Value Adding Forest Products

[Gabe Ayers]

A frequent first step in value adding forest products that start as raw logs is primary processing or sawing logs into lumber or beams. The difference is that when something becomes larger than a 4×4 it is a beam.

We work with a few portable band sawmill operators with our primary one being a fellow named Bob Gill. He is a very efficient operator and highly productive. He has sawed millions of feet on this mill. I think it is a Cook made in Alabama.

Photo attached of one of our small operations. This particular landowner had allot of low grade scarlet oak that needed to come out following the principle of worst first single tree selection. We processed them into fencing boards and siding for the landowner’s use – who after paying .30 cents a foot for selection, felling and skidding and .30 a foot for sawing had .60 in good 12-14-16 foot oak fencing boards. Of course this doesn’t figure much for stumpage or the value of the standing timber, but that value could be offset by having no over the road hauling cost.

The landowner was delighted, particularly when the conventional sawmill was asking .65 a foot at the mill, thirty miles away. His came off the back side of his place. He bedded with the sawdust and gave his slabs to neighbors. We get out around 2000 board feet a day so it works for fair payment for our services too and we don’t have to spend any time in a log truck or money on a hauler.

This is just one example of value adding that we practice. We will write some more about other methods/techniques and systems later.

~

[Carl Russell]

Jason, What would the oak logs have been sold for? Were they pallet grade, or firewood?

The reason I ask is that merely sawing logs into lumber is really not enough to add value. By taking a product that would be basically worthless to the landowner and turning it into competitively priced products, you have added some practical value, but it is still difficult to purely justify it in economic terms.

It is when you take into consideration that there has been value added to the forest asset by the manner in which the work was done, this on-site milling allowing the harvest to be more economically viable, that value can be seen as added to the fence boards.

I’m assuming that if you cut and sold these logs, you probably wouldn’t even get $300/mbf

Quote:

.30 cents a foot for selection, felling and skidding

. With that in mind, it is this added income that allows you to provide the superior forestry services that add value to the product.

In many cases we can process material that is more desirable to some than it would be to the conventional market, but we still have to turn that increased desirability into some financial gain that we can use to make our approach more profitable.

I think that many times landowners are also very happy to see the value of the operation reflected in the product that they have used, such as a board fence etc..

The reason that I mention this is that I think it is really important that we maintain clear focus on the primary product as the improved forest asset, and not the log/lumber pile. I know that you practice that, but it was noticeably absent from your post, with the exception of the mention of the worst first harvest.

Quote:

A frequent first step in value adding forest products that start as raw logs is primary processing or sawing logs into lumber or beams

I just want to reiterate that the first step, in my mind, is to add value to the forestland holding. Otherwise we are just talking about cost.

Carl

[Rick Alger]

Carl,

Would you please give some examples of how you add value to the “forestland holding” while extracting wood, and would you also explain how you quantify that value for the landowner?

[Carl Russell]

One of the most simplistic examples of adding value to a forestland is by removing low-grade stems in favor of high quality crop trees. If Average stumpage value per acre is $25 because of the pulp and fuelwood, when you remove them then the average stumpage increases immediately by math alone, not to mention the increased future value through volume and quality.

The need to develop value added end products are directly related to the fact that timber harvesting operations based soley on removing low-grade are not cost effective of the material is to be marketed to the conventional markets. This is why so much quality sawtimber is harvested before it reaches its best value, forest densities are reduced excessively, and so much low grade is actually left in the woods. There is some preconception that log jobs should always deliver financial gain to LO, rather than seeing the improvement as real and genuine value.

There are many other values such as recreational access, ecological protection, aesthetics, etc. that can also detract from the straight line profitability of timber harvesting, although they have real and genuine value to LO, and as part of land valuation.

When I log, or administer a sale, I figure that the stumpage price must reflect the extra time/care/effort that it takes to perform the improvement. Even when there is significant income to LO, I still consider timber harvest to be an investment in the future of the stand. Therefore I insist that the harvester gets adequately compensated for the work.

The cost of the improvement is always reflected in the primary product, the residual stand. Sometimes it is possible to find markets, such as Jason has described, where having control over the process allows access to purchasers/end users who value the way the timber was harvested, and the rationale behind the management. In these instances we can increase the return so that the added value is more directly reflected in the marketable products.

This is not always the case, and when I am selling logs into the conventional market, the stumpage is typically quite low, but as I said my emphasis is not on the stumpage check, but on the investment in forest improvement. I am not sure that I really quantify this for LO but I definitely qualify it for them.

For example right now I have several jobs going. One is a horse/forwarder operation cutting white pine. This stand is highly stocked with some very nice stems growing with many poorly formed codominants. We are paying $50/mbf for the pine. Actually we are logging at $190/mbf, getting $310 straight through, minus $75 for trucking, leaves $50 for LO. This is very low stumpage for WHP in our area, but we are taking only the poorest formed trees, and releasing the best. LO is obviously concerned about the low market, but we have shown him clearly how his residual stumpage value is increasing in front of his eyes. We are using a large local mill right now, but if we were to market the material for a higher price then the increase would go directly to the stumpage check, as logging cost would remain the same.

I’ll have to wait for more feed-back before going on…. long day…. brain dead.

Carl

[Rick Alger]

Thanks, Carl. I follow you on the value of thinning. I do a lot of it in s/f stands, usually 30 percent removal, favoring spruce and avoiding areas of established regen. Age of the stands around 50 years. Average dbh 9″. Somebody elses prescription.

Now as I see it, there are values in the prescription and there are values in the method used to follow out the prescription.

What would you guess the economic value of the above prescription to be?

What would you guess the added value of accomplishing this by single tree selection with no bole scarring, groung compaction, residual damage etc would be?

Stumpage at say $110 per mbf.

[TaylorJohnson]

Carl,
What is this crew able to put out in a day with forwarder / horse operation ? What do the other loggers in your are get to put wood on the landing ( conventional loggers that is ) ?

[Gabe Ayers]

@Carl Russell 15246 wrote:

Jason, What would the oak logs have been sold for? Were they pallet grade, or firewood?

The reason I ask is that merely sawing logs into lumber is really not enough to add value. By taking a product that would be basically worthless to the landowner and turning it into competitively priced products, you have added some practical value, but it is still difficult to purely justify it in economic terms.

It is when you take into consideration that there has been value added to the forest asset by the manner in which the work was done, this on-site milling allowing the harvest to be more economically viable, that value can be seen as added to the fence boards.

I’m assuming that if you cut and sold these logs, you probably wouldn’t even get $300/mbf . With that in mind, it is this added income that allows you to provide the superior forestry services that add value to the product.

In many cases we can process material that is more desirable to some than it would be to the conventional market, but we still have to turn that increased desirability into some financial gain that we can use to make our approach more profitable.

I think that many times landowners are also very happy to see the value of the operation reflected in the product that they have used, such as a board fence etc..

The reason that I mention this is that I think it is really important that we maintain clear focus on the primary product as the improved forest asset, and not the log/lumber pile. I know that you practice that, but it was noticeably absent from your post, with the exception of the mention of the worst first harvest.

I just want to reiterate that the first step, in my mind, is to add value to the forestland holding. Otherwise we are just talking about cost.

Carl

Thanks for the call out for further defining Carl. I guess I am just a bit gun shy of making a case for more than the straight up immediate value added cash for the landowner, given some mean spirited comments some of my post have provoked. I get tired of fighting against reductionist
marginalization and over simplification of our work.

The logs harvested as worst first from this site would have averaged around .25 or less, per board foot delivered to 30 miles away. So yes there is a clear cash value added from the on site processing and that unfortunately is the first and only value some landowners see or look for, especially in a first analysis scenario. When the landowner uses the value added forest products and they end up being cheaper than they can buy them from the conventional mills, it immediately makes good sense to them.

I think an important point here is that animal powered loggers are competing for access to the natural resources with conventional mechanized harvesters. So that reality brings us to the position of refining our choices of who we work with.

In our case it always includes the concept of whole forest management through worst first single tree selection and what we call Restorative Forestry. The key here is the word forest. If you cut all the big and good trees you don’t really have a forest after the harvest in some landowners minds and that is not what we do.

When the average landowner still sees trees after the harvest and the aesthetic natural beauty of their forest is the highest value they place on their forest, then we have a starting point to educate them about the long term value of the forested inventory and conditions as being capable of becoming a highly gainful, low input, Natural Capital System or a biological bank – that they own. The logic would be if you own the bank then why rob it? Of course this doesn’t follow what the big bankers have done and continue to do through bonuses – I digress, sorry

As we always say “it is what you leave that is more important than what you take”. Given the current demographics of forest landowners in the eastern U.S. being that the largest condition or greatest percentage of forestland (70%) is owned by private people in tracts of 10 acres or less we have a perfect opportunity to expand our cultural practices over a larger portion of the overall land base, yet on a community by community basis. What was once recently only acknowledged as a niche is now in many cases a method of choice – in our forest type.

We are totally dedicated to this concept of whole forest management and restorative forestry. The education of the landowner as to the value of the residual stand in a highly improved condition is an undeniable added value from this cultural treatment. You just have to find landowners that have that vision although it may not see much further than their own backyard or driveway. That’s far enough for us to define our work as superior to their achieving their objectives.

Once a landowner owns these values for their woodlot, we reach a point where investing in their forest improvement may be done by adopting the restorative forestry approach, meaning not getting the immediate return available from high grading of clear cutting.

Part of our job as a forester and logger dedicated to sustainable practices is to educate the landowners as to the increased value of the practices we employ. This of course includes the rapid increased growth rate of the best specimens and species left to respond to the release provided by a worst first type thinning (see attachment). As Rick suggests these increased values are much greater when sensitive selection, felling and extraction have been applied. There used to be a web site constructed by a now deceased forester name Karl Davies that describes this with numbers very well. I am not sure if it is still up. We have his charts and spread sheets saved and print them out in hard copy for landowners that want those kinds of numbers to support their decision making.

There are also other examples such as the Menominee Forest in Wisconsin and the Pioneer Forest in Missouri that prove that over the long term highly skilled worst first single tree selection and low impact
extraction will make the most money.

I think an important point here for us is the convincing of the young practitioners that they also own the condition of the residual forest. In other words if they leave those best trees now they will have the option of harvesting them in the future. We have been doing this for a relatively long time in human years (30+ years), but a short time in the lifespan of climax hardwoods. But the point is they do own their practices with a clear vision of them being able to access that natural resource in the future as the proven superior practitioners when man ages the forests.

There are all sorts of other values added from restorative improvement styled forestry. They may not be immediately rewarded with cash, but fortunately that is not the value expected by some landowners and that is who we will work for.

Some anecdotal evidence presented through our long term involvement in this form of forestry includes many landowners that have approached me after they elected to have conventional loggers work in their woods and said that they deeply regretted making that choice, because firstly, they didn’t make as much money as promised and second their woods were devastated in the process -their words.

Another problem is telling prospective clients where they can see some of your previous harvesting activities. We have one site on the roadside that we have harvested four times in my lifetime and we send folks there to look at what the forested conditions look like after a harvest. Repeatedly they call back and say “hey man, I drove down that road to where you said you had cut timber and I couldn’t find the place”. That is exactly the point, you can’t see where we worked last because it doesn’t look like what most folks think of how a logging job looks. This has lead us to funding the creation of signage for our HHFF trained practitioners. We post a permanent sign on these roadside woodlots that states the date of the last restorative harvest, name of the landowner and the practitioner, along with a HHFF and DRAFTWOOD logo and contact information. Seeing is believing and this approach has added to our waiting list of clients.

I hope this helps with supporting the added value of superior forest management, sorry for not elaborating further initially. There is much more to the forests than the trees. Maybe we will all get to write more about those values later.

Note: if u look at the photo you can see the mark at 1991 when we released that tulip poplar the first time. The growth rate increase was 300% for about 8 years. That’s when we thinned it again. This stand is now a poplar cathedral with a canopy height of around 75 feet, a 18″ DBH and still growing fast. The larger holes created in harvesting bigger trees are often being filled with NRO, refuting the shade intolerant myth.

Sincerely,

~

[Carl Russell]

Rick Alger;15261 wrote:

Thanks, Carl. I follow you on the value of thinning. I do a lot of it in s/f stands, usually 30 percent removal, favoring spruce and avoiding areas of established regen. Age of the stands around 50 years. Average dbh 9″. Somebody elses prescription.

Now as I see it, there are values in the prescription and there are values in the method used to follow out the prescription.

What would you guess the economic value of the above prescription to be?

What would you guess the added value of accomplishing this by single tree selection with no bole scarring, groung compaction, residual damage etc would be?

Stumpage at say $110 per mbf.

Rick, the way I see it, the work requires an investment. If, as you say, the prescription is truly an improvement, or restorative in Jason’s words, then performing it should have some value, then also there is the value of the way in which it is applied. For me to ensure that this expectation is met, I have to be able to make at least $250-$350/day.

Looking at all the factors that affect my ability to pull off the prescribed work, I determine how many MBF I should be able to average, and price it accordingly. Unfortunately as so many of us have mentioned, we do not as a general rule have the ability to just find a market that can immediately compensate the landowner for that investment.

Typically because of that even though the stumpage value of the residual stand would increase, it is difficult to find markets that will support that. It is similar to pruned stems. It doesn’t matter if you have 8″ of clear wood, most conventional mills will not pay extra for that. This is why these value added markets are so important for us to develop.

If I need to harvest for $200/mbf, and the logs are worth $270/mbf – $40/mbf to deliver, then stumpage is $30/mbf. If the average local price is $70/mbf, then the $40/mbf difference is added value. But I’m not sure that it is easily added on a per mbf basis. It is better accounted for as a lump sum value added to the stand, and spread out over the future growth of the growing stock. It can also be used to represent that values that the LO desired, aesthetics etc., and amortized over the tenure of ownership. These are not typically values that can be recooped in the short term.

We have been trying for several years to pull together an effort between AP harvesters in NE to direct material toward some cooperative marketing efforts. This will be the most expedient way for us to realize that added value for our LO’s.

I like your idea that the residual stumpage could have a set value based on the improvement. I am totally behind the idea of setting my own price for material I produce, or grow. When I was a kid there was a tale about the old logger up the hill, who back in the day had several crews working for him. Some mill owner tried to under price him because it seemed he had so much wood to move that he would take the price. Instead he bought a sawmill himself, and started to saw the logs on his farm. The mill owner came back and paid the asking price, and my neighbor never ran his mill again, other than to saw his own or for neighbors.

I see this discussion being a big part of how we all interact as a broad regional group/network. For animal powered forestry to support itself, there has to be a growing market for the material produced from the methods and practices that we promote. Similar to SFI, when the market pays extra, then the work will be supported. Carl

[Carl Russell]

TaylorJohnson;15262 wrote:

Carl,
What is this crew able to put out in a day with forwarder / horse operation ? What do the other loggers in your are get to put wood on the landing ( conventional loggers that is ) ?

This crew is putting out 2mbf/day. This is big pine with one 16′, or 2 12’s, or a 16′ and a 12′, with big tops that we are leaving lopped in the woods. They are doing a single tree selection, which would be virtually impossible with a skidder.

The $50/mbf is about half of the going rate for WHP in our area, but as I said, if a skidder were in here, they would either have to pay less because of the handling of short logs, in tight quarters, or they’d be pulling full tree, cutting too many, and damaging the rest.

Carl

[Gabe Ayers]

“For animal powered forestry to support itself, there has to be a growing market for the material produced from the methods and practices that we promote. Similar to SFI, when the market pays extra, then the work will be supported.” Carl

I couldn’t agree more, this is why we established the source differentiated identity of/with DRAFTWOOD. People will pay more when they know the source and like the method of sourcing – the whole picture, silvic’s, the mechanics of animal power and particularly being local. This DW program has been in existence long before SFC, which of course predictably prompted the industry green wash of SFI. I sat on the advisory board in D.C. when SFC was started by the Rain Forest Allinace. They are not about bottom up change.

We just have to keep telling the story and some will hear…
maybe a forest of dreams kinda thing… a play on field of dreams, if you will – if you build it they will come… except, this is no fantasy or dream. It works – people like the story and like being a part of it. They want to be connected to the natural work and our products surrogate that desire.

Ok, so if they will pay more then how much more. Well just make the price what you need to make a living. Your cost of being the best at tending the whole forest is the price. It’s like wood parity, bottom up economics, ecological capitalism.

I truly believe this is the right thing to do.

This is a great cyber segway into a more formal introduction of the DRAFTWOOD brandname to the larger community. More later.

~

[Carl Russell]

Joel;15303 wrote:

If one is thinning simply to promote an increase in mean annual increment (mai) then you are already behind.

Read any silviculture text… one thins to increase the value of the resudual stand.

Any large increase in mai could change the strength characteristics of the wood.

It is always nice to have a plan. If one can enter a stand early enough good forest practices can occur.

Everyone’s definition of good forest practices is different.

This is exactly right Joel. I’m sure that you have seen it too, but as a rule around our region foresters don’t really adhere to these general principles. Most forestry that I see in the NE is timber sale administration disguised as silviculture. Most timber sales are merely crafted by foresters to harvest marketable material, balanced against a bit of low grade to appear to be “improvement”, but generally are more like hiring an agent to find the best markets for the available timber.

There is a general understanding that that is what you have to do to practice forestry. Try to steer the boat in a more favorable direction as the current of industrial forestry takes you down a river you didn’t choose.

I don’t think there is any misconception that this is real forestry. But the public sees college educated foresters practicing this way, and they swallow it hook, line and sinker.

What we are talking about is the perfect opportunity for animal powered timber harvesters to grab the high ground. To show that we know, and practice, the basic principles of forestry. Show how animal power is ideally suited to this kind of work. Let the mechanized harvesters continue to over-cut, and leave stand in basically the same condition, in terms of quality, or worse than when they got there.

We can be honest about the true cost of improvement harvests. The reason mechanical harvesters have to take the hide with the tail is because modern foresters tend to be afraid to tell a LO that it will cost them to remove the low grade to improve the lot, so they throw in a bunch of the good stuff to make up for having to cut the crap. The problem is that there is an image that mechanical harvesting costs less than horse logging, precisely because of the type of forestry being used to support it.

It will be hard to change many minds, but since we log with animals we don’t have to find that many. And if we can work out some mechanism so that as a group we can demonstrate that we are all producing material from enterprises that adhere to the basic principles of good forestry and low impact harvesting then we can begin to capitalize on that value we are bringing to the process.

Carl

[mink]

carl , i know this isnt horse logging related but do you have any idea what those tractor loads of chips get in vermont or northern new york? mink

[Carl Russell]

mink;15339 wrote:

carl , i know this isnt horse logging related but do you have any idea what those tractor loads of chips get in vermont or northern new york? mink

Nope. I have never had a chip job, and truthfully I don’t run with that crowd to be in on conversations about that. I do know that it isn’t a lot.

Carl

[Rick Alger]

I have worked on a chip job, but I don’t recommend it. The loads went out at about 35 tons. The logging company got $28.00 a ton. Not much value added there.

[PhilG]

In colorado for the last 15 years or so, I have not had to cut a “live” tree, there have always been plenty of dead trees, blowdown and fire kill ( worst first ?) . I got into logging ( scavenging would be more like it) and sawmilling just to supply my own building comany and get away from trucking everything in from 2000 plus miles away, support the local economy, have faster turnaround, total quality conrtol…just comon sense. I agree with adding value anywere you can, trees they use to stuff in a dumpster and take to a landfill I would pickup with my short self loader, peal or saw it, grade stamp it, and sell it back to the local contractors. We have been wasting so much in this country for so long it is catching up with us, we need to get those 30 portable sawmills back into the countrysides, along with 60 horses, and take back our economy. I called a guy to skidd some logs to a building lot and he wanted $250 an hr, seems like 4 guys and 4 hourses could work for that, do you think ? and do about the same amount with much less impact and pollution.
I think a large part is educating people, architects, engineers and designers to use what is available to us, ( worst first….beetle kill..) instead of bringing in stinkin bamboo flooring from across the world or using coastal Dug fir inland just because it has some how become ” the standard” for every piece of structural wood, why not standardize 3 x 6 Lodgepole Pine, Spruce or Aspen instead ? There are millions of dead trees from the whole lenght of the Rocky Mountains that would fit the bill for this purpose. People need to change their attitudes, and fast, we need to help them, none of the people I have timber framed for could tell you the species of three different timbers you lay in front of them, yet their plans call out #1 free of heart center dug fir from clrear cuts in the North West!
I think there needs to be a healing forest foundation in every state of our union.
thats my 2 cents
Phil
http://www.handcraftedlogandtimber.com

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