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Common Logging Costs

Started by Lucas P, May 17, 2011, 04:38:14 PM

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Lucas P

Friends,

I'm new here in the FF and in the forestry industry as well. What are some common costs one can expect when logging?

tlandrum

you can expect break down after break down after breakdown
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Lucas P

tlandrum,
That I have seen on TV!  :D

Maine372

what are you trying to do? ill write this from a cable skidder/hand felling perspective.

you gotta buy a machine, you gotta buy some standing wood, you gotta buy fuel and grease, youll probly want a chainsaw, or two, or three. until you learn not to stick them in the tree or run them over. that brings me to spare parts, repairs and replacements.

now you better have a place to sell that wood, so youre gunna need somone to truck it there. unless you do it yourself, which brings more fuel, grease and repairs.

dont forget insurance, and savings for the lean times, and profit, dont forget profit.



how big each of these numbers is determines whether your a hobby logger, a professional logger, or a former logger.

treefarmer87

i agree with tlandrum, whenever you turn a driveshaft, swing the loader, run a saw, etc its wear n' tear. FUEL and fluids are a biggie also, its according to what you are going to be doing also :) good luck with whatever you do
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clww

Welcome to the Forestry Forum!
One way to know about costs that may be useful is watch the current TV show, "Swamp Loggers". Every time all the machines are working, something else breaks. The more you make, the more you spend.
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Autocar

If everything is working like a dream my logging cost will be twenty cents a bd. ft. I figure ten cents for my truck and ten cents for me cutting and skidding. But like every one else has said repairing equipment on the job will eat you out of house and home  :D
Bill

a old timberjack

very , very, true auto car, very true!!!!
H.T. LOGGING and Trucking, llc, GREENE, Rhode Island

Mark K

My biggest costs are fuel and insurance. As of tax time this year in one years time I spent 12.5k on fuel and 5K on insurance. I'm a one man operation with a skidder, a bunch of saws and a pickup. When things are good I make a decent living. Since fuel has climbed it's been tough but I've learned to get by. Also have to be prepared for down time from the weather. Last week was the first time I've been able to work in four weeks! This week has been a washout so far. Good maintence will keep down time to a minimal. Spare parts on hand are costly but well worth it in the long run.
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cheyenne

Well I only cut my own property for my own use. Last week I layed in supplies for the summer...1000 gals diesel fuel....$ 3,000, 500 gals gas.....$1,500, 100 gals hydraulic fluid....$1,400....2 cases bar oil $120.....spare chains $250 & who knows what else...I have over $100,000 tied up in equipment..... I think you get the picture....I would take a real hard look at  your plans...The only people I know making any real money in the industry today are the companies doing the line clearing for the utility companies...In fact their in my area now & they have all new trucks & chippers. Whatever your decision I wish you all the best.......Cheyenne
Home of the white buffalo

Lucas P

Quote from: cheyenne on May 17, 2011, 11:13:17 PM
Well I only cut my own property for my own use. Last week I layed in supplies for the summer...1000 gals diesel fuel....$ 3,000, 500 gals gas.....$1,500, 100 gals hydraulic fluid....$1,400....2 cases bar oil $120.....spare chains $250 & who knows what else...I have over $100,000 tied up in equipment..... I think you get the picture....I would take a real hard look at  your plans...The only people I know making any real money in the industry today are the companies doing the line clearing for the utility companies...In fact their in my area now & they have all new trucks & chippers. Whatever your decision I wish you all the best.......Cheyenne

I actually work for a company that does many transactions with loggers. I'm working on a project to understand our customers a little more and identify their needs and wants. So any information you could share regarding costs or threats to your operation would be greatly appreciated.

mad murdock

As far as threats go, the biggest threat is government over-regulation, but that is a conversation for the restricted topics area.  Fixed costs, are the same in the aspect of forestry I am engaged in now working for a helicopter operator supporting forestry, as when I was a logger, and still am on my own tree farm.  Fuel (oil and grease), Equipment maintenance/parts, trucking costs, unless you got your own truck, and the most important factor is selling price of the product you are producing.  That last item, the price of what you are selling, is the single most important factor on what a guy does in the woods.  Northwoods1 is a great example of someone who has a good read on the pulse of what sells (for enough to be profitable), and what doesn't, so he can be flexible in his operation to take advantage of the available market in his area, and make the most for the time he puts in each day to turn a buck.  Autocar's operation from what I understand of it, is another good example of that same flexibility.  The guy who focuses in on one market is the guy that gets hurt the most in the woods, when the market takes a dump, unless he is in a real niche market taht is very stable, IMO.
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PAFaller

Everything said so far is on target, but there are a few I haven't seen mentioned yet. As was said the independent logger has a machine, a few saws if he is hand-falling, a pickup to get to work, possibly a log truck etc. And if you are buying your own timber you have stumpage costs. Along with that you also have a construction cost. Jobs where  a landing is already built and is flat enough you don't need roads are few and far between here in the mountains of PA so you have that cost as well. Thats usually deducted from what you pay for the stumpage...but... if you have to buy the stumpage up front, do the construction before you can start logging, that can make cash flow real tight. If you use a line of credit or some other means of financial help along the way you have the cost of interest. Very few businesses can operate 100% out of pocket so that needs to be taken into consideration. As was also stated maintenance items and general wear items never seem to get cheaper. I just priced tires for my machine, show special was 2200 per tire. I am going to wait a while, been a rough wet spring like Mark K said, and markets are still unstable.
Along with log hauling costs there are also equipment moves. Bigger operators usually invest in trailer to move, but being a one man show I haven't gone that route. Average moving cost is 350-400 dollars. May not seem like much but over the course of a year, if you move even 5 times you are looking at 2000 dollars give or take.
Regulation and government was also mentioned. Here it is local municipalities posting roads to restrict truck traffic and holding operators responsible. Just getting the wood out can now costs hundreds of dollars in the extra insurance needed to haul on these roads, and that does not count the time it takes to deal with the paperwork. If I am on the phone trying to set up a job I am not cutting wood, and if I'm not cutting wood I am not making money.
You may also notice a lot of folks here are smaller crews, either working alone or with one helper. The cost of insurance and workers comp makes it very hard to hire help and pay them a fair wage. On top of that, if they have never logged before, training them to do the job right and safely slows production until they get any good, so that too becomes a cost.
It ain't easy...

CX3

Quote from: cheyenne on May 17, 2011, 11:13:17 PM
The only people I know making any real money in the industry today are the companies doing the line clearing for the utility companies...

I am not a believer of this statement
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You Better Believe It!

HuZzEy

I am you should see what is going on in central maine right now the utilty company up here is expand power lines all over just in my town alone there is more new forestry equip then I have ever seen clearing new areas for lines I saw today 4 new jd fellers 1 tigercat feller and 3 timbco forwarders I didn't see the little man out there with a saw and cable skidder making a dollar 

Bobus2003

Quote from: CX3 on May 18, 2011, 09:08:14 PM
Quote from: cheyenne on May 17, 2011, 11:13:17 PM
The only people I know making any real money in the industry today are the companies doing the line clearing for the utility companies...

I am not a believer of this statement

Depends what kinda company your running/working for.. If your a company that has to have the biggest, newest, and best equipment.. i doubt your making all that much money after payments, Fuel, labor, insurance... If your a guy thats running the oldest crappiest equipment.. I feel the same way cause you'll have lots of money goin into up-keep of the equipment plus all the rest.. The guys makin the money are the ones with good used equipment that paid off or close too, That been well kept so their isn't alot of downtime

cheyenne

Well.....Asplundh Tree Expert Co. is the largest utility vegetation  management Co. in the World & Lewis Tree Service is one of the biggest in the U.S. & their making a fortune & none of them sell the wood they cut.......I talk to loggers all the time & they all tell me the same thing...I can't make any money & I'm broke. I think the only way to make money in the business today is to get on Axe Men.....Now bear in mind one mans idea of making money is not the same as another.....In my humble opinion if a man invests a Million dollars in a business & it takes in a Million a year there should be a profit of 20 to 30%  if not... he's not making money, the business can't grow & he'll go broke......From what I see in my area they can't even eek out a decent paycheck for themselves & I know of a few that had their Utilities turned off this Winter....Things were a lot better before NAFTA & IMHO it's just gonna get worse........Cheyenne
Home of the white buffalo

Lucas P

So there are 3 main logging regions in the country right (west, south, and north)? What is the seasonality of these regions? I mean from when to when can you log and not disturb soil?

thecfarm

Have to factor in the weather in there too. One year it rained here in Maine just about everyday. Not a good time to be logging.I have no idea if you mean North for New England,but around here we have mud from about mid March to mid May.Depends on the lay of the land too on mud.
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Bobus2003

Quote from: Lucas P on May 19, 2011, 09:52:55 AM
So there are 3 main logging regions in the country right (west, south, and north)? What is the seasonality of these regions? I mean from when to when can you log and not disturb soil?

Depends on many factors.. The guy i'm working for had his first "Spring Break" in 9 years. The mill we work for kept him busy during the wet times by moving him to another sale where it was dry enough to work

paul case

Quote from: cheyenne on May 17, 2011, 11:13:17 PM
Well I only cut my own property for my own use. Last week I layed in supplies for the summer...1000 gals diesel fuel....$ 3,000, 500 gals gas.....$1,500, 100 gals hydraulic fluid....$1,400....2 cases bar oil $120.....spare chains $250 & who knows what else...I have over $100,000 tied up in equipment..... I think you get the picture....I would take a real hard look at  your plans...The only people I know making any real money in the industry today are the companies doing the line clearing for the utility companies...In fact their in my area now & they have all new trucks & chippers. Whatever your decision I wish you all the best.......Cheyenne
i need to be buying my gas and diesel from your supplier and you need to get your hydraulic fliud from my supplier.here in the midwest gas is $3.75, diesel is $.390, $3.60 for off road, and hydraulic fluid(hy tran) can be bought for $6 a gallon in the 5 gallon bucket. 

i think it should be said that a logger can make money in most parts of the country. how much money depends on overhead and manpower costs. at any rate it is not a get rich quick job.
as far as being on axe men, those guys have the foulest mouth of any i have seen. well most of them. if you notice there are a few real folks in each one of those shows. j. browning and his son almost never use profanity and neither does bobby goodson or anyone on his crew. i just mute the tv for axe men, but i am a little deaf and find myself reading lips and have to shut it off alltogether.
those reality shows do have a good point. those loggers using a lot of manpower and big equipment are always pushing for production. they dont get their goal most of the time. for me that would take the enjoyment out of the work. they also are constantly broke down and dealing with the weather.
i can make some money logging because i use equipment that is paid for.
i have seen a lot of outfits that buy new equipment and do a lot of great big jobs but then they go broke. too much overhead. new equipment isnt always the sign of profit. it may just mean a bigger payment.
in my part of the country many loggers are getting 60% on grade oak logs and 40% to 50% on walnut and pallet logs are paying $.22 and the landowner commonly gets $.06 to $.08 on those. the only way to make money logging is to keep your costs inside of those numbers. pc
life is too short to be too serious. (some idiot)
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pc

Lucas P

Is the relationship with the mill overall good? Do they pay fair price, and pay the loggers within a reasonable time frame?

mainiac

Quote from: thecfarm on May 19, 2011, 09:58:14 AM
Have to factor in the weather in there too. One year it rained here in Maine just about everyday. Not a good time to be logging.I have no idea if you mean North for New England,but around here we have mud from about mid March to mid May.
You mean like this spring? Will we ever dry out this year? Having a hard time getting firewood into my field for my processor. If anyone is cutting, it is coming out so muddy that I would not want to put it through my machine.
Not one shred of evidence supports the notion that life is serious.

paul case

Quote from: Lucas P on May 20, 2011, 01:46:32 PM
Is the relationship with the mill overall good? Do they pay fair price, and pay the loggers within a reasonable time frame?

the folks i sold logs to are a medium sized pallet mill and they were very good to deal with. if you took them a log they didnt want they wouldnt buy it but would happily load it back on your truck so you could take it back home. they were always fair on their price and on their scaling of logs. they paid every load if you want. good folks to deal with. pc
life is too short to be too serious. (some idiot)
2013 LT40SHE25 and Riehl edger,  WM 94 LT40 hd E15. Cut my sawing ''teeth'' on an EZ Boardwalk
sawing oak.hickory,ERC,walnut and almost anything else that shows up.
Don't get phylosophical with me. you will loose me for sure.
pc

Ken

The vast majority of the posts in this thread for the most part paint a pretty grim picture of the logging industry in general.   The past 5 or 6 years of depressed markets and profit margins are largely to blame. 

I for one believe that the future can only get better.  When markets recover, and they will,  there will be a select few who will be in a position to take a good "kick at the can".  That is one thing that keeps getting me up early every morning to face another day. 

That being said the most common logging costs as has been mentioned, are fuel, labor, maintenance and payments on capital investments.   Fuel costs are certainly something that we can not control and need to factor in our pricing.   Labour costs we can control and are generally the same with slight differences depending on location.  We are all aware that maintaining any type of equipment will only lead to a higher availablility of uptime and better returns.  Higher capital investments could potentially lead to higher profits but there needs to be a surplus to help make it through the hard times. 

When all is said and done most of those of us in the industy do it largely for one reason.  We love being in the bush (or in the mill) working with trees.  Personally I enjoy looking at the wood pile along the woods road at the end of the day or even better the wood pile on the truck heading out the road to the mill.

Cheers
Ken
Lots of toys for working in the bush

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