Greetings Jon:
The timber buyers who have been kind enough to report back to me with stumpage and FOB prices report that their FOB prices, for all intensive purposes, are "mill-delivered” prices.
However, you ask an excellent question because there is some discrepancy regarding grade log and veneer log FOB pricing wherein a fair amount of veneer buyers will absorb the freight (transportation) of veneer logs purchased on the landing. Below are four different scenarios based on my experience and understanding:
1. Veneer buyer grades and prices the logs on the landing: timber buyer/logger transports the logs to the mill/yard.
2. Veneer buyer grades and prices the logs on the landing: freight/transportation paid by the veneer buyer or mill/yard.
3. Veneer buyer grades and prices the logs on the landing: timber buyer/logger transports logs to the mill/yard, but is reimbursed for his transportation costs.
4. Logger cuts, sorts, and delivers all grade and veneer logs directly to the mill/yard.
So, most grade log FOB prices are truly delivered prices, whereas veneer log FOB prices may be "value at log landing" if the veneer buyer is transporting the logs or if the veneer buyer is reimbursing the timber buyer/logger for freight. Regardless of the method, the veneer prices are still reported as FOB.
