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trying to get help dealing with log prices and loggers

Started by Kelvin, February 17, 2008, 10:44:26 PM

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Kelvin

Howdy all,
Well, i've been making my log supply come from various sources all unpredictable and varying.  We had a torando go through near by and have been doing some clean up in exchange for the logs, mostly small lower grade cherry trees.  Fair enough, but i'm trying to understand some relationships to market prices as posted on sites like the "Illinois Forestry market blog" http://web.extension.uiuc.edu/forestry/blogs/eb94/ and similar sites in the midwest that seem to reflect the prices that mills pay loggers when they deliever logs to the mill (or stumpage if stated)  Now what i don't understand is when i contact loggers they of course try to rake me over the coals, just common business practice i guess, but i've met a fellow who says he likes to work with us "small guys"  So i asked him some general prices on odd species and his response is quite high.  Some sassafrass thats been laying around for a year or so  "i get $.50-$.75 a bd ft"  Other non market woods are similar like sycamore, beech, locust and whatnot.  Now from what i see on the mill reports some of these non standard species go for $.15-$.25 a bd ft delievered to the mill.  Does it seem reasonable to pay $.75 a bd ft for year old sassafrass?  Around here the only base market is pallet guys and they, according to the loggers pay $.27 a bd ft, so then why do mills report paying loggers $.15 for anything?  Don't they all have $.27 for a base?  can't they make pallets out of just about anything?
i know i deal in smaller volumes, but if i pick up from log yard and don't interfear with the operation why do they always try charge me double, triple the going rate?  i've never got a decent price from any logger period, am i expecting too much to be within 25% of what mills pay?  i'm not expecting to buy veneer at no.1 sawlog prices, but be treated with respect.   when people come into my wood storage shop to buy lumber i don't fluctuate my prices by 300% to see if i can really nail someone.  am i missing something here?  if red oak sawlog prices are down and i know that the market is paying $.50 for no 1 sawlogs when someone quotes me $1.00 is there any sense in talking further?  I take it too mean they aren't interested in my business, and none of them are interested so far. 
what do you small time guys do?  just wait for someone honest?  i guess i have to do it all myself just like not finding anyone local to kiln dry for me, i do it myself.  cant find anyone to run flooring for me locally so i will have to do it myself, and just like not finding a reasonable contractor to install for me, i'll have to do it myself.  i guess this is how i got into sawmilling in the first place.  $7.25 a bd ft for steamed cherry lumber? don't thinkl so!
kelvin

HOOF-ER

Kelvin, I too have been trying to figure the log thing out. I have yet to get a mill running. ( To much work this winter-go figure?) I have a pile of logs to cut, been drooling over them. Got two phone calls the other day , previous business customers one offered me some walnut, didn't want the trees there anymore ;D ;D ;D sure I "ll  come down and help you with those  ;D ;D  Have been contemplatin where to get wood to saw when the stockpile is sawed. Saw a farmer on the way to work had cut some logs. Walked out to the field and asked about them even though the logs were gone. He seemed very receptive to selling standing timber to me. So I guess I will do some logging. Problem is I am like you , what is a fair price? He hauled those logs -field edge logs -about 35 miles. I think that he got pallet prices $.25? I will be interested to see the responsed to this thread. Has anyone looked at the Illinois stumpage prices would this be fair to pay for small amounts of log- less than TT load? With the grain prices the farmers around here are looking to clean the edges of fields for more light and less moisture competition for the grain crops. I think I could get alot of small loads of logs.
Home built swing mill, 27hp Kawasaki

J_T

Here we been selling tie logs .30bf I keep the best ones . Been having a little trouble selling the large logs 30'' and up  ??? Cherry is down red oak max is .80 to .90bf Come on down and get a load  8)
Jim Holloway

HOOF-ER

Kelvin, Some thoughts on the expensive sassafra, It doesn't matter what you pay for the log. It matters what you recieve for your product. If the price after figure for the loss from rot , sawing and processing covers your fixed cost and ,gives you profit you are comfortable with, buy it. Make notes of what is availible at what cost. If you have a customer willing to spend that amount, more than you think that it is worth , what is wrong with providing? Walking away from a logger, or giving a lower offer sometimes gets you the prices you desire. Everyone is out to earn a living, I can't fault them for trying to earn more. Obviously if you are purchasing on speculation you want the lowest possible price on the logs.
Home built swing mill, 27hp Kawasaki

Firebass

Kelvin,

Here's something you've most likely already tried but I'll mention it anyway. 

Also I am not a log buyer or seller and have never been so my comments are based on my manufacturing business experience only.

Have you tried sending out a mass RFQ (request for quote) in your area?  Or maybe advertising that you buy logs and list your price.  Maybe solicit loggers or the mills on your terms.  To me it sounds like you're fairly aware of a fair price.  I bet you could find someone that would agree to your terms.  When you do find someone you feel comfortable with, write up a contract that makes both of you happy and offer it to them.  There is a certain comfort in having a good contract with another business in which you both profit from.   You can even let them counter propose your offer.  But, the best thing about you drawing up the contract is you buy from your vendor under your terms.  

oh ya,  Always add a option to "re-negotiate the contract at a given time" for example 1 year. 

Steve

Bibbyman

I've never found it very productive to ask a logger what he's getting or what he wants for his logs.  The answer is always outrageous. 

It's best to develop a relationship with larger mills in your area that buy logs from a lot of loggers and know the current prices and ask them.  Then call the logger and tell him what you'll pay.  He'll bring you logs or not.   Most likely not as they tend to stick with one mill until they have a falling out.

Little outfits like ours are pretty far down on the food chain.

Another idea is to talk to other mills and maybe they've got something on their lot that they can't use that'll be just perfect for you.
Wood-Mizer LT40HDE25 Super 25hp 3ph with Command Control and Accuset.
Sawing since '94

Ron Wenrich

Here's the loggers thinking.  He has 15-20¢ in the logging and hauling of the logs.  That's his processing costs.  His stumpage value may also be 40-50¢.  Where are we at on price?

Your arguement is that the large mills are only paying 15¢ for low grade logs, so that's all you should pay.

Well, start buying every log that a logger brings in, and you'll get the same prices.  If you want to pick over a pile of logs, then you'll have to pay premium.  If you want less than a truckload of logs, you'll have to pay a premium. 

Would I trust every logger?  No.  That's why they have log scalers.  Develop your own price list and buy it accordingly.  If you can't get logs, then you know your prices are too low.  Most guys will sell you an occassional load if they are in the area.  They aren't coming an extra 20 or 30 miles if there is no incentive, especially if they are seperating logs.

If you're not selling to the same markets as the mill down the road, I don't know if its fair to think your logs should be coming from the same sources at the same prices.  Loggers know that you charge more for your wood than the local mills, so they figure you can afford more.
Never under estimate the power of stupid people in large groups.

bandmiller2

Kelvin,stay away from loggers and deal with tree removal companys.Most of their logs come from around houses and big mills want little to do with them.They chip anything they can the bigger logs are a problem for them to dispose of.Most are good guys ,their money comes from removal,why travel around trying to sell logs for chump change when they can cut more for good money.They like to have a guy that will take a mixed load some good some crap they can dump it and get back to work.Give em a try.Frank C.
A man armed with common sense is packing a big piece

Cedarman

We have a yard full of cedar logs of all sizes and lengths.  When someone calls and wants to buy some logs, I price them at double what I pay for them.  When you figure my time on the phone, unloading, measuring, sorting, stacking, resorting, restacking and the profit I would make when I saw the logs, you understand why I charge what I do.  Just the stand around time talking with a customer is dollars lost from doing something else.

If you visit a logger at the landing, if he is talking to you, he is not moving wood. Therefore paying a premium for his efforts is a must. You must make it worth his effort to change what he is doing. 

If you know he wants 75 cents for old sassafras, then he probably has no market for it.  You are playing poker now, like it or not.  You offer what you can pay and make yourself a profit. Remember, it is what people do that is important, not what they say.
I am in the pink when sawing cedar.

Bibbyman

We have paid more than we've wanted to for logs we didn't need just to develop a source for logs. 

We use to get about enough logs from local farmers and part-time loggers to cover our needs.  When a new guy would come in with a few logs, Mary would buy them if we needed or could use them or not.  But them she'd let them know what we were looking for and would pay.  Many were only one time customers.
Wood-Mizer LT40HDE25 Super 25hp 3ph with Command Control and Accuset.
Sawing since '94

SwampDonkey

Yeah it's hard to keep a steady supply with a small operation. Even if you present a spec sheet with your grades and prices you probbaly only get a trickle of wood because your not purchasing a lot of volume. If you want good wood and th eloggers have to sort for grade, he has to be compensated. I don't think $0.15 a board foot is going to get you many logs. Now $0.90/bf for #1 and $1.25 for Sel or better will bring you more than you cna afford or saw. A logger doen't doesn't like to be shut off, if he has a load of wood all ready for delivery to your mill yard. You have to develop a relationship with the loggers so they call you before they put up a load to send. You can't possibly be calling everyone to tell them no more deliveries for 2 weeks for instance. They have to call you. Some won't of course and you'll probably loose their business because they expect you to read minds.  :D
"No amount of belief makes something a fact." James Randi

1 Thessalonians 5:21

2020 Polaris Ranger 570 to forward firewood, Husqvarna 555 XT Pro, Stihl FS560 clearing saw and continuously thinning my ground, on the side. Grow them trees. (((o)))

Kelvin

Good ideas guys.  I kinda think its the quality of the loggers in my area.  Everyone is real scared of them, its kinda like transmission repair guys,  and in my area i think they deserve a bit of the wrap.  But, the good ones are probably so busy you don't hear from them.  I can see a real market for someone who would be williing to be somewhat fair.  I guess it is a lot like poker.  They say a high price and read your response. I guess i don't work that way, and i'm a little afraid to get involved with their way of doing business b/c i don't know if they are treating their forests with respect and that is part of my company montra.  It worries me they are doing the same thing to the guy on the other end. 

However, i understand small quantities paying more, and not bothering them.  I just am interested in their non marketable logs, around here... locust, beech, sycamore are all sent to pallet guys, but i'm not sure about this $.27 as the base price as maybe the pallet guys don't buy everything all the time.  I see that the mills pay less than this for these species, but maybe as someone mentioned they might have been part of someones whole package, some veneer, some non-target species.  Oh, well.  With my volume i don't feel like bothering loggers who want to sell the whole woods.  I was just trying to get my foot in the door and intercept some of these non-market species and pay them a reseasonable amount to compensate for their time.  I would think if i was logging a woods and there was a number of trees that i knew the mill was paying me $.15 for i wouldn't mind if a fellow were to drive his trailer to my landing and load those logs on him for $.25-$35  Wouldn't that more than double my profit?  Isn't that good?  Guess i'm not very familiar with how this works so i'll stick to being my own logger and dealing with trees services as was mentioned.  I want to stay small and if i run out of stuff, so be it. 

I do understand the end price vs. what you pay scenerio but sassafrass lumber i've got in FAS and its sat here for years so i'm not dieing to buy some more at 3x's market rate.  THis is ususally how the dealing with loggers on my end go.  THen you have to worry about what grade the logs actually are.  I say "white oak butt logs that are veneer rejects with 20" min dia. for quarter sawing, how much?"  They offer... burr oak with hearts so far off center the log would jump off the mill if quartered for $1.50 a bd ft that the mill would give them $.40 for.

I think il'll stick with farmers and home owners.  Now if i could just hire a trucker with a loader to move some logs for me that would be helpful.  Can't find that either.  Oh, well.  I guess i live too cllose to the city.  At least i'm selling lumber now.  Thanks for all the input.

Kelvin

ely

kelvin, do not get discouraged, just keep talking to folks and eventually you will find someone who does not try and make there whole living off you. i treat everyone the same. i pay .25 cents a board ft for anyone logs that i want to buy. if they do not want to sell them that is fine too. had one guy laugh at me when i offered that for his walnut logs. he said he would sooner burn them than give them away, i told him that they should burn well also. i will also offer to saw on the halves if they are wanting lumber, its all the same to me.
even had one arrogant man say that he would ruin me by not selling me his logs, :D ok i told him. there are a million different type of people out there, occaisionally though all the goofballs come through at once and its hard to keep your head up,specially while treading water in a sea of terds.

SwampDonkey

Yeah you get all kinds. We have one local guy who figures his wood should be the first through the mill gates and if there is a closure he figures his wood should be the last load intt the mill yard. Walks in straight lines in the woods and doesn't need a compass or surveyors. :D
"No amount of belief makes something a fact." James Randi

1 Thessalonians 5:21

2020 Polaris Ranger 570 to forward firewood, Husqvarna 555 XT Pro, Stihl FS560 clearing saw and continuously thinning my ground, on the side. Grow them trees. (((o)))

Kansas

I suspect that .27 cents for pallet is pallet lumber, not pallet logs. At least, I dont know how anyone could pay that much for strictly a pallet grade log. The price we pay is .20 cents delivered for cottonwood, hackberry, etc, and we pay up a bit more for oak-we can run a lot of that as trailer flooring. I know of one mill that pays 10 cents at the pile for anything they deem pallet, which this year is apparently a lot of it. They seem to get a fair amount bought at that price. Other mills seem to be around the 17-18 cents delivered. I would be curious what it is in other parts of the country.

SwampDonkey

$0.15-0.25 / bf here for beech ties and up to $0.35 for smooth beech locally. Some markets might pay up to $0.45 for nice beech.

We don't hvae many smooth beech. Had one guy call for a steady of smooth beech. I said, 'What do you expect? For us to high grade the remaining good beech out of our woodlots for you?'  ::)
"No amount of belief makes something a fact." James Randi

1 Thessalonians 5:21

2020 Polaris Ranger 570 to forward firewood, Husqvarna 555 XT Pro, Stihl FS560 clearing saw and continuously thinning my ground, on the side. Grow them trees. (((o)))

Sparty

Kelvin-
I may be a bit biased because I know the logger you are talking about...But I think your are getting the idea from some of the previous posts that this guy may not be raking you over the coals.  When I talk with him he has the exact same problems that you often describe.  He is always getting "screwed over" by the mills he sells to.  He can never get prices that let him get ahead. Believe me, he is not getting rich by paying landowners for trees, paying for his employees to cut them, paying for the equipment to haul them out, paying to haul the equipment to the site, paying to have the logs hauled out, paying to have the equipment hauled back out and so on.  If he was to charge you 1.25 per foot or more for sassafrass, he still may not be getting ahead.  The amish are giving him more for some logs than the mills right now  The business of logging is a commodities market that is very difficult to figure out.  If his prices are not right for you, let him know.  He is not worth blowing off because you don't like one offer.  Instead of being paranoid, keep talking and trying to make deals.  You may find that he can do some good things for you.  Be inquisitive and ask lots of questions and don't kill an opportunity before it comes knocking.  In other words, he is a good guy, give him a chance.

oakiemac

I get all my logs directly from land owners or tree services. Occasionally I get some from a logger but not too often.
Your best bet might be to hook up with an independent forester and have him send you notices when he bids out wood lots. I get some from a forester that range from 2000 feet to 20000. I'm looking at a woods now that has 1600bf of walnut and 1000 cherry. I then have floorboy log it out for me.
I also have another wood lot that came because the county is making a new 4 lane road and need the trees removed. We are getting about 3000bf of cherry and around 1000bf of oak, 2000 soft maple for $1000. Some of the trees are very nice. It certainly helps to make your name known to people in the right places.
Mobile Demension sawmill, Bobcat 873 loader, 3 dry kilns and a long "to do" list.

Ron Wenrich

Successful loggers don't make their money by logging.  They make it by marketing logs.  Its very similar to the way most small mills do business. 

One of the worst ways to do business is to think your provider or customer is there to hose you over.  If you can't trust them, why should they trust you?  Attitude is half the battle in dealing with the public.

I remember the local paper calling me up when they were looking for subscribers.  "You wouldn't be interested in our paper, would you?" was the way it was presented.  My answer was no, mainly because I don't like the paper.  But, they weren't looking for me to become a subscriber, just by their approach.

Never under estimate the power of stupid people in large groups.

Kelvin

Howdy Guys,

Thanks for the input.  This forum is a great tool for us guys who are learning everything from scratch.  I just wanted to mention that i always keep my doors open when i talk with my local logger guys and i do understand that they need to make a profit like me.  I'm just trying to figure out why the prices i get quoted have no reflection on the information that is published about what mills are paying loggers?  I understand its a few things... my small size (i might grow if i could get decent log supply i could afford) and not being "connected" to the industry anywhere. 

I do think the specific logger i talked with is a nice guy, and i told him i'd be interested in such and such and would like to come look at his logs when he gets them together.  Its just that i've talked with about 12 loggers with the same conversation and have never heard back.  I'll see, this guy might be the one guy who does call me back, and maybe we work something out, but i'm afraid based on the prices i've heard so far, that what the market (what i can sell lumber for, and what mills pay loggers) can't bear what i've been quoated.

I'm sure when i've been doing this full time for 5 more years or so i'll have some good connections.  I'll have to see about paying their price and getting a realationship route, but i can't affrod to have logs that take me 3-6 months till they are kiln dried and marketable, bought at 3x's market rate.

Its an interesting delemma, but so far i've got a trickle coming in and a trickle going out so i guess i'm okay for now.  I'll keep beating the bushes and be open to different options.  But i do worry about my suppliers, if i did find a logger whos prices i could deal with then i have to figure out how hes treating the woods.  I don't want to be a part of someones short sightedness.  I think we need to be careful of more than just the market line.  Maybe once i start selling lumber at a decent amount i could afford to pay more for logs.  I just gotta make sure i don't put the cart before the horse.  I've paid a local logger $2-$3 a bd ft for white oak "veneerr" logs that were pretty crappy and i had to work just to make my money back on them.  That is not where i want to be.  I've paid him a few thousand dollars, more than the market price at the time, and he's never called me back, but he may be unconcerned with that little money.

Thanks all,
good luck sawing out there, i'm off to the woods to haul out storm damaged cherry.  Makes me feel good to that the wood i use was going to be left to rot. 
KP

woodmills1

I am getting 130 per thousand of pine pallet and 160 for hardwood pallet.  At 160 I almost can make more as firewood.
James Mills,Lovely wife,collect old tools,vacuuming fool,36 bdft/hr,oak paper cutter,ebonic yooper rapper nauga seller, Blue Ox? its not fast, 2 cat family, LT70,edger, 375 bd ft/hr, we like Bob,free heat,no oil 12 years,big splitter, baked stuffed lobster, still cuttin the logs dere IAM

SwampDonkey

Yeah unless a logger doesn't want to deal with firewood, it would be more profitable to sell firewood. But, then ther eis the problem of qualities moved and being a seasonal thing and your local market. Won't sell much firewood in an area that used heat pumps.

lets see $200/cord for processed firewood here and 2 cord per thousand, so $400/thousand.  mmmmmmm sounds enticing. ;D
"No amount of belief makes something a fact." James Randi

1 Thessalonians 5:21

2020 Polaris Ranger 570 to forward firewood, Husqvarna 555 XT Pro, Stihl FS560 clearing saw and continuously thinning my ground, on the side. Grow them trees. (((o)))

Ron Wenrich

If you want more information about the Illinois log report, I'd suggest you talk to the folks that give the numbers.  They have their names on there, and with a little investigation, you can get their phone numbers and talk to some live people that actually buy and sell logs for the prices mentioned. 

Many veneer companies also handle export saw logs. They are a pretty high value log, and may be of better quality than your local logger is willing to give up.

The thing that you may not be understanding is that they are giving an averge value for sawlogs that are delivered to their mill.  That includes all the low grade, as well as all the high grade.  You won't be buying a higher grade log for average sawlog price.

We're getting $900/Mbf for export white oak sawlogs, and it doesn't include butt cuts.  At that price, we can't afford to saw it.
Never under estimate the power of stupid people in large groups.

abatol

I'm  thinking about that red oak price I was in the store last week and t&g red oak flooring was 1.69 sqft , number 1 unfinished  red oak from lumber liquidators is 2.69/sq. ft. utility grade t&g $0.89/sq. ft . so it seems there is  a 400 percent profit in retailing that unfinished product so about 200 to 300% wholesaling that  unfinished product that doesnt include  making moulding from scrap, saw dust sales etc. Still I think logs on trade or free are better suited for the small sawmill. From what I see in my infantile view at present, is there needs to be more industry support of the portable sawyers and the portable sawing industry. There seems to be no lobbying for the concerns of the little guy who is doing a tremendous service with a green product . Reducing waste and by doing so improving the environment. Where I live many urban trees end up cut into bite size pieces and go to the land fill .  If you do have your timber sawed you cant use it in construction unless you have it kiln dried and graded by the time you do that its .70 per board foot or more . All these sawmill manufactures need to start a grading agency and train there mill owners in grading . They should either start one and have it respected by "the powers that be" or join a grading agency. Their mill owner can then make money grading and stamping other small mill owners wood. The small mill owners need to put more pressure on their representatives local and nationally regarding  getting these building codes changed to be more inclusive of our "GREEN INDUSTRY" I mean if their is a place for a micro brewery theres a place for us.  I believe WM claims to have 30k mills in operation  . What about all the other manufacturers? As long as the little guy is dis-infranchised  in one area of this industry he'll be treated like a burden rather than a asset by the suppliers of the industry . Because you have to be to creative to turn a dollar. I believe the loggers would make more of an effort to reserve s stock for the little guys if the little guy could be competitive in the end product  across the board he'd naturally be more competitive in log purchasing. Other than that I totally agree about the relationship building said by other already . I am sorry I went off on a tear on this thread. 
It doesn't matter what shape the board is as long as it's a rectangle. Smiley   Stolen Quote Thanks TOM

SwampDonkey

I'm sure any mill owner can take a course for grading and even get a stamp. You just have to have a training school nearby and there is a cost involved. I'm pretty sure that the Maritime Lumber Bureau provides a course. To be sure, they train mostly industrial workers at large mills, but they will train anyone interested. In this instance they may only be training for softwood grading, I'm not sure.
"No amount of belief makes something a fact." James Randi

1 Thessalonians 5:21

2020 Polaris Ranger 570 to forward firewood, Husqvarna 555 XT Pro, Stihl FS560 clearing saw and continuously thinning my ground, on the side. Grow them trees. (((o)))

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