Cost of drying lumber

[red oaks lumber]

den,
 just because your small scale, your drying is worth more than someone else? how does that math work, i deal with people that have 50 b.f. to dry or 5000 bf i'm no different than you. just way more efficent at it. why is it people are upset because i charge less but probably make more money?
 look up the thread wanting to know pricing. you'll see all my pricing ,not very expensive the reason for that is we are very efficient at what we do.
 i started 12 yrs. ago with only a small kiln, since that time have grown into a full on manufacture of wood products, last year i had a appraisal done for the bank, just equipment, buildings no inventory it came in just under $ 500,000.00 total what i still owe is  about $ 80,000.00 my raw inventory runs around 80-100K. but you guys are right i can't be making money!   i am not patting my own back here just showing you by being "cheap" i still make a living. if you guys can stay booked out for months ahead charging that go for it! but if not, price is the reason, not lack of work out there
 if nothing else this thread has been very informative and insightful
 we don't set our price the customers do
. real easy if they buy it's priced right ,if they don't it's to high it's up to you to decide where that happy median is. far as buying red oak i can drive 6 miles up the road and buy it for 1.50 mind you it's not the local lumber yard  but a sawmill selling to the public for that price

[red oaks lumber]

 a foote note: my area of wisconsin in a 30 mile radius there are 11 mills doing what i do, can you say competition

[Ironwood]

Foote note sums it up real well. You have no choice.

 Ironwood

[brdmkr]

It seems to me that we are talking two entirely seperate bussiness models here.  If I brought 600 bdft of red oak fresh  off the saw to a larger operation,  I doubt that they would dry it for what red oaks charges. There is no doubt that larger outfits make their money on volume.  We have a local guy here that runs a pretty sizeable operation.  He charges about 20 cents a bdft to dry.  He will dry small lots IF their lumber is already AD and if he can fit it in with a larger load or if it is the same species and MC as what he is putting in the kiln etc.  If someone wanted 1000 bdft dried right off the saw, I suspect he would send them elswhere.  That is not what he does.  Don't know that for sure though. 

It seems to me that there is a market for drying smaller loads, and when the customer wants a small load dried, he understands that he will either have to jump through a few hoops or pay a little more.

So far, I have not dried a board for anyone other than myself, but I would not dry 1000 bdft of hdwd for 200.00.  I MIGHT dry pine for that IF the customer loaded and unloaded the kiln.

[beenthere]

a foote note: my area of wisconsin in a 30 mile radius there are 11 mills doing what i do, can you say competition

What is your area in WI?

[Ironwood]

Brdmkr,

 Good post was thinking the same verbage last night.

 Ironwood

[LorenB]

This has been a great discussion, especially with the excellent analysis by Scott. 

To help you with your initial question, Charlie, check this link on eBay:

http://cgi.ebay.com/ELECTRIC-WATTHOUR-METER-240-VOLT-200-AMP-ABB-TYPE-AB1_W0QQitemZ130273717432QQcmdZViewItemQQptZBI_Electrical_Equipment_Tools?hash=item1e54eb2cb8&_trksid=p3911.c0.m14

That’s a guy who has electric meters, just like the one on your house, for sale.  I bought one and found that he can take a long time (up to three weeks) to ship it to you, but I eventually got a meter delivered to my door for under $30.  My electrician checked it out and now wants to order some for himself. 

I intend to install this meter on the electrical panel in my kiln building which is under construction.  It will allow me to get a better handle on my costs. 

Best of luck,
Loren

[PineNut]

I installed a personal electric meter at my mill. The electric company while reading meters saw it and tried to read it also. Electric company had to send someone out to make sure it was not their meter. I now have a sign by the meter saying that it is a private meter.

[red oaks lumber]

here we go again .
 i understand small kilns need to charge more. to lower your cost per bf. per month simply dry more wood. case in point i stated my electric runs 800 per mo. last month i dried 82500 bf. my ave is 45000 bf. so by almost doubling bf that brings the cost down.
 to say you will dry green off the saw really means your kiln is slow.back when i had just a small kiln i dried 1 green load, never again
 scott- you say it takes 2 men 6 hrs. to change a charge by hand. what are they doing with their time? my (small) kiln 4000bf. was changed by hand 1 guy 6 hrs. baffled everything, also  why pay someone 15/ hr.for just labor job? arn't there kids in your area?
 somethings i did to cut my costs: put my kiln on offpeak elec. cut by just under half, very few days a year it was off. don't run electric heat use hotwater heat same as the shop.
 built a track and cart system to load and unload kiln, total time to change load 1 hr. also put in a second kiln unit which gives you twice the dryng  power.but the single biggest cost  savings, i won't dry green wood! nature does the bulk of it  and she has never sent me a bill yet.
 i'm not picking on anyone here so don't take it that way, just giving you somethings to think about

[oakiemac]

In my area there is a large kiln outfit that will dry for 150/MBF. But I dont think they will take less then a few thousand feet. I'm kind of with red oak on this as I charge 30-35 cents for smaller orders and for one guy that sends me lumber all the time I chage 22 cents.
There is no way I'd get any business if I charged 50 cents or more.
I pay highs school kids to load and unload or at least I did until the economy tanked. Now I have freinds with small childern that are unemployed  so I have them do the kiln for some cold hard cash. My 3000 bf kiln can be unloaded in 2 hours and reloaded in about 4 using 1 to 2 guys. Average electric cost per kiln is $150/month plus $80 or so to load thats $230. If kiln is got 2500bf at 30 cents I net $520. I know that doesnt take in depreciation and other factors but it does help pay the bills.

I do dry some wood green. Mother nature dont charge but she aint' free. There is no control when air drying and Oak (especially white oak) can check in air dry conditions. Also maple can stain. Most of the time I try to air dry but it is not always the best. In the winter you dont get much air drying anyhow.

[Kansas]

We charge 40 cents a board foot to kiln dry.We air dry all lumber before going in the kiln, to somewhere around the 14-18% range. I'm not sure 40 is enough. Our problem with custom drying is that a customer is likely to bring in an 8 ft log, a 10 ft, a 12. We prepackage and load in the kiln with the skid steer. Normal packages are 10 rows high by 4 foot wide. With custom drying, the packages are usually misshapen and wastes space.

[Charles]

Thanks Loren for the tip on installing a meter. I checked around here and have a used one coming to be installed. Excellent idea, will be able to tell exactley how much hydro was used. That was my biggest concern. This thread has given me a wealth of info. Thanks to all who have contributed and all the different angles at calculating cost. I never thought it would get this interesting. I think I may have about 500bft to dry so it will be 2 loads. So if I get to dry it (which I think I will ) I will keep track of everything  and I will post the results. Should be interesting. It may not happen soon as I have told the customer that I would like the lumber to be air dried to about 20% first because I think the cost may be a little high if I dry it greener. We shall see

Thanks for all the info and any more that may come

Charlie

[Kedwards]

I like .50 cent or more. For me they are really paying for my time and handling.

 Ironwood

+1.  I charge a daily rate, which usually equals out to .50 - .70., depending upon the species.  I also charge for handling on loads less than 1000 bd ft.

In the archives is a post that I made several years ago on this very same topic.  I looked at it from not only direct costs, but also depreciation, return on investment, business taxes, repair costs, labor, etc. 

When I made the investment in my kiln, it was in anticipation of the following:

1 - I would have a positive return on that investment, the same as if I had put it in a CD.  Typically I like to see at least a 10 - 15% return, which means that I should generate 2 - 3K annually in ROI from the 20K investment in my kiln.

2 – If my business had to borrow the money to make the investment, then not only should I see a positive return on the investment for my business, I would also need to factor in the payments on the loan.  Using simple arithmetic, if I amortize 20K over 5 years then I’m looking at 4K per year in payments.  So I’m now at 7K per year for investment return and payments.

3 – A kiln is not going to last forever – it is a depreciating asset.  Thus, over a period of say 7 years my 20K investment will disappear.  I need to recover that money, in addition to my return.  Simply put, figure another 3K per year in depreciation.

So now I’m at 10K per year, just for ROI, payments, and depreciation.  If my kiln stays in operation for 50 weeks per year, then I need to generate $200.00 per week, or $28.57 per day, before labor and operating expenses, just to cover principle, interest, depreciation and ROI.

4 - Next, we have labor costs.  It takes two men several hours to stack, sticker, load, baffle and unload a 4000 bd ft kiln.  As a business owner, not only do I need to recover my labor costs, I also need to make a profit on that labor.  So, if I’m paying two guys 15 bucks an hour, by the time that I calculate in overhead, taxes, etc, that 15 bucks an hour is now somewhere around 23.50 per hour each.  If I want to make 30% profit on their labor, it is now 33.57 per hour each, or $67.00 for the pair.  If they are able to load/unload 4000 bd ft in 6 hours, I now 200 bucks in loading/unloading costs, plus 30% profit.

Based upon a 30 day kiln cycle, that’s another 6.71 per day, for a total of $35.28 (labor and ROI, payments and depreciation). 

5 - Now, we have operating costs.  It seems like on an annual basis I’m spending around 1K in spare parts, maintenance costs, etc. on the kiln .Another 2.85 per day, taking our total up to 38.13 per day.

6 - Next, we have utility costs.  These are going to vary depending upon several factors, including your utility rate, how well insulated your kiln is, and your average temperatures, just to name a few.  Maybe another 6.60 bucks a day if your bill runs $200.00 per month.  So we’re at 44.73 per day. 

7 – If one man spends 30 minutes per day in checking the load, doing the sample boards, etc, then you’re looking at another 16.78 bucks a day in labor (1/2 of the estimated 33.57 estimated actual labor cost + profit), taking us to $61.51 per day.

Thus, if I have 4000 bd ft of 4/4 oak wood in my kiln – dried from green - my costs plus a small amount of profit will be 1,843.30 for that load, or .46 per bd ft.

But what if the load is less than 4K bd ft?  My daily operating costs remain pretty much the same, my depreciation, ROI, and daily labor costs are about the same, perhaps I have a small savings on the labor associated with loading and unloading (estimated 50 bucks for 1.5 hours of time savings), but that’s about it.  It will still take 30 days in the kiln to dry 3000 bd ft of 4/4 oak from green to 8%. 

So if I subtract 50 bucks from the 1843.30 for the load, I’m at 1793.30, divided by 3000 bd ft., or .59 per bd ft.

If you’re drying 100,000 bd ft at a whack, with a kiln that’s heated by waste wood, perhaps you can get your costs down low. 

IMO, the reality is that most folks do not charge enough to kiln dry.  I look at many of my fellow Forestry Forum members with nothing but respect for their hard work and desire to be independent businessmen.  They work incredibly hard for not a whole lot of income, and unfortunately too many end up going broke down the road because they did not charge enough for their efforts.  And the rest of us have to compete with that, which only keeps the prices artificially low.

Scott is right on the money.. Kiln drying and sawing ain't charity work. I charge .60-.75/ bf and a minimum charge for handling. If someone has 100 bf they want KD If there is space,I throw it in and charge them 100.00. On an 8 foot x 4 4 foot sled that is 2.5 layers  or around 20 minutes of time hand stacking..

If they have a 14 foot odd pieces the price goes up or I ask to cut the wood in half.

[Charles]

 
From my previous post of the cost of Drying Lumber, I said I would get back to you when I had the lumber to dry.
I have 300 bdft of 20% Walnut 5/4. I have installed a Hydro meter for exact hydro reading.

Just for your info I keep track of the RH in the kiln with this wet/dry bulb assly. It hangs in the kiln and I can read through a little window







This is the lumber stacked and the kiln ready to be closed
 






This the kiln closed up and ready to start. The meter is up on the right hand side

 



I will be drying to 6%MC  so I will update when the load has dryed and  I know my complete costs

Charlie

[Den Socling]

Charlie,

That is a nice looking hygrometer that you have. Did you build it? It may have one small problem but I'm not sure from the picture. You want the sock to stay wet but you don't want it too close to the reservoir. The water in the reservoir can warm the thermometer and give you a false reading.

Den

[beenthere]

Den
Had the same thought and question. Often there is a small fan blowing across the sock to get evaporation and cooling for the wetbulb reading.  This one looks a little tight.

[Charles]

Well you guys are right it is not working. I changed the water tub this time and it stays stuck at 80 F. I had a smaller tub before and had to add water so I went with a bigger tub. There would be small amount of breeze from the fan blowing over it.
Can you enlighten me with some details as to the amount of wick that should sticking out and maybe the tub is too big. Lie I said before I only dried for myself so I am not really up on the best proceedures.
Any help with this would be appreciated.
Charlie

[Den Socling]

I have been looking at it and trying to figure the easiest fix. More wick should be exposed to the air, that's for sure. It also looks like the wick is too close to the mounting board. In a full size kiln, the wet bulb is either parallel to the wall on mounts which hold it away from the wall or it is perpendicular to the wall for air flow over the wick. What you might do is put some spacers behind the WB thermometer and raise it up and out of the reservoir. When you find the height that the water will wick up the sock, make a mark on the reservoir to record that water level.

[Charles]

Hi Den

I am going to dig up the old platform and tub I used before I made the changes. It worked well but OH NO had to add some water so let's make it better. Do you know of any sites that may give me info on wet bulbs. I may have been a little lucky the first time
thanks
charlie

[Den Socling]

I did a Google search and, of all things, was taken to PC Specialties. But we have only RTD's, wicks and reservoirs for electronic controllers. Searching a little more took me to http://www.partshelf.com/taylor55251.html. This hygrometer looks like it doesn't have too much more of the shoestring wick exposed than your's does. This type of hygrometer is hung on the inlet side of kiln charges by operators who want to check their controllers. It's been a long time since I was inside a conventional kiln and I can't remember how the wick was set up. I'll look through my library. I have read, for example, the air speed over the wick to get an accurate reading. In the meantime, I think you would be fine if you just switched  to a lower dish to expose a little more wick.