prac- tices and policy are crucial elements in determining the position of small wood- lands in the total forest-resource picture. The existence of major imperfections in timber-marketing practices may favor one group or the other over short pe- riods, but over the longer period in which timber becomes a material pro- duced by economic activity rather than an unplanned product of nature, the mar- ket becomes a two-way street. Efficient markets then work to the benefit of buy- [26] ers and sellers and the economy as a whole. In the past, timber marketed by small owners in Mendocino County has largely been an untended, unplanned product, the ownership of which was incidental to the main objective of holding land. This is partly responsible for a rather general lack of interest in and knowledge of timber and marketing, and the market- ing pattern which has developed in re- sponse to the needs of a rapidly expand- ing industry has reflected this attitude. The extent to which this pattern has pro- vided — and will provide — equitable re- turns to woodland owners, and the direct effect it has had on the forest itself, will be a major factor in determining the extent to which timber is intentionally grown and the amount that can be regu- larly harvested. Research methods To obtain information concerning woodland-marketing practices in Men- docino County, detailed field interviews were conducted with a representative sample of 126 owners of woodland prop- erties less than 5,000 acres in size. (See appendix table 11 for sampling details.) Foresters and public officials were also consulted. These interviews were con- ducted over the one-year period extend- ing from spring 1957 to the spring of 1958. Mail questionnaires were sent to those few owners whose residence made personal contact impractical. For each ownership included in the sample, data were collected on the char- acter of the forest and on the sales of timber for the period 1950-1957. Timber sales were discused in detail with each of the 58 owners who had made a sale. Information was recorded on question- naires for the following: general sale characteristics including year of sale, volumes and prices of products sold, point of sale, sale experience, and reason for making sale; marketing practices including buyer selection, price determi- nation, contractual arrangements, method of payment, product measurement, har- vesting method, and marketing assist- ance; and seller attitudes. Owners who had not made sales were questioned about their contact with the market and their reasons for not marketing timber. Although the 58 owners reported a total of 78 sales, data were obtained on only 61 sales. Of these, not all questions were answered in each case. Conse- quently, the number of sales used in the analysis varies with the survey question. The number of sample sales used is noted where appropriate. Sales characteristics Sales activity on small woodlands has increased under the stimulus of the dramatic sixfold expansion of lumber production in Mendocino County since 1946. New mills and an increased num- ber of timber buyers supported this growth by drawing heavily upon timber in small ownerships. Thus, of the 126 owners interviewed, 58, or nearly one- half, made a total of 78 separate sales of stumpage or logs in the period from 1950 to early 1957. Size of holdings. The 78 sales re- ported were distributed as follows: Per cent Per cent of Size class of all sales group selling 0-179 44 33 180-699 36 69 700-4,999 20 75 Total 100 As the center column shows, four- fifths of the sales were made by owners of properties less than 700 acres in size. The study revealed (right column, above) that only one-third of the owners in the smallest-size class participated in the sales, but that more than two-thirds of the 180-699 acre class and three- fourths of the largest-size class made sales during the study period. Type of holdings. As the next table indicates, agricultural interests were the [27 most active sellers. The findings establish the miscellaneous interests as a group of comparative importance in the mar- keting picture. Timber interests made only 22 per cent of the sales but half of all owners in this type-class participated in the sales. Percentage of owners in Per cent of each class Owner type all sales selling timber Miscellaneous 37 38 Timber 22 50 Agriculture 41 88 Total 100 Location of residence of the owners had little effect on timber-marketing ac- tivity, as shown in the table below. Dis- tance from the property apparently did not effectively interfere with the owners' opportunities to market timber. As will be seen later, these opportunities came mainly as the result of buyer initiative. Percentage of owners in Per cent of each class Residence all sales selling timber On property 36 48 In the county but not on property 28 52 Outside of county 36 46 Total 100 Previous marketing experience is an important factor in timber marketing because of the special skills and knowl- edge required. However, nearly two- thirds of 59 sales studied were made by owners without such experience. Per cent of owners with Previous sale Per cent of logging experience sales experience None 61 17 One previous sale 13"^ Two or more W39 35 previous sales 26 J Total 100 24 [28 In part, this lack of experience reflects the recent development of the economic importance of much of the forest area, particularly the Douglas-fir type, in the county. With a product marketable only in the last few years, owners have had little previous opportunity or incentive to become familiar with timber selling. Another reason for this inexperience in timber marketing is the fact that, com- monly, timber is regarded as an occa- sional product rather than the main pur- pose of ownership; woodlands, there- fore, receive only a small portion of the owners' time and attention. Thus market- ing may readily be regarded in an off- hand manner. This may start a vicious cycle, as inexperience tends to lead to poor marketing practices and hence to low returns from woodland management ; which, in turn, leads to even less interest in the woodland possibilities. Point of sale was usually at the stump. Owners were seldom in a position to harvest the timber themselves. Be- cause harvests were infrequent and cuts small, few owned the necessary equip- ment and possessed the necessary tech- nical skills. Even if an owner does have the equipment, he may evaluate other uses as more rewarding than logging. Rarely, however, does an owner have equipment, such as a tractor and a truck, heavy enough to handle the size of tim- ber cut in the county. Another important factor is that other occupational interests limit the time which can be allocated to an occasional timber sale, thus precluding owner log- ging. These various factors dictate the kind of marketing arrangements that small-woodland owners find practical and convenient. Of the sales studied, 87 per cent were stumpage sales in which the buyer did the cutting; in the remaining 13 per cent logs were sold at the mill. The majority of these log sales were made by owners classed as timber operators. ] Point of sale Per cent of sales On the stump 87 Roadside At the mill 13 Total 100 The prevalence of sales of standing timber emphasizes the important position of the buyer as an agent in the manage- ment of these timber stands. Both the marketing and the logging practices of timber buyers in Mendocino County have a major impact on the private, small- forest resource. Size of sales. The volume of each sale was usually small — about half of the sales totaled 500,000 board feet or less. Analysis of 36 small woodland sales showed harvested volumes ranging from as little as 3,000 board feet to 8 million board feet. Most sales, however, ranged from just under 100,000 up to 900,000 board feet. The average volume sold was 1,133,000 board feet, with one-fourth of the sales exceeding this figure. Size of sale — in Per cent of sales thousand board feet Less than 500 50 600-900 8 More than 1,000 42 Total 100 In spite of the many small sales, gross receipts from the sale of timber were often comparatively large. For some owners income from the sale of standing timber constituted a substantial portion of total annual income. Study of 41 sales showed total gross income was $2,000 or more in two-thirds of the sales. A third were for total payments of from SI 0,000 to $60,000, while another third were for sums less than $2,000. These 41 sales averaged $9,308 per sale, and ranged from $49.50 to $60,000 (appendix table 12). These findings suggest that even though small sales are characteristic of small woodland properties, receipts from even an occasional timber sale are often sufficiently large to justify the seller spending considerable time on timber marketing and possibly employing out- side technical assistance. Reasons for marketing woodland products often indicate attitudes and interest in management and marketing. The motivation of an owner to sell tim- ber can be expected to influence his mar- keting practices and arrangements. An owner in need of emergency cash, for example, may be unable to "shop around" for price, and would be inclined to take the first opportunity to sell on a lump-sum basis. Reasons for selling may be based pri- marily on financial considerations or on considerations of the woodland itself, such as stand maturity, salvage after fire, or timber damaged by insects or diseases. Of 59 sales studied, financial considera- tions were found to be principal reasons why owners sold timber, as shown here. Primary reason for making sale Per cent of sales Addition to regular income 54 Emergency cash needs 14 High current prices 7 Tax burden 2 Timber mature 3 Salvage cut 5 Land clearing 8 Other 7 Total 100 The desire for additional income or the need for cash to meet emergencv ex- penses together account for more than two-thirds of all reasons given for mar- keting timber. Adding high current prices and tax burden, three-quarters of the reasons were based on financial consid- erations. The tax burden as a single fac- tor, however, was apparently unimpor- tant during the period of this study. Sil- vicultural considerations of the forest itself were seldom given as reasons for selling. [29 The need for additional income as a principal motivating factor in small- woodland sales deserves further com- ment. Timber sales on small forests nor- mally occur at irregular intervals and hence few owners count on them as a regular source of planned income. In fact, most owners did not consider tim- ber as a crop and sold it as a result of an accidental opportunity rather than as a preplanned event. The comment made by several owners that their timber sale was a "windfall" financially reflects this aspect of small-woodland sales. Some owners were unaware they had merchant- able timber until they received an offer from a buyer. Clearing forest land for alternative land uses, principally grazing, was the third most important reason prompting woodland sales. The fact that 8 per cent of the sales in the study were made for this purpose suggests that withdrawal of forest land from timber production is a significant factor affecting the future status of the forest resource. Proximity to sawmill log mar- kets, a locational advantage of consid- erable importance, was characteristic of most ownerships. Of 90 properties for which data were obtained, nearly 60 per cent had at least one sawmill within a 5-mile travel distance and at least two mills within 10 miles. Eighty-five per rent had at least one mill within 10 miles. In addition, half the properties enjoyed a further advantage in having two com- peting mills at just about the same dis- tance away. Nearness to sawmill log markets and an established road system to reach them add considerably to small- woodland timber values. Distance in miles to nearest sawmill (average distance 5.8 mi 0-5 lies) Per cent of properties . .59 6-10 26 11-15 . .12 16-20 . 3 Total .... 100 Distance in miles to second nearest sawmill Per cent oj (average distance 10.4 miles) properties 5 30 6-10 28 11-15 20 16-20 13 21-25 6 26-30 2 31-35 1 Total 100 Very often the forest owner or timber buyer chose to bypass the nearest mill or mills to sell the logs elsewhere. In nearly one-half the sales analyzed logs were transported to mills beyond the nearest mill. In a third of the sales, the logs were hauled to mills beyond the sec- ond nearest mill. Location of mill receiving logs Per cent of sales Nearest mill 55 Second nearest mill 14 A mill further away 31 Total 100 Market organization. As standing timber is the product commonly sold by small owners, most sellers dealt with in- dependent operators who in turn sold the logs at a local mill. Thus of 35 timber sales for which such information was obtained, two-thirds were made to inde- pendent operators. In the remaining sales owners dealt with a mill operator who also conducted logging operations or else contracted to have the logging done by an independent operator. In two- thirds of the sales to mill operators the purchasing mill had a production of less than 15 million board feet annually. Marketing practices The structure of woodland mar- keting in Mendocino County may be de- scribed as disorganized. Sales practices vary widely and market transactions oc- cur at scattered locations under dissimi- lar circumstances. Products vary in quality and quantity and are frequently measured by different methods. Tracts of [30] timber vary in value, depending on loca- Personal friendship, the most fre- tion, character, and ease of logging. Gen- quently given reason for selecting the eral impressions as to price levels are buyer, reflects the seller's desire to deal fairly common among sellers, but de- with a buyer in whom he has confidence, tailed knowledge of comparable sales Although "selection" infers alternative useful for adjusting average prices to re- choices, many sellers who gave personal fleet value of individual timber stands is friendship as the reason for choosing a practically nonexistent. Buyers often particular buyer actually knew only the treat each purchase as an isolated case, one buyer. In fact, in another one-fourth with the objective of negotiating the sale of the sales owners indicated that the for the lowest price. All these factors buyer was the "only buyer known." work against the establishment of com- Taken together, nonmonetary factors in- mon sale methods and of meaningful and eluding personal friendship, only buyer generally known market prices. known, good reputation of the buyer, and Another feature is the small-woodland other reasons, determined buyer selec- owner's general unfamiliarity with mar- tion in 71 per cent of the sales. These keting methods and his lack of contact findings indicate that small-woodland with timber buyers. Also, ordinarily owners commonly made sales under con- only a single buyer, or at the most two ditions of limited market contact, or possibly three, is interested in any one Reliance on factors other than price owner's timber at a particular time. Tim- can of course be highly desirable in ber is usually sold after negotiating with woodland marketing. The sale of stand- only one buyer. m g timber involves much more than a Most timber sales are initiated by the simple exchange of a commodity. In- buyer. Through him the market forces stead, the buyer enters the property of of supply and demand are transmitted to the seller and carries out the logging op- woodland owners. The owner, as a seller, orations. The effect of the logging on the is essentially a passive marketing agent residual stand and the balance of the whose fortunes are inordinately con- property and the accuracy of scaling pro- nected with the opportunities offered by cedures can have a great impact on the the buyer. net benefits of the sale to the landowner. Selection of a competent, cooperative, The selection of buyers was prin- and reliaWe buyer is thus of the greatest cipally determined by the extent and na- importance . However, the nonmonetary ture of the woodland owner's market con- reasong for buyer selection in Mendo . tacts and by a variety of nonmonetary dno Co common l y reflect m0 re or considerations. Prominent among these legg accidental consid erations rather than was an existing personal relationship be- thor h appraisa l of buyer qualifica- tween buyer and seller, the distribution , P , ' „ , , tions. folloL W stum P a 8 e sales was as Although use of competitive bidding would presumably raise the purchase Reason for selecting price, there was a conspicuous absence theb ^ er Per cent of sales q{ such bidding as the basis f or buver Personal friendship 28 selection during the period of study. Only buyer known 26 . . . . . . ,. £ Best offer (money and services) ... 23 A g ain > this 1S an important indicator of Good reputation 11 owner attitudes toward timber. The ef- Would pay seller's price 6 fective use of competitive bidding re- Highest bidder quires careful advance preparation of the sale. Obtaining bids from several buyers X ota l 100 requires the expenditure of time and [31] money. Information on the size of the The table below illustrates the relative sale area and on the volume, species, and importance of price-determining meth- condition of the timber to be sold must ods reported in 55 timber sales : be collected and bids invited through ad- Method of price vertising or personal contact. Prospective determination Per cent of sales bidders must be shown the sale area, and Buyer's offer 44 bids must be received. Furthermore, pro- (°^ of ™ e buyer) ... (20) . . r j . . r .i (highest offer, money and vision for adequate supervision ot the ° , (2 &) sale becomes of great importance, since Negotiated price 32 the buyer is selected solely on price con- Seller's asking price 22 siderations. In short, competitive bidding Other 2 requires more time and effort on the part 7~T Z 1 , „ , „ !, t Total 100 of the seller than most small-woodland owners have been willing to devote to In the absence of competitive bidding, marketing. negotiation with the buyer was probably The practice of selecting the buyer on the seller's most effective means of ob- the basis of "best offer, money and serv- taining fair market price for his timber, ices," which also represented nearly one- Price determination by negotiation, ac- fourth of the sales, may be considered a counting for one-third of all sales, in- partial substitute for competitive bid- volved bargaining between buyer and ding. Selection on best offer, as distin- seller. To arrive at fair market price, guished from bidding, meant receiving both buyer and seller should be in full a number of unsolicited offers to buy possession of all facts pertinent to the over a period of time. The offer was sale. Thus the actual price finally agreed often composed of two parts: price and upon may hinge on how little or how services, which include road building, much the woodland owner knows about road repair or maintenance, installation the product and market, of culverts, ditching, grading, and slash Timber-sale contracts written by disposal. Some sellers were as interested either the buyer or seller were used in in having a road built as a part of the two-thirds of all sales in the survey, with transaction as they were in the timber oral sale agreements comprising most of sale, taking a lower price in exchange the remainder. One-half the written con- for this service. For others price alone tracts were provided by the seller and the was the main concern. Rarely were more remaining half by the buyer, than three offers received. Often they oc- A timber-sale contract is an important curred over time periods sufficiently long feature of a stumpage sale. As a legal that changing market conditions invali- instrument, it establishes the rights, lia- dated comparing one price offer with bilities, and performance requirements another. of both buyer and seller. Such a contract Methods of determining price as- can also be a tool in forest management, sume especial importance in a market as specific provisions can be made cov- characterized by lack of competitive bid- ering method of logging, fire prevention, ding and wide variations in the condi- selection of trees to be cut, and slash tions surrounding particular sales. Sev- disposal. However, experience in the eral factors tended to establish pricing county shows that a written contract pro- methods: lack of price knowledge amons; vides little or no protection to the seller sellers; passiveness of sellers as market- unless it is prepared with adequate ing agents; and the dominant market knowledge of legal and forestry consid- position of timber buyers, who have a erations and unless there is effective su- clearer idea of timber values. pervision of the sale. [32] The legal and physical aspects of mar- keting timber apparently were casually regarded by most sellers. Few were fa- miliar with timber contracts. Still fewer sought legal counsel or professional for- estry advice. Examination of 200 timber- sale contracts recorded in the Mendocino County Courthouse revealed that most contracts simply stated the price, method of payment (lump sum or scale), loca- tion of the property, and the kind of timber to be sold (for example, "all merchantable redwood"). These con- tracts are best characterized by what they failed to include. Important sale aspects not covered in most timber-sale contracts included the following: Definition of timber to be cut and utilization standards. Scaling method to be used. Time limit for removal of purchased timber. Liability for taxes between time of purchase and time of cutting. Time at which title to the timber passes from the seller to the buyer. Assignability of the contract. Liability for loss in event of fire or other catastrophe. Responsibility for slash disposal. Financial loss and dissatisfaction with timber buyers and timber growing often results from poorly written sale con- tracts. In one-fourth of the sales with written contracts owners felt the buyer had not complied with their agreement. A third felt the logger had done a poor job. Often contract provisions actually did not cover the item the seller felt the buyer had not complied with. One owner, perturbed over slash disposal, said: "No, it wasn't in the contract, but we talked about it and I thought he was going to take care of it." Complaints over buyer nonperformance included the following: Failure of the buyer to clean up the slash. Failure to provide scale tickets in sup- port of payments. Too heavy cutting of the stand. Failure to build a road agreed upon. High-grading of the stand. Two case examples serve to illustrate the difficulties that sometimes arise from poorly written contracts. One owner agreed to a buyer's contract in which he sold 2.5 million board feet of Douglas- fir and pine timber for a lump-sum pay- ment based on the buyer's cruise. The sale was made in 1951 for an average price of $3.19 per thousand board feet. According to contract the buyer had a 10-year period in which to cut the tim- ber, but verbally told the seller the timber would be cut in a year. Six years later the timber had not yet been cut. In the interval prices had tripled and the con- tract had been resold twice. Assignment required the seller's written permission, which had been obtained both times under the guise of a "release for log- ging" that the owner thought was nec- essary before logging could begin. Thinking the timber would be cut im- mediately, the owner had also agreed to pay the taxes. There was no provision in the contract for payment for additional tree growth over the six year period. At the time of interviewing this owner was deeply disturbed over the possibility he was "being cheated," heatedly stating that "not a stick of timber is going to be cut off this place until I get what's com- ing to me." In another case, a successful business- man used a contract written by his law- yer for a $20,000 lump-sum sale involv- ing 17 million feet of fir and pine timber. Sale volume was based on the buyer's "casual observation," and price aver- aged $1.17 per thousand feet in a year when stumpage prices in the county av- eraged several times higher. The seller made concessions in the selling price in exchange for the construction of a road, but this part of the contract was not [33] soundly written. The buyer did not con- Buyer's and mill's scale 5 struct the road, and the seller at the time filer's scale ^ . . .^ ....... ^ of the survey was in court for the second Seller's and mill's scale 2 time over nonperformance. — In the majority of sales involving Sub-Total 69 either verbal or written contracts, own- ^^erT cruise 9 ers felt the buyer had complied with the ^IVs °™£ m \\\\\\\\\\\\\\\\ 5 agreement. But 40 per cent of all sellers j i nt cruise 2 were dissatisfied with the logging, feel- Buyer's estimate 7 ing the buyer had done a "poor job." filer's estimate 4 ° . , \ u u n • •>•> No volume determination 2 Some said they would never sell again. 0ther 2 A frequent complaint was that too much damage had been done to the residual Sub-Total 31 stand and to the land. Alleged failure of the buyer to fulfill his contractual obli- Total " ; ' ' ' 10 ° gations was most frequent in cases where The practice of scaling is well estab- the seller had written the contract. This fished throughout the logging and mar- reflects provisions in seller contracts keting system. Timber owners prefer that the buyer is likely to find burden- scaling, believing that it provides a meas- some. It also suggests that there is a gap urement of the quantity of timber actu- between what owners want done on their ally taken by the buyer. Local mills pur- timberland and what timber buyers are chase the logs from timber operators on willing to do, and probably that some the basis of scaled volume, frequently owners do not clearly understand the also providing the landowner with copies results of even good logging. Oral con- of the scale tickets covering logs har- tracts and most buyer contracts offer vested from his property. Logging crews wide latitude as to logging methods. are also commonly paid on the basis of Many of these difficulties arose from output as determined by scaled volumes, the failure of owners to administer the In selling standing timber by log scale, sale adequately after an agreement had payment is based on a stumpage price been made. Some owners never saw their per thousand board feet and the scale of property either during or after the sale, the logs as they are removed from the At best only infrequent checking was property. The buyer may make payments made by others, while some did not in- bi-weekly or monthly as the timber is spect the sale area until after logging was removed, using scale tickets from the completed and the buyer had moved to m iH receiving the logs or his own state- another location. ment of the scaled volume as evidence of Sales payments. Most contracts spe- the amounts taken. Although most mills cified the method of payment for stand- recognize differences in log quality ing timber. In two-thirds of 55 stumpage (grade) and pay accordingly, in four- sales studied, payment was based on de- fifths of the timber sales on a log-scale termination of the volume in the har- basis a single price was set for all logs, vested logs (scaling), usually by either ln the establishment of this price, recog- the buyer or by the mill to which the nition may be given to the grade of logs buyer in turn sold the logs. The basis which the property will yield; the method of payment was distributed as follows: is a widely accepted marketing practice. R - c * fwmm . D . i j Payment on a log-scale basis involved Basis for payment Per cent of sales . J -. . D Scaling various difficulties. A common complaint Buyer's scale 39 among sellers was that the buyer failed Mill's scale 17 to support payments with scale tickets [34] establishing the volume of timber cut and removed. Others complained that the buyer hauled logs to two different mills, but submitted only the scale tickets and payment for logs taken to one. Par- ticipation by the seller in the scaling is obviously desirable to protect his inter- ests, but with limited volumes and inter- mittent operations the costs of scaling to the seller may become disproportion- ately high. This combined with lack of knowledge of scaling practices appears to explain the fact that less than one- eighth of the owners selling on a scale basis were represented in the scaling. Payment on a scale basis also encour- ages the high-grading of stands and the leaving of marginal and low-quality logs on the ground unless the sales specifica- tions are carefully drawn in the contract and adequate supervision of the sale is provided. A less obvious difficulty with sales on a log-scale basis results from the question of the scaling practice followed. All sales studied were scaled by either Spaulding rule or Scribner rule, with 82 per cent using Spaulding, and 18 per cent Scrib- ner. These two rules are mutually con- sistent, so the problem of different log rules found in some other areas of the United States does not appear important here. However, the practices under which these rules are applied are very impor- tant. In Mendocino County loggers pre- fer to handle long logs to reduce costs per thousand. These long logs of 32 and 40 feet in length may be scaled either on a long-log basis, with scaling as a single log based on the diameter of the small end and with no allowance for taper, or on a short-log basis, with scaling of two or three sections of the log and recogni- tion of the effect of taper on the scaling diameters of these sections. As shown in figure 5, for 40-foot logs long-log scaling by either Spaulding or Scribner will give volumes at least 10 per cent less than short-log scaling, while for logs in the smaller range of top diameters such as are cut from younger timber the differ- ence may amount to 25 per cent or more. Moreover, although log lengths provide a particularly striking example of the effects of scaling procedures, they are only one of a number of variables in scal- ing practice which can have an appre- ciable effect on the total log scale re- ported. Yet none of the owners inter- viewed in the study seemed concerned about log length and similar problems in scaling; in fact, about a third knew nothing about the method used in deter- mining log scale. The scaling procedures to be followed were rarely covered by the sale contracts, generally following the customary practices of the buyer. There is considerable variation in the scaling practices of different buyers in the county. Lump-sum payments based on some type of estimate of the total volume of standing timber in the sale were also common, representing one-third of the sales made (see text table on page 34). In half of these lump-sum sales the vol- ume was estimated by a cruise involving the tallying of timber volumes on sample areas, while in the remaining half re- liance was placed on rough ocular esti- mates or similar approximations. Pay- 16' Spaulding scale 12-12 16 Scribner scale 16 20 24 28 Log diameter, inches Fig. 5. Per cent of 40-foot log scale lost if log is scaled as a single log instead of as multiple logs (taper 1 " per 8'). [35] ments were made either as cash in ad- The rules also provide that in lieu of vance or at specified intervals. Most such these requirements, not less than 80 re- sales leave a high degree of uncertainty served seed trees, 18 inches or more as to the volume of timber actually re- d.b.h., shall be left standing within each moved, and the prices per thousand 10 acres of cutover land. The latter spe- quoted by the owners are of questionable cification also applies to young-growth meaning. timber stands. Lump-sum sales based on inadequate Rules for the Coast Range Pine and knowledge of timber volumes are obvi- Fir Forest District provide that areas of ously subject to abuse, and the method pine or of mixed coniferous timber shall has sometimes been held to be unsound. have reserved all thrifty sound trees 20 However, a lump-sum sale based on a inches d.b.h. or less, with a minimum of careful tally or cruise of marked timber two seed trees to be left per acre and no and subject to adequate contract provi- area to be more than one-eighth of a mile sions and supervision can be an effective from seed source. The same diameter method of selling timber. This is espe- limit applies in areas of pure Douglas-fir, cially the case for small or intermittent with the addition that not less than 80 sales in which the volume handled does Douglas-fir trees over 16 inches will be not warrant the cost of supervision of left on every 10 acres of harvested land, scaling by the seller. In addition, some In addition to the above specifications, owners favored lump-sum sales because rules for both districts establish mini- they preferred to be paid before the tim- mum practices of logging, hazard reduc- ber was cut. tion, fire suppression, and forest-insect and disease protection. Timber-cutting practices in Men- Timber-cutting practices were not or- docino County are broadly governed by dinari l y defined in sale agreements, ex- the Forest Practice Rules, which set up cept in general terms Therefore, in most minimum acceptable practices to keep sales the forest-practice rules constituted timberland in productive condition. The the only written provisions governing western part of the county comes under cutting practices that were of legal stat . the rules of the Redwood Forest District ure As common \ y used? both written and (California Division of Forestry, 1953), oral sale agree ments usually stated sim- while the balance of the county is in the ply that the buyer was entitled to « all Coast Range Pine and Fir Forest District merchantable timber" above a certain (California Division of Forestry, 1953) . mmimum diameter. Within these rather The forest-practice rules were developed broad limitations the buyer selected the by a committee of forest-land owners and timber he wished to cut? and usually re . operators after public hearings in each moved all currently merchantable tim- district, were approved by the votes of ber more than two-thirds of the private tim- Jn this study< the bagis for ^ ^ berland ownerships in each district, and 5? tjmber sa]eg was distributed ag fol . were given force of law by action of the i rtT1T «. ° J lows . California State Board of Forestry in . to/it t inco a. • • l l Basis for cutting Per cent of sales 1947. In 1953 the original rules were _ , . ' -, , -. , , Buyer s choice of amended and strengthened. merchantable timber 49 Rules for the Redwood Forest District Diameter limit 26 specify that in old-growth timber stands Clear cut 17 not less than 40 reserved seed trees, 24 Marked timber 3 inches or more d.b.h., shall be left stand- ing within each 10 acres of cutover land. Total 100 [36] The type of cutting was distributed in the following manner (based on 58 sales) : Type of cutting Per cent of sales All merchantable trees 57 Clear cut 17 Heavy partial cut (more than 40 per cent of merchantable volume) ... 12 Light partial cut (less than 40 per cent merchantable volume) 7 Re-log or salvage 7 Total 100 Thus, timber was marked for cutting according to particular management ob- jectives or silvicultural needs of the for- est in only 3 per cent of the sales. Heavy cutting, ranging from more than 40 per cent of the merchantable volume to all merchantable volume, characterized over two-thirds of the sales, and in an addi- tional 17 per cent the forest was clear cut. A primary reason for the heavy cut- ting in woodland sales is the preference of timber operators, who favor heavy cutting so that fixed operating costs can be spread over as large a volume as possible. This preference is often shared by timber owners who desire the maxi- mum sale income, frequently regardless of their financial position, and by own- ers whose management objective is con- version. The interest of the former in the possibility of increasing forest re- turns over longer time periods through more conservative cutting practices is sharply limited by their preference for current income. In addition, many own- ers who are unfamiliar with timber growing and selling are simply unaware that cutting alternatives other than those usually offered even exist. Custom is ap- parently a strong factor in determining timber-cutting practices. Although this study did not attempt to evaluate the effect of customary cutting practices on future small-woodland pro- ductivity, observation during field inter- views indicated that the common method of diameter-limit cutting has resulted in fair stocking of residual trees on most properties. This is due more to initial- stand structure than to conscious efforts by timber operators and land owners, as the stands are generally uneven aged. Careless logging, rather than type of cut- ting, appears to be the major problem. Often trees which are not cut are badly damaged or knocked over by falling tim- ber or heavy machinery. Some owners are unaware of these problems, others don't care. But of the owners interviewed during the study many were distressed over the destruction of residual stands. Technical assistance. In forest man- agement and marketing matters assist- ance is available to the woodland owner in Mendocino County from several pub- lic and private sources. The County Farm Advisor in Ukiah provides information and advice for farmers and other rural landowners upon request and has various publications concerning forestry and timber marketing. A service forester from the California Division of Forestry is available. During most of the period of this study Mendocino County was cov- ered by a service forester from Santa Rosa, in Sonoma County, but since 1957 there has been a service forester sta- tioned at Willits. The service forester provides on-the-ground advice or assist- ance concerning forest management, in- cluding timber marketing. This market- ing assistance covers such matters as vol- ume determination, marking timber, finding and selecting a buyer, price in- formation, contractual arrangements, and administering the sale. The function of the service forester is to develop the owner's interest in forest management, advise and assist him in initiating man- agement practices, supply needed infor- mation, and encourage him to follow good forest practice. The direct conduct of these activities is carried out bv the owner, not by the service forester. Private consulting foresters who may [37] be retained on a fee basis to handle for- est management activities for the timber owner are available. Consultants offer a full range of technical services, includ- ing forest inventory, management plan- ning, and sale administration. Many such consulting foresters have had wide ex- perience in timber marketing and are highly qualified to carry out the entire sales operation for the owner. Although this professional assistance in timber marketing is available and small-woodland owners in the county often lack such experience, and despite the fact that receipts from many sales are sufficiently large to justify employing outside technical assistance, the owners in 73 per cent of the sales covered by this study reported they had no market- ing assistance. The remaining sales were about equally divided among owners receiving assistance from one of three sources: (a) private timber cruisers, particularly for information on timber volumes— 10 per cent; (b) the service forestry program — 7 per cent; 6 and (c) neighbors, friends, and relatives, partic- ularly for information regarding prices and buyers— 10 per cent. None of the owners whose gross sale receipts were less than $2,000 employed outside assist- ance. Of those sellers whose receipts ex- ceeded $2,000, one-fourth had assistance. A chief reason why technical market- ing assistance is not sought in spite of an apparent need is that many owners are unaware that such agencies exist. This was especially common among absentee owners and those whose occupational in- terests were not closely associated with timber ownership. 6 California Division of Forestry records showed that 14 owners who did not report assistance had been contacted by division per- sonnel, in several cases in connection with minimum-diameter cutting permits. Of these 14, three were contacted after the timber sale was made, 10 during the sale year (it could not be determined if the contact was before or after the sale) , and one before the sale year. Variations in sales practices Since land is held in different types and sizes of ownerships and for various purposes, attitudes and interests regard- ing forest land vary from one group of owners to another. For the same reasons the marketing practices of each group will vary from others and from the gen- eral pattern described above. The marketing practices of particular groups are summarized here in terms of their differences from the general small- woodland marketing system. Emphasis is placed on type of ownership, as this classification is easily recognizable and because variations in marketing prac- tices were more pronounced than in the size of ownership or residency group- ings. However, both size of ownership and residency are considered. Variations among types of own- ers. Timber interests as a special owner- ship group include timber operators and timber holders. The former carry on commercial timber operations as a major business, the latter hold timber either for commercial operations conducted by themselves or for sale to others. Fifty-five Compared with all owners, timber interests more frequently: Harvest their own timber and sell the logs at the mill Select buyers on the basis of price considerations Determine selling price by negotia- tion or their own asking price Sell on scale Control selection of trees to be cut by marking or other means Consider logging good to satisfac- tory Feel the buyer had complied with the contract Receive outside technical assistance (usually timber cruising) 38 per cent of the timber interests had previ- ous sales experience, compared to 36 per cent of all other owners. The number of sales made by timber interests averaged 2.5 per owner, contrasted to 1.5 for agri- cultural interests and 0.5 for miscellane- ous interests (see definitions of the various owner types on page 10) . As noted, the small-forest land owner generally markets stumpage rather than logs. This is true almost without excep- tion for owners with agricultural and miscellaneous interests, who marketed stumpage in about 96 per cent of their sales. Timber interests, however, sold logs at the mill about as frequently as they sold standing timber. Typically, the owners selling logs performed the log- ging with their own equipment ; with one exception, their primary occupation was timber operations of various kinds. Timber interests rather consistently depart from the general marketing sys- tem, usually towards more advantageous sale arrangements. Contrasted with other types of owners, they are more familiar with existing markets, potential buyers, and prices being paid for forest prod- ucts. Their knowledge of timber and of marketing methods distinguishes their bargaining position from that of other small-woodland owners. As a result, owners with timber interests felt they were more successful in completing satis- factory timber sales than were other owners. Agricultural interests as a group in- clude livestock ranchers (corporate and individuals) and farmers (fruit, poultry, dairy, cultivated crops, etc.). Much land held by agricultural interests is well suited to growing timber. In some owner- ships commercial timberland forms a substantial portion of the total acreage and timber is an important, but second- ary, enterprise. Usually, however, timber holdings receive little special attention except to the extent that they are used for grazing by livestock (Poli and Baker, 1953). The marketing practices of agricul- tural interests conform to the general pattern, except that they more fre- quently: Receive their asking price when sell- ing timber Sell on scale Market timber without outside tech- nical assistance Agricultural interests figured promi- nently as sellers in the foregoing anal- ysis, accounting for more sales (41 per cent) than any other owner type. As would be expected then, the marketing practices of agricultural interests do not appreciably differ from the general mar- keting system already described. An ex- ception worth noting, however, is that a larger proportion of agricultural in- terests had previous sales than did all owners. Agricultural interests matched timber owners in extent of experience — 54 per cent as compared to 55 per cent — but not in degree of experience per owner. The secondary role of timber in agricultural ownerships coupled with the owners' slight familiarity with timber and marketing places them below timber owners in terms of bargaining position. Miscellaneous interests include per- sons holding land for recreation, for res- idence, or for various other purposes that cannot be properly classified as tim- ber or agricultural. The ownerships are typically very small, generally from 80 to 100 acres. Nearly two-thirds of the owners live outside the county, while three-quarters live away from their prop- erty. Timber operations are infrequent, and commonly remove all merchantable timber at the time of cutting. Some own- ers have withdrawn their land from tim- ber operations because cutting would conflict with other land uses. [39} Nearly 40 per cent of the owners in this group sold timber, accounting for 42 per cent of the sales analyzed. With few exceptions their marketing practices are poorer than the general pattern. Being unfamiliar with either timber or marketing, owners tended to practice disadvantageous methods and often were unhappy with the results. Sales usually were made without knowledge of current prices and resulted from a single buyer's offer. Some owners in the miscellaneous- interest group felt their timber sale was a "windfall" financially, never having been aware of the possibility of commer- cial timber cutting. Nonresident owners were troubled over the problems of get- ting full payment for timber harvested and of obtaining satisfactory logging. In marketing their timber, miscel- laneous-interest owners often use disadvantageous methods. Compared to all owners, these small nonresident owners more frequently: Select the buyer on the basis of nonprice considerations Accept the buyer's offer in setting the selling price Sell timber on a lump-sum basis Agree to "buyer's choice" in selec- tion of trees to be cut Are dissatisfied with the logging aspects of their sale Do not have previous sales experi- ence Agree to contracts provided by the buyer Variations among sizes of own- erships. To a large degree variations in sales practices among owners of dif- ferent-size ownerships reflect the type of owners that compose each size class. Thus, agricultural interests constitute 83 per cent of the owners holding from 700 to 5,000 acres, while miscellaneous-type owners account for 66 per cent of the holdings of less than 180 acres. Owners of less than 180 acres fre- quently: Select the buyer on the basis of non- price considerations Accept the buyer's offer in setting the selling price Sell timber for lump sum payments Agree to "buyer's choice" of har- vestable trees ■o o o Owners of 180 to 700 acres fre- quently: Select the buyer on the basis of price considerations Negotiate with the buyer when de- termining the sales price Sell on scale Receive outside technical assistance o o o Owners of 700 to 5,000 acres fre- quently: Know what their timber is worth and receive their asking price Sell on scale Control the selection of trees to be cut Approximately the same proportion of owners in each size range had previous sales experience. Variations by owner's place of residence. Disadvantageous marketing practices were particularly apparent among nonresident owners, who were more likely to lack knowledge of timber and of marketing than resident owners. Also, because they lived away from their property, these owners found it difficult to check the buyer's operations and to attend to other important sale details. Since residency is closely related to type of ownership, the variations in mar- keting practices reflected this relation- ship. Agricultural interests usually reside on their property, or have a manager who does. Thus they are better informed of marketing matters than are owners in [40] the miscellaneous-type group, who com- monly live outside the county. Timber interests are very nearly equally distrib- uted by place of residence. Nonresident owners living outside the county more frequently: Accept the buyer's price offer Agree to contracts provided by the buyer Sell for lump-sum payment Lack experience in selling timber Receive outside technical assistance, usually in cruising timber -o o o Owners living on the property or within the county more frequently: Select buyers who are personal ac- quaintances or who are consid- ered reputable by others Receive their asking price for the timber Sell on verbal agreements as to the terms of the sale Sell on scale In general, resident owners seem to be more casual about their timber-sale ar- rangements than are other owners. This probably is due to their greater familiar- ity with the local marketing scene and with timber buyers, with whom they fre- quently are acquanited. As a result resi- dent owners tend to sell timber on terms established in a "gentlemen's agree- ment." Nonresident owners sought outside technical assistance more often than other owners. However, the principal kind of assistance was in timber cruising, and none of the owners hired a person to oversee the timber sale. Prices and price-determining factors Because marketing practices range widely, and timber varies in quantity, quality, and location, the prices received [41 by owners were highly variable. Here is the average price and the range in prices for Douglas-fir stumpage for 36 small- woodland sample sales: Year Average price Range in prices r— dollars per MBM^ 1952 5 3-10 1953 5 3-6 1954 10 6-18 1955 8 3-10 1956 10 6-15 The variability in prices is denoted by the fact that in any one year the highest price was from two to more than three times the lowest price. The trend of the prices is upward, with the average price in 1956 double that in 1952. Clearly, woodland owners have enjoyed larger returns from timber marketing as a re- sult of increasing lumber production and the consequent greater demand for logs. Contracts recorded in the County Courthouse provided price data on an additional 125 private timber sales made in the period 1950 to 1956. These data are shown in figure 6, and establish a price level and trend similar to that shown above for both redwood and Douglas-fir. In most sales, the two species are differentiated for payment purposes, with redwood commanding a price av- eraging SI to $2 more than Douglas-fir. For both species taken together, the range in prices was from 2 to 20 times the lowest price. From the nature of these data it is not possible to make a meaningful analysis of the effects of particular marketing practices on the prices received bv wood- land owners. Prices per thousand for log- scale sales are affected by the scaling practices followed: prices per thousand from lump-sum sales are of doubtful meaning since the volumes involved are uncertain: and in some cases services, such as road building, were included. Moreover, timber prices are strongly affected bv size, quality, volume, and ac- cessibility of the timber as well as bv the marketing practices used. An attempted analysis did show gross correlations be- tween price and such factors as seller experience, use of technical assistance, means of selecting buyer, and basis for and type of cutting. While the price dif- ferences were generally in the direction which would be anticipated, the limita- tions of the data made it impossible to establish the statistical significance of any of these differences. r°y Redwood Douglas-fi 1950 1951 1952 1953 1954 1955 1956 Fig. 6. Average reported prices for private stumpage, Mendocino County (based on 125 transactions). Why woodland owners won't sell Only about half the owners surveyed had sold timber during the study period. The remaining 46 nonsale owners, over three-fourth of whom were in the mis- cellaneous-interest group with less than 180 acres, were asked about their oppor- tunities or efforts to market timber, and why they did not sell. Here are the an- swers to the last question: Reasons for not selling Per cent of owners Believes cutting would conflict with other land uses 64 Management plans call for deferral of cutting 13 Present prices too low 6 Intend to sell soon 6 Other reasons 11 Total 100 The results show that the majority of owners failed to sell timber by choice rather than for lack of a chance to do so. Nearly 60 per cent of the owners received at least one offer in the period 1951- 1956. A substantial number — 31 per cent — had received three or more offers to buy from timber or mill operators during this period. This resistance to marketing opportu- nities resulted primarily from the belief of the owners that cutting timber would conflict with other land uses of greater value. About two-thirds of the owners gave this reason for withholding timber from sale. Characteristically, their own- ership interests were residential or rec- reational. Basic to the attitude that cut- ting would occasion loss of other values was the belief that damage and debris would result. Typical responses were those of the owner who indicated that he did not want to sell any timber because of "the mess that would result," and of another who said that "logging would ruin the place." Of those owners who had not received offers to buy, 21 out of 23 had made no effort to sell. Some had no merchantable timber, but most were not interested in selling timber because they felt cutting would conflict with other land uses. One owner had contacted a local mill and intended to sell soon. Another owner said he had offered his timber to a buyer logging an adjacent property. The buyer refused to buy the timber, then tres- passed and cut the timber without pay- ing for it. The important conclusion to be drawn from this situation is that about two- thirds of the nonsale owners had in effect withdrawn their timber land from pos- sible commercial timber production. These owners represent about one-fourth of all owners included in the survey sam- ple, holding less than one-fourth of the total area. Their withdrawal was based on the belief that timber cutting was in- compatible with residential or recrea- tional uses, even though these activities normally utilize only a small portion of the property. [42] Home use of woodland products The small woodland has been a tradi- tional source of various kinds of wood products used by rural owners around the home or farm. This use has lessened in modern times as technology and eco- nomic growth made more desirable sub- stitutes available. Wire has replaced the rail fence, lumber the rough hewn pole, and oil or gas heaters the old wood stove. The cutting of forest products for home use was common practice in the county, but only small amounts were uti- lized. Of the owners studied, 40 per cent reported using their woodland for fuel- wood, fence posts, lumber, poles, or split products. Home use was more prevalent among resident landowners than others. Fuelwood was the usual product cut for home use. About a third of the own- ers (including more than half of those living on their properties) reported they cut some fuelwood each year. In order of their importance, oak, pine, fir and madrone constituted the major portion of the volume consumed. Annual fuel- wood use by 47 woodland owners totaled an estimated 424 cords per year, or about 9 cords per owner per year. The second-most frequent product cut for home use was fence posts. Twelve per cent of the owners, most of whom were farmers and ranchers, reported they cut posts at irregular intervals in quantities ranging from 50 to 2,000 posts. Redwood was the principal species utilized for fencing, but about 20 per cent of the total was oak. Fuelwood was the only product regu- larly cut. Occasionally lumber and poles are needed for construction of homes, barns, sheds, etc., and when the need arises the required amount may be ob- tained from the woodland. In instances where lumber is needed, the owner usu- ally supplies logs to a local mill under a contract sawing arrangement, the owner providing transportation of logs to and lumber from the mill. Purchasing procedures of timber buyers Considering the manner in which small-forest timber is marketed, the role played by timber operators in the mar- keting process is obviously important. The buyers play the critical role of as- sembling timber from numerous small holdings that might not otherwise reach the market. Characteristically, during re- cent years in Mendocino County, the buyer has sought a seller rather than the reverse. Since there is no organized market through which to locate owners who have saleable timber and who are willing to sell it, the buyer becomes a "prospector" searching out potential sellers through various "hit or miss" procedures. Al- though methods vary, the most common practice is simply searching a given area for merchantable timber, identifying the owner through local inquiry or examina- tion of the tax rolls, and then making an offer to buy the timber. The buyer has little way of knowing in advance whether or not the timber owner is interested in selling. Occasionally the buyer learns of an owner interested in selling timber through a mutual friend or neighbor. Often the contact is made through a per- sonal acquaintance with the owner. Some operators have pinpointed merchantable stands by flying over forested areas, while others have used U. S. Forest Serv- ice forest survey maps. Once a sale in a particular locality is completed and the logging started, the operator frequently contacts the owners of adjacent or nearby forest properties with offers to purchase their timber "while he is operating in the area." Some owners gave this situation as the reason for selling their timber and for selecting the buyer, feeling that they were taking advantage of an opportunity they might not have later on. Lack of markets during earlier years may partly account for this attitude. An obvious consequence of this situa- [43] tion is that the opportunities of woodland market. Presumably, then, the increased owners to market timber are largely de- sales from small ownerships in Mendo- termined by the activity of timber buy- cino County in recent years were due not ers. In general, owners sit on the side- so much to the attractiveness of high lines, passive participants in the events prices as to the activity of buyers in that finally bring their timber into the quest of more timber. ACKNOWLEDGMENTS This report was prepared as part of a three-year study under a Western Regional Marketing Project (WM-31). We wish to thank the U. S. Forest Service, Pacific Southwest (formerly California) Forest and Range Experiment Station, for use of forest-inventory information and data as a sampling base for the study, and for a grant in support of a special owner- ship study which is condensed as a portion of this report. Thanks also to the Agricultural Research Service and Adon Poli for the use of the 1948 ownership data, without which a comparison and analysis of ownership changes would have been impossible, and for his frequently solicited consultation. The tedious task of collecting ownership sample data was made pleasant by the helpful cooperation of the Mendocino County Assessor, W. L. Brown, his Deputy, Mrs. A. Phillips, and staff, and the Tax Collector, W. T. Clow, and his staff. Without the help of forest owners and their answers to our many questions there could be no study of forest marketing practices in Mendocino County. Their coopera- tion is gratefully acknowledged. [44 APPENDIX Appendix Table 1. Commodity Production of Forest Products, Mendocino County, 1947-1956 Year Number of registrants Saw logs and veneer logs Pulpwood Split products Piling and poles Total Million bd. ft. Million bd. ft. Million bd. ft. Thousand pieces Million bd. ft. 1947 209 1 210 1948 69 315 1 1 316 1949 81 356 8 1 364 1950 130 484 24 2 1 510 1951 139 689 57 6 6 753 1952 172 727 74 3 6 805 1953 220 886 41 3 927 1954 263 958 29 6 3 994 1955 273 998 23 8 9 1,030 1956 277 968 12 7 30 990 Based on reports of timber operators at time of registration as compiled by the California Division of Forestry. Appendix Table 2. Lumber Production by Mill-Size Class, Mendocino County, 1951 and 1956 Size class of reporting mills, 1951 1956 annual production, million board feet Number of mills Total production Number of mills Total production More than 25.0 2 12 70 34 million bd. ft. 1 294.4 273.2 10.6 7 25 51 18 million bd. ft. 277.8 10.0-24.9 352.5 1.0- 9.9 . 231.9 Less than 1.0 6.2 Total reported 118 8 126 578.2 7.4 585.6 101 4 105 868.4 Estimated Grand total 5.9 874.4 Data obtained from Division of Forest Economics, California Forest and Range Experiment Station. U. Forest Service. 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(J* 51 . tH cn CD CO o c- cn ia co • o "* tH CO 00 CO rH CO lO ! «D O i-\ . rl CO 00 iH IO lO . . f "<* • CO t- iH CN "* 1 0> OP5 ; © d '. © cn CO O o CN • CO .2 § : G 13 T3 CO jg to • .52 g 13 • c mpanie panies di vidua viduals ningco ming in to cd o M 1 CO o a Pi O a 1 1 V A >> gco com gin indi fan far] -operatin -holding -operatin -holding livestock livestock armers 2 c |_| l_ M tH 1 1 U-l 1 13 CO CO CO » CD CO M ,D X! XJ ^ bo bo a) £ ! .1 g .M 1 1 £ 8 " H H E- h E- < tf tf O tf p fH Appendix Table 5. Number and Area of Ownerships by Residency, Mendocino County, 1957 Owners Area owned Average size ownership Residency status Numbers Per cent Thousand acres Per cent Acres RESIDENT* NONRESIDENTf UNKNOWN 2,515 1,384 18 64.1 35.4 0.5 1,174 641 2 64.6 35.3 0.1 467 463 TOTAL 3,917 100.0 1,817 100.0 465 NONRESIDENTS Northern California coast San Francisco Bay area Other Northern California Southern California 315 785 76 169 39 8.0 20.2 1.9 4.3 1.0 149 318 45 78 51 8.2 17.5 2.5 4.3 2.8 473 406 593 461 Outside California 1,310 Total 1,384 35.4 641 35.3 463 * A party whose address listed with the County Tax Collector is within the county. The land is not necessarily occupied. t A party whose address listed with the County Tax Collector is outside the county. [48] Appendix Table 6. Number of Owners by Residence and Type, Mendocino County, 1957 Type of owner Resident Number Per cent Nonresident Number Per cent Timber-operating companies Timber-holding companies Timber-operating individuals Timber-holding individuals Range-livestock-farming companies Range-livestock-farming individuals Other farmers Recreational-property owners Other classified owners TOTAL* 42 125 79 2 423 400 211 1,233 2,515 1.1 3.2 2.0 0.1 10.8 10.3 5.4 31.6 64.5 27 16 25 131 6 110 141 557 371 1,384 0.7 0.4 0.6 3.4 0.2 2.8 3.6 14.3 9.5 35.5 * Excludes 18 owners for whom there are no addresses. Because of this the total is 3,899 owners and not 3,917 as indicated on other tables in this report. 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Com Private Mendo -a p! 3 o H Ph CO h tH CO CN t> t- t- l> CO "«tf rH in ca g CO t- co ** 00 t- CO CN iH OS t> t- rl H oo T-T 3 5 * 00 •<* 05 ©_ ^ So rH Pi co OS 00 ""•J °°. CN l> t> l> 00 o ca o h 0) 6 6 CN CO d cc id os i-i rl N H CO 8 X w Ph T-l OS c a. I ca h CO OS CO oo o t> rH OS t> CO • CO ^ o 1 CN CN t- CN CN ■^ CO CO CN in co co o_ CO CN CO Ph a < fc Pi •0 ■ CO ca M M • CO CD CO . c» "3 ^ CO • CD O ^ s £ . p. ° • S ° • o 00 • o 00 3 • i-i •*4 bo 1 bo •i-< 88 <«-l 3 - CO — c< 1 r-operatin es r-holding ft rz M '5 M o o -*» V CO CL cp •* £ § o S 2 1« 1 i ation-prop classified ssified. . . . 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CN "1* b- t- CO IO • i-i 02 l o : © © * c4 cs 6 r4 ; 00* e8 rH rH CO IO rH t- t> rH p *-■ bo < ddrld "^l" rH T-i tA ; d rH 52* C rH -a ; <» ,,; <3 CO •3* pa ft, CO t-4 as c ^ • O co .£ bo .5 bo -* 03 •—! 03 r- H W (J) ft, O ft, o a> -~ o A o A > £ l l l l 3 R (-, M 1-4 M I P Q 4 1 > 0) o »- ft G O '■*» eS 0) «-< o cu 03 T3 CD 03 C g 1 co o o ? 0) 4> a? a X2 X! JO J3 bO £ 1 .§ .§.§§§ bo'd S 08 "- T3 £ * § o r2 -g *c"j o Eh Eh Eh Eh tf pel o 04 O P Eh Appendix Table 11. Comparison of Estimated Total Number and Area of Small Woodland Ownerships in Mendocino County, 1957, With Marketing Sample Size of ownership Estimated population Marketing sample Owners Acreage Owners Acreage acres 0- 39 . . 40- 179 .. . 180- 379 . . 380- 699 . . . 700-1,299 . . . 1,300-2,599 . . . 2,600-4,999 . . Numbers 1,157 984 266 143 118 73 65 Per cent 41.2 35.1 9.5 5.1 4.2 2.6 2.3 1,000 acres 11.1 95.4 70.4 81.1 113.3 139.5 227.6 Per cent 1.4 12.9 9.5 11.0 15.3 19.0 30.9 Numbers 30 54 18 8 7 4 5 Per cent 23.7 42.9 14.3 6.3 5.6 3.2 4.0 1,000 acres 0.7 5.1 5.3 4.4 7.8 9.2 17.4 Per cent 1.4 10.2 10.6 8.8 15.6 18.5 34.9 Total 2,806 100.0 738.4 100.0 126 100.0 49.9 100.0 Sampling procedure used for marketing-interview study. The ownership study presented on page 17 made it possible to designate each owner touched by the line intercept as being a commercial or noncommercial forest land owner. From this sample it was estimated that there were 2,806 private commercial forest land owners with less than 5,000 acres. Financial and time considerations indicated that about 150 land owners could be personally contacted. A random sample of 158 owners was drawn from an owner-address list. These owners were distributed among the size classes in the proportion that the size class represented the estimated total number of owners, as shown in the table above. For example, 35 per cent of the total number of owners were in the 40-179-acre size class; thus, 35 per cent of the 158 owners to be interviewed were drawn from that class. Not all of these owners could be contacted, as some could not be found while others failed to reply to a mail questionnaire. Thus the final sample consisted of 126 sample owners, broken down in size groups as shown in the table. Appendix Table 12. Distribution of Small Woodland Sales by Total Value of Sale, Mendocino County, 1950-1956 Total value of sales* Sales Sales in which technical assistance was received Dollars Less than 999 Number 8 5 5 6 4 4 4 5 41 Per cent 19 12 12 15 10 10 10 12 100 Number 1,000- 1,999 2,000- 2,999 1 3,000- 4,999 1 5,000- 9,999 1 10,000-14,999 15,000-19,999 2 20,000 or more 2 Totals 7 Range in total sale values: $49.50-$60,000. Average value per sale: $9,308. [54] Appendix Table 13. Reported Prices Per Thousand Board Feet Paid for Redwood and Douglas-Fir Stumpage in Mendocino County, 1950-1956* Year Redwood Douglas-fir Average Range Average Range 1950 $3.25 $2.50- 4.00 $3.00 $2.50- 4.00 1951 6.31 3.00-13.00 4.00 2.50- 6.00 1952 7.51 2.50-20.00 5.50 1.41-20.00 1953 7.00 4.00-10.00 5.75 3.00-10.00 1954 no data 10.04 5.50 7.25 4.00- 7.00 1955 4.00-20.00 2.50-13.00 1956 10.50 5.00-15.00 10.25 5.00-18.00 * Based on prices in 125 recorded private timber sale contracts. Appendix Table 14. Number of Owners Cutting Timber for Home Use and Product Quantities, by Type of Product, Mendocino County, 1950-1956 Product Owners* Annual number of product units t Average number of product units per owner f Fuel wood Number 47 15 4 2 3 Per cent 39 12 3 1 1 424 cords t § § § 9 cords Fence posts t § § § Lumber Poles Split products * Based on 120 replies. t Owner estimates in 44 replies; prorated for others. t One owner reported cutting 250 posts annually. All other owners cut posts at irregular intervals in quantities ranging from 50 to 2,000 posts. § No owners reported regular cutting of these products. [55 LITERATURE CITED Anonymous 1957. Production of western sawmills for 1956. The Lumberman 84(4) :57-63. Baker, Harold L., and Adon Poli 1951. Area and ownership of forest land in Mendocino County, California. California Forest and Range Experiment Station. Berkeley, Calif. Forest Survey Release 10:1-23. California Division of Forestry 1953. Forest practice rules for Redwood Forest District. Revised 1953. California State Printing Office. Sacramento, 37 pp. 1955. Forest practice rules for Coast Range Pine and Fir Forest District. Revised 1953. Cali- fornia State Printing Office. Sacramento, 33 pp. California Forest and Range Experiment Station 1954. Forest statistics for California. California Forest and Range Experiment Station, Berkeley. Forest Survey Release 25:1-66. Casamajor, Paul 1958. Changes in the ownership of rural private land in Mendocino County, California, 1947- 1957. Unpublished Master of Forestry professional paper, School of Forestry, University of California. 64 pp. Duerr, William A. 1949. The economic problems of forestry in the Appalachian Region. Harvard University Press, Cambridge, Mass. 317 pp. Hasel, A. A., and Adon Poli 1949. A new approach to forest ownership surveys. Land Economics 25:1-10. Industrial Survey Associates 1951. Mendocino County — Its economic assets, needs and prospects. A report prepared for the Mendocino County Chamber of Commerce by Industrial Survey Associates, San Francisco. 82 pp. May, Richard H. 1953. A century of lumber production in California and Nevada. California Forest and Range Experiment Station, Berkeley. Forest Survey Release 20:1-33. 1954. The lumber production and forest resources of Mendocino County, California. Manu- script, Division of Forest Economics, California Forest and Range Experiment Station, Berkeley. 20 pp. 1957. Production and plant receipts of veneer logs in California — 1956. California Forest and Range Experiment Station, Berkeley. Forest Survey Release 27:1-7. May, Richard H., and Harold L. Baker 1957. Lumber production in California — 1956. California Forest and Range Experiment Station, Berkeley. Forest Survey Release 30:1-15. 1958. Output of timber products in California, 1956. California Forest and Range Experiment Station, Berkeley. Forest Survey Release 35:1-35. May, Richard H., and Alexander Simontacchi 1947. Production of lumber and other sawed products in California and Nevada, 1946. California Forest and Range Experiment Station, Berkeley. Forest Research Note 55:1-9. Poli, Adon, and Donald T. Griffith 1948. Forest land ownership in northern Mendocino County, California. California Forest and Range Experiment Station, Berkeley. Forest Service Release 5:1-49. Cover photograph: Intermingled range, forest, and farm use of land typical of small ownership in Mendocino County. (Photograph courtesy of Adon Poli, Agricultural Research Service.) 7Sw-6,'60(A7238)JP