How much to charge

There is a great thread already on here with a lot of good discussion.

http://www.draftanimalpower.com/showthread.php?t=93&highlight=logging+economics

Carl

Rick makes a good point. I have always the most valuable aspects to having horses is their versatility and low cost. This has led me to use them in my personal as well as business endeavors. Which is the reverse of what Rick suggests. I do have other uses for my horses, and other sources of income, precisely because much of the logging work that is commercially available is not cost effective….. (Truthfully, even for machinery, but they handle a lot more cash, although if you ask them to sharpen their pencil very few are actually taking home any more than we are).

Personally, I never felt comfortable being a full-time anything, and having animal-power as my motive power has given me the freedom from debt and maintenance encumbrance to move around the market, even just working for myself at home on non-paying projects, to find those opportunities to make ends meet.

This is not to say that I haven’t worked on logging jobs that provided me less than $35/hr. This summer 4 of us worked together on a job cutting spruce, some pine, and hardwoods. It turned out that the lion’s share of what we cut was spruce, which was somewhat depressed, so after a reasonable stumpage we were only able to support $20/hr for chopper, and $25/hr for teamster… although we did cover $70/hr for the forwarder…. which is another part of the equation which seems much less flexible than the production costs of using horses. However, the remainder of the job is closer and closer to the landing, and there is a large section of hardwoods as of yet un-cut, and some good quality and sizable white pines, so the jury is still out as to the final average cost.

Carl

Lately we have been working in owner build situations. This means we manage a landowner’s woodlot and harvest worst first individuals and process them on site into beams for timber frame construction. We simply price the material comparable to the value from any other sourcing method plus about 20%. This is working very well at the moment. The pay per hour of course varies by site conditions. We simply back into the price for the products delivered to the timber frame processers and pro rate the components to the satisfaction of the practitioners involved. This is becoming a much more popular method than selling raw logs delivered.

We are currently working on a project in Blacksburg, Va. for the Warm Hearth Retirement Village that will use the material to construct a pool enclosure and adjoining buildings.

This does require some knowledge of the markets and committed end users or clients as the market for the services. When one is a service provider (logger, forester, saw mill operator, and trucker) there is more room for pricing of the delivered goods in a truly value added way. We find that many landowners will work with this system for the same reasons they are interested in low impact forestry from the onset. It is about the quality of services, the protection of the natural beauty of their forest and the source story that is a green value for their future use in selling their services or products in the case of the retirement village and achieves the landowner’s objectives as a private home builder.

Anyone interested can contact me through email for more information. I have not visited DAP frequently lately so may not get back here in a timely way to respond.

Good Luck getting started… but the important thing is to do exactly that….get started. All of the experienced and sucessful hands on here got started at some point and have learned along the way. Most are still learning, which is possibly why they are still engaged, certainly is the case for me personally.

I think an important point here is that there are no set ways to do anything and having animal power presents much wider applications and flexibility than conventional methods. Adapting to the situation at hand is a benefit of this culture and being responsive to the landowner’s objectives is important. Educate yourself about the forest and share your knowledge with your landowner’s.

Best Regards,

If you poke around in the archives you’ll find some other discussions on costs as well. Its an important topic we always seem to come back to.

The short, very open-ended answer is that you need to know what your specific costs (expenses) are and what you need to make for a living to then come up with the magic number. You also need to account for depreciation (and hopefully a bit of profit) Horses are tricky as they could be pigeon-holed as a fixed cost, but in reality there are variables according to how much they’re worked in the woods. Number one rule, you do not want to end up buying (paying for) work.

Even though this is sure to spark some heated discussion, strictly from a money & mechanics perspective, logging is logging regardless of the harvesting system. Timber on the stump is felled, limbed, bucked, skidded to the landing, and hauled off on a truck. Some modifications to this scenario might occur such as milling on site, but basically the process is the same.
My perspective comes from owning/running a large mechanical operation in the past as well as skidding with horses.

The huge benefit of horse logging, other than environmental and personal well being, are the low investment and operating costs. Those low costs come with the price of decreased productivity, however, which is relative. The only way the successful large operations make a go of it is through ‘economy of scale’. In other words, the margins are so tight that the only way to generate a profit (let alone pay for all of that iron) is to crank through volume at an incredible rate of speed. At pennies on the dollar it takes a helluva lot of pennies to make a dollar.

That is a cycle that I’m happy to say I’m not a part of anymore. Spent a lot of nights rotting my gut out trying to figure out how I was going to make the next payment on the CAT skidder, feller-buncher, chipper, payroll for 5 guys, etc. I can honestly say I haven’t done that with the horse operation. Hay, shoes, rigging, saw, etc.. are just not issues. Reality is that I sleep pretty damn good because I earned an ‘honest tired’ by the end of the day jumping stumps. Makes me question why I switched from horses to machinery in the first place. Increased volume/production does not necessarily equate to happiness & profitability. Full circle, I’m back to where I want/need to be…

But it still takes money for you and your horses to eat, stay in decent rigging/gear, and fuel/maintenance for your saw & truck. Put a sharp pencil to paper and you’ll answer those questions yourself.

Back to the basics of logging when it involves stumpage; it is all about time, motion, and volume. Given all the variables of the stand, site, & markets you need to have a pretty damn good idea of the realistic average volume you can move in a specific amount of time. Put all of those numbers together including price paid for stumpage and the price you will get at the landing or the mill and you’ll end up with a pretty good idea. With experience you’ll be able to walk in to a stand, and knowing local markets, will know what will work and what won’t.

That’s all based on stumpage. I typically don’t purchase stumpage unless it is a really nice stand of timber. The primary method I use is based more on a service model. The clients I work for are more interested in the health, aesthetics, and ecological integrity of their forest than anything else and are willing to pay for it. Unlike Rick’s area, there is no shortage of these folks in my region especially given the current issues of bark beetles, fire, etc. To the contrary, most of these folks are local neighbors whose small properties I could not afford to move into or justify working on when I had the large mechanical show. So now instead of saying “no”, I can now say “yes”, which makes all of us happy.

The range that I charge is $35-$45/hr. If there is value product generated they can either keep it or I will market it for them or possibly buy it back. The point being that my costs are covered and the owner of the timber maintains the liability through the point of final sale.

I do have to throw out the qualifier that the private forestry biz is not my sole source of income these days, though given the present situation it easily could be. I am also a agency forester, which makes my wife very happy. The agency also offers an awesome opportunity that in the near future will be incorporating my horse operation into that role as well. The agency will pick up all of my operational costs and pay my salary. I’ll be the only “government horse logger” that I know of. I’ll have to buy more horses to keep up with private forestry biz side but I think I can handle that…:D

Don’t quit your day job yet. Work at it hard with every bit of off time you have so that you can establish your personal way of going and have a handle on your numbers. A neighbor’s woodlot might be a good spot to start, and then by all means go for it if it works for you.

Now it’s time to go back to packing for the Maine woods to spend some extremely high quality time with Carl, John, Jim, Mitch, & others. Last time I can remember getting ready for this much fun it almost wasn’t legal…

I wrote a business plan, but within a year I was operating under a different set of economics parameters, bringing value to my livelihood in ways that didn’t add up in the straight line formulas I had used to create the plan. I did however stick with the basic plan for services and operations, just found a different way to support it.

Carl

Taylor is absulutly right you never know what problems you are going too run into I just bought a new horse to incress production and do to problems with the horse its caused me two weeks work! It is allso very inportant that you make sure you have some economical way too transport your logs! perferable your own truck, you dont have too have a big truck a stright truck or bob tail will surffice just make sure that it will pass inspection all that crome and pretty paint dosnt bring in profitts!

Well being like a mule will sure not hurt lol .. love it . Taylor Johnson