How is everyone selling logs?

[JaredWoodcock]

I am interested in how draft loggers make money. It seems like most of the workshops revolve around either the animals or silviculture. Im a wildlife ecologist and I have a working sense of silviculture, I am comfortable pulling logs out of the woods with horses, but how do you learn how to turn that into a profit? (other than firewood)

Where is everyone selling their logs?

It is like farming, everyone wants to learn the latest techniques for producing but rarely cover how to make it profitable.

Looking forward to hearing from you

Jared

[Carl Russell]

Jared, there are several ways to work at it. Generally we have a bit more flexibility in markets than farming, but the markets for sawlogs are basically controlled regionally by competition between buyers. You can find buyers who will move one species more than another, so they may be able to come up with a few more bucks than others. You can also find niche markets that may add a few bucks.

The bottom line though is that you are competing in a production world. Log buyers want a lot of what they want, and they want to buy it for as little as they can get away with. Meanwhile landowners want as much money as they can get for their timber. This leads to operators finding ways to produce as much as they can for as little cost as possible. This is extremely difficult to do with horses.

Most of the logging business is conducted on a piece-work basis…. In thousands of board feet (MBf). Generally stumapge, (the value of the logs standing in the woods… On the stump… ) is purchased from landowners, and after logging the logs are sold to a mill. The profit is in the process between stump and mill. You can buy high, log for low cost, and sell at the going rate and be profitable. The challenge that crops up is that low logging costs generally lead to compromises in the residual forest, in terms of ecological resiliency, access, and even future timber value.

With animals we really cannot compete in production, which is why many of us are focusing on the silviculture, because once under way it really doesn’t cost us any more to focus on workmanship than if we try to cut corners, thus shifting the focus to the potential value of increased logging services costs.

I personally have always logged as a forest improvement service. Rather than “buying” stumapge, I set a straight through rate of logging, say $200/Mbf, and then subtract that from the market value of logs sold. That way I can make a profitable wage, I have provided a service of improvement, and the LO generally have found that in the end my stumapge rates have been reasonably competitive enough to justify the added cost of working with me.

Profitability however is a strange and personal thing.i personally have a take on it that is more holistic, and I have used my skills and capital investments to secure a livelihood in which my personal expenses are quite low, so I am not forced into competitive arrangements, and I draw “profit” from a wide array of enterprises…. So you can take my perspective however you want.

The bottom line is that you need to find some way to make the operation pay for the cost of stumapge and logging, and it doesn’t always come down to numbers. You can buy low, sell high, be profitable, but make a mess, or any number of variations. You could have a great financial opportunity, and not be able to capitalize because you work over yourself in the woods because of inexperience.

It really is not a simple equation of trees, money, and horses. Much of it comes from paying dues…. Making mistakes…, making relationships. I personally had quite a bit of conventional logging experience before I started with horses, so felling, bucking logs, and marketing were already part of my vernacular. Even so, I had to work at a minimal profit level for a few years because my skills of using horses in the woods were weak.

So the basics are, find a woodlot, determine the residual stand, find a market for what you are going to harvest, get reasonable estimates of the value of those logs and what others are paying for stumapge, and work out a deal to get started. Once you get under way you should find those points in your formula that need to be addressed. Maybe you have paid well, but your saw work needs to be more proficient…. Maybe you need a different arch…. Maybe you need a crawler or tractor for the landing and long skids…. Maybe you need to pay less, or sell to someone else.

There are a lot of moving pieces, so it is hard to really hand someone a formula for being profitable. However, I feel that without basic forestry and horsemanship skills profitability is less likely….. I also believe that forestry is based so much on judgement, and we are so focused on finances as a culture, that judgement often is only as good as how profitable it is, which compromises the underpinning of good forestry…. So it is a personal thing with me to get people to step up to the conservation plate and bring judgement and morality back into land-use activities….. And to be profitable in that regard requires a whole other set of qualifiers…..BUT I do know that animal power is a smooth fit”..

Good luck, Carl

[Carl Russell]

Seems my autocorrect thinks stumpage should be spelled, stumapge….. 🙂

[JaredWoodcock]

Thanks Carl, I am more in the back of the envelope planning stage. I am a third generation “living on a little less than less” so I can relate to your definition of profit. My father managed our 60 acre wood lot and I learned to fell trees, limb them, and buck them up when I was about 5 years old. I started with a top handle trim saw (after graduating the axe) because that was the smallest saw my father had. Not saying I know it all but I am comfortable running a saw and I have some game of logging training. My knowledge of selling logs is minimum. I have a good relationship with my local saw mill, and we have 2 log yards close by plus a pallet mill about a half an hour away, but that is as far as I have gone for marketing research.
I like the idea of managing land owners small wood lots. Our farm and family have a good reputation in our community so I think I wouldn’t have a hard time marketing myself to landowners. I have a long way to go before I get to that point but I need to make it work on paper before I bite off another business on top of the farm.
We had to move from the farm we were leasing this spring because the landowner fell off… After the move I sold my horse to a friend that has a market garden because we had to scale down, now that we are settled I miss having horses around and I am basically just trying to justify a new horse or team…. I keep getting reminded that it is a bad idea but my wife is ok with me spending money on mountain bikes and rock climbing equipment, haha

Is anyone else doing any creative draft logging marketing?

Thanks again
Jared

[Does’ Leap]

Hi Jared:

You might also consider selling firewood. I cut 23 cords last winter and hired a wood processor to block and split log length wood. He loaded the processor with a boom on a log truck, conveyored the wood into a dump truck, and dumped 3 cord loads wherever I wanted them. He charged me $52/cord ($50/cord plus some for trucking). When I consider my labor, fuel, and equipment depreciation, I cannot touch this price doing it myself.

I advertised 3 cords (pick-up only) in Craiglist for $600 and sold it within a few hours. Not bad for non-seasoned wood. Essentially I was paid $148/cord on the landing (i.e. no trucking) and never had to touch the wood. If you figure 2 cords = 1 mbf (can someone confirm this figure?), I was getting paid $296/mbf after trucking. This is considerably higher than what I average for hemlock logs after trucking (about $260/mbf) and is more than double the price of log length firewood on the landing ($70/cord). I think the price of log length has gone up considerably since then however.

The added bonus is that this is all low grade wood and I have a lot of it. A somewhat profitable firewood enterprise also fits nicely into the the model of horse loggers as silviculturists.

Good luck.

George

[JaredWoodcock]

I have done firewood in the past but I never hired a processor, thats a good idea, I still would like to find some creative markets for small volume sawlogs (but I guess so would everyone else)

Thanks

[Rick Alger]

Very occasionally I’ve sold wood to local craftsmen – a cabinet maker, a snowshoe maker and a hand-carved axe handle maker. I’ve sold poles for clotheslines and dog runs, and I’ve moved rough-sawn logs for cribbing and shoring. None of these deals were particularly lucrative. Also, I have friends who have sold wood to canoe makers, hot tub builders and a violin maker. But again the volume was too small to be significant monetarily.

Like Carl said, most of your volume will have to go to commercial mills for commercial prices.

The “forest improvement” model that Carl uses is the way to go I believe.

If I were younger, I would get a forester’s license and write forest plans for landowners that would hopefully require the kind of forestry I could do.

[Carl Russell]

Wow George, that is some breakdown….. how does that figure in estimated dollars per day, or dollars per hour for your woods work?

I would be really interested to find out if that guy would do that again at that price. Most guys I know operating processors are looking for more like $100/cd processing and delivering.

There is no doubt that any handling of the raw product prior to processing is a great profit center to focus on. On-site fuelwood, or lumber production eliminates trucking the product to either end user or processor. Also on-site processing is the best way to maximize yield, as log-length truck loads of fuelwood must have more wood on them than they are sold for (actually the only way to make sure estimates are legally substantiated), and on-site milled lumber can have nearly 20% over-run compared to stick scale at destination sales.

Carl

[Does’ Leap]

“Wow George, that is some breakdown….. how does that figure in estimated dollars per day, or dollars per hour for your woods work?

I would be really interested to find out if that guy would do that again at that price. Most guys I know operating processors are looking for more like $100/cd processing and delivering.”

Hi Carl:

In terms of dollars per day, I figure I pull an average of 1.5 chords/day. As you know, it depends on the length of the skid, accessibility to the trees I am cutting, snow/ice conditions etc. At 1.5 chords, that would bring me to $222/day for gross income. I haven’t really done an enterprise budget for my horses as their use is spread across our farming operation. To arrive on daily dollars/day I would need to take off feed, teeth floating, trimming supplies, vet, barn and equipment depreciation, etc, etc. You ever crunched the number on your horses? Irregardless, it is a good return on my labor considering the improvement to my woodlot and the pleasure I get from working my woods.

In terms of him doing it again at that price, I expect so (provided the price of fuel remains the same). He only lives 6 miles from me and he said that he could only do it in April when he is locked out of the woods. If there were a critical mass of horse loggers in one area, a joint investment into a processor and/or a mill might be worth considering.

How is your new(ish) mare doing?

George

[Carl Russell]

I have broken down my horse expenses over the entire enterprise, and when I was doing a larger percentage of logging, I found it to be just about the same. I keep track of all horse expenses and from time to time I keep track of production numbers, to come up with a general working average like you have.

Generally speaking I have found that my horses cost me about $5/day year round, so when figuring profit centers it is important to keep that in mind. whether I make $200, or $300 in a day from logging production, that cost doesn’t change. There aren’t too many investments in production enterprises that will actually represent such a small percentage of operating expense.

When thinking about increasing return on investment from logging it is really difficult not to think about some piece of equipment that can ultimately increase production, like a crawler, or tractor, or forwarder, but all of those things have costs directly associated with production, and those costs are much higher than horses. These factors ultimately lead to relying heavier on the machinery as those carrying costs exist whether they are used or not, and most generally they are recouped best by using the equipment.

However, looking at enterprises such as fuelwood processors, or sawmills actually add value to logs outside of the operation and take advantage of the low expenses of the horses.

I was talking to a logger friend of mine today who says that a local fuelwood processor is paying $50/ton, @ about 5400lbs per cord that is about $135/cord. That comes down to close to $100/cord on the landing. The processor is then selling split green wood for $300/cd…. another is selling it for $275/cd delivered.

The deal that George has going with his neighbor is sweet, and one of the benefits to small low cost enterprises is that we are not backed into a corner to just move wood, so we can look for those sweet deals…

Carl

[Brad Johnson]

I just recently updated my horse expenses on a daily and annual basis, and my team is costing me $3.25/day. That includes 400 bales of hay, grain for the year, one vet visit for coggins/teeth/vaccinations, and shoeing supplies (I do my own). At that cost, the logging I do generates $40-50,000 a year in gross income. The net is considerably lower, and is tied into the other enterprises on our small farm (small scale livestock, sheep shearing, and workshops). That amount does not include infrastructure costs such as harness replacement, equipment repairs, but these costs usually do not amount to much as I do much myself or can get the work done at a reasonable price. The place that costs really get you is larger equipment buys like truck and trailer. Of course, I use the truck and trailer for many other purposes, such as moving farm livestock and equipment, but they are costly nonetheless.

Marketing wood products I produce in the woods has not been difficult lately. Hard and softwood pries have been up this year, as has firewood. I do not process any firewood, except for our house, but it has been selling here for $1200-1400 a load (8 cords). I pay $225 a load to truck it, so the margin on it is good. I can move at least 2-3 cords a day on my own (more when we both are in the woods with teams and tractor), depending on the skid distance, wood size, and ground conditions. That said, last year Bob and I moved about 450-500,000 bf of logs and firewood, but only about 100 cords of that was firewood (and still less pulp – just three loads).

I agree that the silviculture I am promoting on the ground is the most important part of my work, and it is what gets us the jobs in many cases. We absolutely cannot compete with mechanized guys in terms of cost or efficiency, but landowners with a long term perspective stand to gain significantly over time as our work promotes future value as well as ecological goals in their woods. We do use two teams of horses as well as small tractor with a winch, and the addition of the tractor makes us far more profitable. Also, it allows us to use the best tool for the job, whether it is working off the stump for stems that are hard to reach with the horses, forwarding over longer distances, or piling wood on the landing. I estimate that on some jobs I spend about 20% of my total time handling logs on the landing, and the tractor is perfect for that job. I have heard it said more than once by different folks that every animal logger should have a small piece of machinery, and I agree.
-Brad

[Will Stephens]

The firewood option is of great interest to me. Producing firewood is not currently an option for me where I live (a small island 30 miles out in the Atlantic with few trees on it). I have done some considerable calculus on firewood production in doing research for a potential move to off the island and ways to make a living in rural New ENGLAND and get to work with draft horses. CRD is a family owned and operated (father, son, wives, and a few employees) manufacturer of really nice processing equipment with great customer service that is located in Williamsburg Massachusetts making portable machines that are much less expensive than other comparable machines. There are many options of machines and features but a reasonable calculation for a 2-3 cord per hour capacity portable machine with lots of wiggle room and depending on your local market is 700-1200 cords of production (not logging cost) to pay for the machine. That’s not very much and if 2-3 people are close enough to make it reasonable to share purchase and maintenance you could have a very nice and dependable income stream. This seams to be real value added produced from a silviculturist (real word?) horse logger’s most likely raw material of logs considered marginal for sale to lumber.
Scale and politics always enter our decision making process but if this fits your goals it is worth pursuing.

[Author]

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