Pallet lumber prices

[ElectricAl]

Paul,

I'm impressed with your Pallet Market.  42 -47 cents for a cant is huge.

Up here a 3.5 x 6 in a whapping 35 cents delivered.
Pallet logs range from 25 - 30 cents.

Cut stock is .59 for a 1 3/8 x 3 1/2 x 36
                  .60 for  a 1 1/8 x 3 1/2 x 48
Delivered.

Our buyer is 90 miles north of us. That takes a lot of the fun out of sawing.


ElectricAl

[paul case]

The $.47 is a tie, 7x9x8'8''.
The $.425 is a 3x4-10'6''. This is a friend of mine who builds heavy skids to haul water tank sides on. Sometimes they use as many as 300 pieces per week.
The 5/8x3½x40'' is actually paying something like $.53/ actual bdft and they go to a pallet company in Joplin.
Those are delivered prices but the farthest is about 20 miles from me.
I have been paying $.25 for logs and I can only get $.30 for a f4xf6 pallet cant. I cut a few of those out of logs that wont make a tie and are already cut to 8'.That company that buys the pallet cants will also buy a 1 1/4x3 1/2x 103'' stringer for $.1.48.
Oh the funny part is that pallet cant has to be perfect and the 3x4-10'6'' can have some bark.

I could probably make more on the side lumber to sell to a flooring plant , btu the closest one to me that is buying green lumber is about 120 miles. And yeah that kinda sucks the fun out of it. PC

[learner]

This whole thing has bothered me from the get go, which is why I'm asking.  We Do have an edger that will accept several blades so we've been talking about this as a future thing.  When we can run a board through and get three boards out the other side.  That will involve taking the edger to a machine shop for modification first though.  Using the radial arm we could cut three or more at a time to length.  I think it boils down to me talking to the man and getting an idea what they want and expect.  ElectricAl, I think your dead on with the contract deal.  Just let them know up front that I'll only provide what I can, when I can.  If they like that fine, if not then nothing lost.  After all the call from him came out of the blue.  As for what to charge per bf, guess i'll just have to wing it unless some nearby suppliers pipe in on what they get.  I'll try to get the guy to give me an idea, which i know will be low!  But i can adjust from there.

[Ron Wenrich]

Pallet cants in my area are $420/Mbf +.  I've been hearing some a little higher.  The big competition is ties and guys aren't going to switch from a steady tie market to a cant market that fluctuates.  So, that keeps the cants up in price.  The lowest its been in the past couple of years is about $350/Mbf. 

[Peter Drouin]

Pallet cants in my area are $420/Mbf +.  I've been hearing some a little higher.  The big competition is ties and guys aren't going to switch from a steady tie market to a cant market that fluctuates.  So, that keeps the cants up in price.  The lowest its been in the past couple of years is about $350/Mbf. 

Is that with a 3 clear face log that is 12" small end? and international scale

[Ron Wenrich]

That's finished product.  Has nothing to do with the log, grade or scale.

[rooster 58]

    Pallet stock is slow here right now. Inventories are hig enough that they are paying less or not buying as much, due to good logging weather and availability to logs

[Meadows Miller]

Gday

My thoughts on pallets and del cutstock esp  is the Sawmiller is doing all the hard work and the pallet maker is just about making 100% ontop of the cutstock price just for nailing the thing together and marketing . and its not hard to sell pallets its the same as lumber just a finnished product you are just moving higher up the food chain 

I am sawing pine pallet cutstock @$550 to $580 per thousand bare in mind I pay roughly $210 to $250 per thousand for log thats based on 50% recovery and I do better than that the higher my recovery the lower my log imput costs are  ;)

so that leaves me with roughly $300 per mbft for sawing and out of that it costs me $40 per mbft in del cost the govt take 10%gst (tax) of the top and I also have higher labor ,power and other imput costs but I am still going to make a dang good living  ;)

but the ultimate goal for me is to switch to doing higher percentages of finished pallets to the final buyer over the coming year for that little bit of extra work ill be running at $950 to $1100 per mbft with a higher profit margin

Contracts OOHH they sound nice but just be carefull you do not want to put yourself over a barrel Mate  :( >:( but to the same token I have also heard of good news contracts over the years also that have set people up  ;) 8)

I think the trick is to consolidate your production capacity by that i mean grow slowly and aquire the gear you need to be productive I have tha capacity if I double shifted the laimet to do in the order of 3600 pallets a week @$19 to $22ea that is why I am doing cutstock atm and as I build up I can easily swap my cutstock sales over to my own pallet shop and sales needs  ad the Meadows into the mix you have some serious production capacity per week   

Profitable Cashflow is king and you need it to do anything or go anywhere with a business Im chasing production because it also puts me in the box seat as a supplier for larger ongoing contract jobs but they are and will be on My terms and prices  ;)

I have also said this before and it goes for all timber sales if your dealing with a middle man there is the price they would like to pay and the price they are willing to pay  ;)

Regards Chris

[1woodguy]

   When it's their contract it always in my case seems  to favor the other party in the long haul
  When it's mine it usually works for me unless some drastic expenses come in
I like pay as you play the best !

  I have never done pallets  but guys I know who went broke  trying were the ones locked into a deal and got way way over their heads
   They wern't getting paid enough to begin with
Another time two  brothers I knew wanted me to join in with them (I had a few tools and a forklift at the time they needed)in the pallet game odd size pallet and only the one customer I passed
  At first they done ok. Then the company played the old pay you slower and slower game, so they borrowed to cover costs
Finally the customer went belly up
same guys have did this several more times on great deals
A take what you can give is best deal
Cause you have time for other customers
And they can see you can stay busy with out them  some tend to pay better or quicker that way
    CYOA comes from experience
As I get older I test the waters with a toe
Used to test by leaping from a plane into shark infested areas thinking I was playing going to be playing with dolphins


 
 

[Peter Drouin]

That's finished product.  Has nothing to do with the log, grade or scale.

Well I don't know what I was thinking this moring sorry, when I was looking at the price you all get and what I would have to pay for pallet logs , and in NH It's 275 MBF, and sell wood for 420,
just can't do that here

[Ron Wenrich]

We pay more than that on the stump.  Veneer helps defray log costs, but if you're only buying logs, you lose that advantage.  You're not only getting pallet cants from a log.  The cants should be the lowest priced item in your log.

[Peter Drouin]

thats why I buy the best logs I can , not veneer but 3 cf and I get to sell all the wood for a good price,
selling lumber can be a hard thing some times
maybe I just need to learn more about more markets, thank for your input Ron Wenrich

[WDH]

In the South, sawing pallet lumber has historically been one of the best ways to go broke in the wood business.

[learner]

I have to agree WDH.  I'm thinking they found out we are a New sawmill and are hopeing to take advantage.  Getting a call from someone wanting lumber though is nice.  When I spoke to the guy, i was thinking they just wanted pallet cants.  Not the actual boards.  That's a lot more time and work involved.  And as Meadows says, by then, all the work is done.  All you need is a nail gun to build the pallets yourself!  And we have all the neccesary equipment for that so.  I'm thinking this man will have to really entice me to want to supply his company with pallet boards!  ;)

[Meadows Miller]

Gday

All very good valid points have been brought up here .  ;) ;D

I do things and think little differently because i have to. Now most Sawmills in the world chase blocks or timber or resource in the Med to High quality log resource and every year those logs get harder to find as more producers look for the same grade logs to produce Hi/Med & Low quality products and suffer profit dilution along the way that comes with it .

Now filp things around where you process the low to med range low stumpage cost blocks with a reasonable % of Med+ grade logs. And produce timber the other way around where you can profitably produce low grade products but when you do get those better quality logs you treat them as such with a higher return 

  Now there are alot of people who have had blocks that have either High graded and alot of lower grade trees left or in the case of Plantations seed or tree quality or lack of management was variable to say the least now big loggers come in and offer bugger all for the timber ($1 to $3 a ton for the lot as pulp) or the blocks to small for them to shift the big gear in to do the harvesting. I tend to offer $10 to$15 a ton across the board but I dont cut pulp but Jack my partner and logging contractor dose do treated fence posts (small rounds ) form anything for 3"> to 7" or 8" dia which gives dang good fiber recovery and return to the plantation owner  The block we are in atm was passed up buy everyone else and there will be two or three thousand ton of log in it  and we have a heap of blocks like that to do

Now what that dose for my business is those good logs that do come in I can produce good timber out of it dry,dress or treat it and retail it without loosing or having alot of capital tied up in production costs or if I have the product sitting there as it cost me less to produce than buying higer grade logs and also I have cashflow coming in from the lower grade products which are the easy ones to move  ;)

Im working in the butt end of the industry some would say but where have i got to go from there  ;)  :D ;D  hell I even spent two years sawing graded building and pallet timber out of a graded pulp log resource which was not pretty and that mill had a dang good profit margin 

Just something to think about  ;)

Regards Chris

[rooster 58]

     Learner, you're right about being "new meat" People try to take advantage of that. A few months ago I was speaking to the mgr. of a large mill about sawing logs for them that were not profitable for them to run thru their own mill.
     We talked of me setting up on their site to reduce costs, but due to insurance issues it was not possible. After more discussion, and talking about milling costs for their mill, and my own sawing overhead, we started to talk numbers for what he was going to pay. What he offered was right where my costs were, I would have made wages only, with no room for profit.
    Since then we havn't had discussions. I told him I had to wait to be sure what my overhead was going to be, so maybe something could develop but I don't expect it to. But, nothing ventured nothing gained. It was a good experience and I learned alot from it

[Meadows Miller]

The problem is everyone is trying to make profit for their own individual businesses
and the more businesses involved the harder it is to be viable and the sad part is you just have to walk away from some work due to that instead of being fair buyers will screw you rite down to just above cost I said no to a $40k a month job the other day  Thing he dont know is I already know where the bloody lumber was heading  and he just lost his cut : ;)  :D

Its taken along time but I will be incharge of costs from go to wo Logging,Trucking Ect will all be done at a little above cost so the mill turns a better profit as a whole .

Rooster I remember that thread now they have said what they would like to pay Just keep in touch and wait em out and let those logs pile up in their yard and I am sure they will come back with a better offer those logs are costing them money sitting there Mate  ;)

Regards Chris

[timburjack]

Does anyone know what a fully assembled pallet would bring in central pa? This thread has me thinking about rainy day work, not only that, if its profitable it would enable a logger to utilize timber otherwise not worth it, and in the process benefit the landowner.

[customsawyer]

Timburjack be careful what you wish for. The big mill produce pallet lumber from there low grade logs and the pith of there good logs. They sell this stuff at cost or below to get to the grade lumber in the good logs. It would be hard to compete with them on a price for pallet lumber.

[Okrafarmer]

So-- a sweetgum log is a railroad tie encased in pallet wood, eh?

[WDH]

More properly, "encased in warped pallet wood"  .

[Okrafarmer]

More properly, "encased in warped pallet wood"  .

So true.

[timburjack]

customsawyer i see where you are coming from but after reading meadow miller's post it got me thinking. That market and price is down under, but if the only transportation cost would 200 to get it to a mill, and the wood would be leaving as a finished product, that would eliminate various middlemen and trucking costs. Given a market could be found for a low volume production operation [say 500 a week] and the raw material cost would be 20 cent scragg logs, it would seem that it would be competitive with an operation that is buying cants for 40 cents. Obviously it would totally depend on what price a pallet would bring, if it is $10-$15 that makes it a lot different than $19-$22.

[learner]

Allright guys, stop knocking sweetgum!   :D There are much worse woods out there.  I like sweetgum.  Probably because most others don't!  ;D

[Okrafarmer]

Allright guys, stop knocking sweetgum!   :D There are much worse woods out there.

Name them.