Its pretty confusing that he is telling Red about it, Red agrees that he knows which one and where (as tho they were both always from the same area??) and then he tells him something is buried there that he wants Red to have.
How could that be when he was still behind bars while saying it? Kind of a goof to me.
Stick to cartoon movies.
shareObviously he planted it after his escape so that Red would pick it up upon his release.
shareAnd Red did not go right to the tree when he was released. He bought the compass and looked around for that big oak tree and the rock wall in the hay field. It took him a few weeks to locate it. But yes, Andy put the box there after he escaped for Red to find so it would lead him to Mexico.
shareAt the time that Andy told Red about the gift, the gift wasn't there yet. Andy planted the gift after he got out. Andy told Red about the gift because Andy was planning to escape soon.
As for how Red would know - Andy tells Red about one area with the tree. That's what Red was looking for -- the tree