average cost for 1 acre of timberland

How Much Does 1 Acre Of Timberland Cost?

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Key Points

  • Timberland provides overall portfolio diversification, and the value of land increases by approximately 1% per year.
  • The value of timberland is determined by factors such as location, surrounding mills, and the quantity and type of timber on the land.
  • Plantation wood is a fast-growing timber source that can reduce reliance on natural land and has various uses, including logging and paper production.

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It provides overall portfolio diversification, which lowers portfolio volatility and risk. In addition, the land value will increase by approximately 1% per year.

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farmtogether new logo table$15,000+View InvestmentsYesUS Farmland
fundrise logo$10View InvestmentsNoPrivate Real Estate Deals

How Much Is An Acre Of Timberland Worth?

  • Ballpark estimates show that 1 acre of timberland has a value of approximately $1,500. What’s more, this value increases dramatically if landowners let the trees mature for decades.
  • As with all real estate, the primary determinant of timberland prices is location, such as surrounding mills and roads accessible to the mills. However, the quantity and type of timber on the land also play a significant role in value.
  • For instance, the lumber derived from large pine logs has more demand in an area with many sawmills than smaller logs that are ground into small bits for paper production or wood chips.
  • Those who own timberlands in the southern parts of America concentrate on producing larger pine logs. This is because the pine timber stands in this area consist of timber derived from trees almost the same age.

What Is Plantation Wood?

Plantation wood has become a reliable source of quick timber.

“Plantation wood” refers to large crops of harvestable timber in a shorter time frame. The goal is to grow as much wood as quickly as possible. Another name for the product produced with this farming technique is “fast wood.”

Large open fields on plantations were used historically to grow certain crops, such as cotton, sugar cane, tobacco, and coffee. Now, some of these large parcels are being used to have a rapidly growing crop of trees. Scientists and forestry specialists have been involved in creating and carrying out this method of timber production.

The timber produced in these fields can be used for logging, and the scraps can be material for paper, fiber, and pulp.

One notable feature of plantation wood farms is that they could reduce the reliance on natural land that strips the forests and trees at an alarming rate.

What Is Timber Worth?

Timber is valued per acre; here is the average value in 2020.

  1. Plantation Grown – $1,566 per acre
  2. Natural Land – $2,055 per acre

The volume and types of products available on a particular timberland site will determine the value per acre. Therefore, prices for timber products vary considerably even from county to county in a specific region based on demand.

The southern parts of the country are known for high-quality timberland producing large pine trees for logging. These larger pine logs are used to manufacture high-quality grades of lumber.

Much of the lumber across the country comes from small landowners. In the South, almost two-thirds of timber comes from small landowners.

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Each parcel is divided into shares, and investors can purchase shares to earn cash distributions as well as benefit from the land value appreciation.

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