Profit versus diameter comments

[GeneWengert-WoodDoc]

In the large diameter (54") circle mill I managed, we figured that at about 6.5" diameter we were at the break even point for profit.  Smaller logs were non-profit.  For Large logs we made an increasing profit up to about 16". Then the profit dropped and at 20" diameter we became a non-profit operation.

We did the same calculations for a small Wood Mizer and found that it was profitable at about 5" up to 12", with the profit being much higher than for the circle mill at most diameters by a large amount.  In other words, profitability was higher but over a smaller diameter range.

Certainly the calculations have assumptions, but it did give us guidance.  A circle mill was a good option for a wide range of diameters.

In Europe, I saw some mills that limited the diameter of the logs to only those that were profitable on their mill.  Further, in the log yard, they did diameter sorts and then when sawing, they sawed only one diameter at a time rather than a mixture.  Interesting approach indeed.

[lineguy82]

Wouldn't that depend on what type of material you were trying to get out of the log?

[mesquite buckeye]

Neat stuff, Gene. I have to continue to figure which logs are worth cutting and which ones to leave all the time. Also trying to think of ways to handle material more efficiently can help to some extent.

For our short, crooked mesquite logs we need more diameter on a WM to make any money. Once the logs get really big, they have to have some really special high dollar material inside to justify all the time it takes to get them done.

[Bibbyman]

Non scientific study shows we are most productive at about 14" diameter.

12-20" run pretty well.  10-12" are production killers on our mill. Seems you make more slab volume than lumber.

Larger than 20" are often rough taking extra effort to get down to size to start making money.

If we had to saw a lot of large logs, the LT70 class mill with 1.5x.055 blade would be more productive.

Lots of small logs - scrag with resaw.

We mostly saw oak and other hardwoods.

[Magicman]

I only custom saw and sometimes I do have to discard small logs with sweep.  Generally speaking, if a "log" is 5" it can make two 2X4's, or several 1X4's and gets sawed.  I would hate to see an entire whack of 5" logs, but what I encounter are the tips of larger logs, so all is good.  Sawing them just goes with providing a service.   

[jd_odell]

A "small log fee" per log under X" in diameter will assist in increasing profit.

[Ocklawahaboy]

Good thing I'm not sawing for profit... Yet.  I've been sawing anything I can get usable lumber out of for my projects.  It all leans me more toward an hour based charge rather than a board foot though, at least for custom sawing.

[mesquite buckeye]

A "small log fee" per log under X" in diameter will assist in increasing profit.

Good thinking, or more per board foot produced from hard to saw, low production logs.

[jd_odell]

A "small log fee" per log under X" in diameter will assist in increasing profit.

Good thinking, or more per board foot produced from hard to saw, low production logs.

Thanks, but I won't take credit for it.  I picked it up from a WM video series.  Some great info in their video series...

[Kingcha]

So glad to read all this valuable information.  Hopefully I will have my mill in 2 months from now and will spend the summer learning.   I am glad to hear that you can get lumber out of the smaller trees as well.   When and if I saw for others I have already decided to do it by the hour.   My overall goal is part-time work.   I know I will have to find "My Market" if its either cutting and selling my own timber or cutting for others.   So looking forward to it.

Thanks again, I am learning lots

[KnotBB]

Interesting study, but I wonder if it only applies to production mills where volume is everything, support equipment is readily available and the end product is commodity wood.

My gut feeling says the bigger the better, up to about 32" and there is a lot more flexibility in the end product which generally results in a higher market price per M.

I run a Lucas, am mostly a one man operation and anything under 12" I consider firewood, there are always exceptions.  Cut a 12" (and down) log into fire wood lengths, one whack with an ax or maul and you have salable fire wood that sells for around $180/cord or $360/m, most hard woods pay a little better. Total equipment involved is one ax and one chainsaw.  No skill involved.  Market through Craigs List and the customer comes and picks it up.  No stickers, no drying degrade and no worry about protected storage (maybe a tarp).

For me it takes about as much time to set up on a 12" log as it does a 21" and I'll spend a lot more time sawing verses setting up than I would with smaller logs.  At 4 times the footage for the 21" verses a 12" I do a lot less work setting up and produce a lot more lumber.

Specialty cuts and slabbing are a whole different story.

[Magicman]

If they are all small, then I might see a bit extra, but when just sawing a job, I find it more profitable to let the "hide go with the hair".   Some things really do not matter in the grand scheme of things.

Many times a customer will drag something out just as I finish a sawjob.  I normally just knock these out for free such as this:  LINK  And I got a very nice pen for doing this.   

[Bibbyman]

One redeeming factor with small logs is the Doyle scale.  If the log is sound and straight we can come out or maybe make money.

Our logger was mostly bringing 14" and up.   We had orders for 10' 6x6s. They were used as post in log homes so had to be fairly nice, straight and heart centered.  I talked to the cutter and told him to watch for "straight" 10"-12" 10' top logs out of their white oak stave cutting.  They worked perfect for making a 6x6. 

Well, they got carried away and started bringing in anything down to 10". Not good for them as they really couldn't make money on these small logs and we had too may non-10' logs to deal with.

[hackberry jake]

As far as profitability goes, most of the time the people that want lumber from me want wide boards. So my profitability goes up with big logs. I just got an order for 14 cherry stair treads 12" wide and 44" long. You wouldn't be able to get many of those out of a 16" log and the quality would be lower. The cherry I will be using for this request came from this tree    needless to say I should have plenty of 12" wide boards to choose from. I have a few 24-25" wide boards I can rip down the middle.

[Slab Slicer]

Jake, this question is way off subject, but I have to ask. How does that Toyota Tacoma pull that trailer. I have the same truck, but nothing that size for a trailer. I'd upgrade the trailer if i knew my truck would pull it.

Now.....back to your regularly scheduled thread ;) ;)

[Magicman]

 :D  From the looks of what is on the trailer, I would have to use the Debarker to determine which one to saw.   ;D

Now.....back to your regularly scheduled thread ;) ;)

[SwampDonkey]

A Tacoma will move anything won't it Jake? :D

[POSTON WIDEHEAD]

:D  From the looks of what is on the trailer, I would have to use the Debarker to determine which one to saw.   ;D

Now.....back to your regularly scheduled thread ;) ;)

:D :D :D There is a little mud involved.

[LeeB]

Pulling is not the problem, it's stopping where the fun comes in.

[Magicman]

The only problem that I had with mine was no "limited slip".  That was my first requirement when I bought the Tundra.

[hackberry jake]

I was definately overloaded here 

 
But it does just fine. I have the Trd package so the springs are a little heavier and if you have trailer brakes you can stop just fine. I have a trailer that doesn't have brakes and it pulls just fine too, it does takes longer to stop but just watch further down the road and anticipate idiots and you'll be fine. I'm not a fan of limited slip. It will engauge when you don't want it too and here are clutches inside the housing that wear out. If I want to spin both tires I just engauge the electronic locker and away I go. I just wish they wouldve had the charcoal gray when I got mine.

[SwampDonkey]

Love it!  8) 8)

[Tom the Sawyer]

Back to diameter/profit...

Like MM, most of what I mill are customers' logs, whatever they have.  I do find that logs less than 12" diameter, or less than 6' long, require considerably more work for the board footage produced.  That is why I charge by the hour for those logs.  A lot depends on the overall job.  If most are >12" logs then I'll probably saw a few small ones by the bf too and just eat the difference.  If it is mostly small stuff then they are done by the hour.  I explain all of that during the site visit so there are no surprises. 

My productivity seems to go down somewhat when logs get over 24" diameter, even more so at 28" or more. 

Client cutting a groove for the guide roller...


 

[SwampDonkey]

That's an interesting specimen. Is that at a crotch where he's making some 'modifications'? ;D

[Brucer]

For those of us making a living at this (or hoping to in the future), it's essential that we know what kind of recovery we can get from different log type. Diameter is not the only criteria, either. Length, species, quality of wood, age of wood -- all of these enter into it.

We need to know how long it will take to process each log type. Processing includes log handling, product handling, and waste disposal.

We need to know what price we can get for the products that come out of each log type and how much of each product we can sell in a year.

We need to know what we will have to pay for the different log types.

Given this information, we can determine how much money per hour each type of log will earn for us. Then we can make rational business decisions on maximizing our income.

I know of no rational way of defining "profit" for a particular type of log.

[Tom the Sawyer]

SwampDonkey,

This was an oversized walnut with a crotch.  Client's son-in-law had his company truck with a boom and we used that to load the log.     

Lowered the stops to 'steal' a couple of inches on the drive roller side and he was trimming a knot off the side so the mill frame could clear it.  The small end was 28" but it was somewhat oval plus the extra width at the crotch.  He wanted some 12/4 through the crotch figure, got 2 at almost 24" wide.   

[hackberry jake]

Walnut Gender reconstruction is what it looks like to me.

[Bibbyman]

I could mention that log length also is a factor in our production and profit.   Anything shorter than 8' tends to slow production a great deal.  8' do ok.  As the logs get longer, our production goes up until we get above 14'.  That's as long as we can put through the doors on the north end of the building.  16'-18' we edge on the mill and saw one log then back the product out the loading deck.  That door is 19'-6" wide.  20' logs are a real pain. We have to angle them through the 19'-6" doors.

Longer stuff sales for more money but takes more time and effort.  Somewhat because we are optimized for 14' and shorter logs.

[Peter Drouin]

on the road I only cut 12" small end to 30" big end thats the size by the BF, and nothing shorter then 8'6" anything else is by the hr
when I buy logs 10" and up :D
In the 25+ years I have tryed all the different ways to cut logs theres no money in small logs, unless you chip them :D :D :D

[woodmills1]

sounds like this will be on the test.

[paul case]

What you are making must be or is a big factor in how productive you are in any size log.

I have a market for 3x4-10' cants. A 10'' log can make 4, a 12'' log makes 6, a 22'' log usually makes 20 and a 32''  log makes as many as 40. I can cut the 10'' and 12'' as fast as I can cut the 32'' log to equal the same output. The 32'' takes much more time since the saw only swallows a lil more than 12''. Extra trimming and edging 3'' thick x 20'' wide slabs takes up a lot of time.  the 18 to 24 inch logs actually may put out more cants per hour.

The reality is there is no getting too picky with the loggers when you only saw a couple or 3 loads a month. I am saying there is a optimum size for any mill to run and If you can get only those you probably are paying extra for it.

Me? I saw what shows up. Happy to get it too. Logging is kinda hard on this fat boy.  PC

[bandmiller2]

Doc Gene,good subject,it has always seemed to me that each log, large or small requires the same moves to cut.A large log within the capibilities of your mill you will get more from your efforts.My bandmill the upper practical limit is 30"but my favorites are between 18 and 24".I have the pick of logs and don't mess with the smaller stuff unless I can make four slab cuts and ship a timber.
Smaller hardwoods with sweep are best bucked up for firewood. Its a good idea to stay in your profitable zone if your paid by the BF,if your cutting customers logs do it by the hour and cut anything he wants.Its good form though to warn the customer about whats not worth cutting. Frank C.

[Cedarman]

Custom sawing has a different set of economics then a mill sawing purchased logs.
There are 2 situations that can make a difference on decision to saw small and oversize logs when you are sawing purchased logs.
1.  If you have an ample supply coming, then saw the logs in the sweet spot of sizes.
Stay away from small logs.

2. If supply is scarce it will make sense to saw small logs and oversize even to the point of losing money, but only  to a point.  Here's why.  A mill has fixed costs that go on whether the mill runs or sits idle.  Insurance, interest on loans, some labor costs etc.
Then there are the additional expense if the mill is sawing logs.  Electricity, parts wear, labor, etc.  These costs only occur in the producing of product.  If the sawing of those small logs produces enough cash flow to cover the production cost and a little left for fixed costs, then it makes sense to saw those small logs.  Keeps people working, a little money for fixed costs too.  You may still go broke, but at a slower rate.  The goal is to get through the log shortage to when supply picks up again so that you are back in the black.

[drobertson]

I have to agree with Cedarman, and add to what was mentioned about quality, I have seen many perfect sized logs in the range mentioned, only to find rot, ants, and overall poor quality lumber.  There is no way I reject loads that are delivered, I can choose not to buy from the logger again, but this is self defeating. All the mill around here take the good with the bad, and just keep on sawing, as far as custom sawing goes, how many jobs will we turn down before we get a name for not being reliable, regardless of the situations. And how many jobs are on the board?  Word of mouth speaks volumes.  And volume is the name of the game in my opinion in regards to sawmilling.  There will be jobs that would be called the "mother load" but these pay days are far and few between.   david

[Peter Drouin]

When I buy logs I try to buy the  best ones, to me good logs make good lumber, I do get some that are not to good like hemlock. you have to look for the shake :D, and sometimes I miss it when I buy them but not to often :D. I have a load coming next week some 24'. I went to the landing to day and I saw some shake in 2 12' logs the rest look good, I find if I pay a little more the loggers will work with me on good logs, for me cutting logs and getting only half good wood out of it and the rest is cull lumber is a wast of my time, the lumber looks good coming off the mill then in a day or two it looks like like a pig tail, this is what works for me. good luck with what works for you

[drobertson]

Peter you make a good point, paying more is the way to do it, unfortunatly, most of the mill around here pay straight across the board, when they take the bad they expect the good as well. Now dealing with independant loggers or land owners there are times when this practice can be done, green backs speak volumes, the problem I have seen if the good logs are taken out then the remainder is graded heavily buy the mills purchasing. So the price paid for the good has to be high enough to balance what the remainder of the logs will bring.  This can be a double edged sword,  Fact is, a small mill is on the hind teat of most of the deals.  There are times when it works out great, and times not so great as well,  Something like shake or any noticable defect is always considered cull, some folks just try to peddle, as if it were not noticed,   logging is a hard way to go in my book.  cull logs are just as much work as good ones, and no money for the work,  david

[Peter Drouin]

Hi drobertson, I jump around to different loggers they sell to the big mills. loads and loads. I come a long and buy one or two loads from them, say 4 or 5 loggers. the big mills get the good and bad I get what I want, the loggers get more money [and I pay the trucking]. when I have to get long logs the loggers love me I pay well and the customer might pay a little more but they get the best wood . and lots of times my customer has a customer too. It's a win win for me, you see over here it's not volume but quality  ;D

 

like this :D nice wood

[POSTON WIDEHEAD]

Wow Peter......the perfect log. 







( I still say it's a debarker  :D )

[Peter Drouin]

Wow Peter......the perfect log. 







( I still say it's a debarker  :D )

Ok :D :D :D :D :D :D :D

[Brucer]

Richard, that's exactly why I say there is no rational way to calculate the "profit" on any particular type of log.

The key number is Throughput = "money earned from sales" - "price paid for the log" - "direct expense of sawing the log". In most operations the direct expense of sawing the log is much lower then most of us would expect. Are labour expenses all assigned to sawing the log? Would you send a good worker home for half a day because you ran low on "good" logs? Do that too many times and you'd lose your good workers in a hurry.

As long as your throughput is greater than zero, you are generating income. Of course you have to pay all your fixed expenses (e.g., overhead) out of this income, and pay yourself as well. You need to make sure the average rate of throughput is high enough to do this. But if you hit a slack period where the high paying work isn't there then it makes sense to go for the lower returns, just as long as they still generate income.

Too often people get hung up on the artificial notion of a "profitable log" and think they will be losing money sawing something that isn't "profitable".

Peter, like you I buy the best logs I can. I pay 50% more than my competitors. Dealing directly with loggers is a losing game for little guys like me. I have no clout with the loggers. They'll cater to me when they are slack but as soon as things pick up, they're off after bigger customers.

My supplier is a veneer plant (think plywood). They pay good prices for quality logs, then sort out the straightest ones and sell them to me at a huge markup. They call the shots with the loggers. Thing is, they rarely send me bad stuff and if they do, they'll take it back at their expense. My annual consumption is less than a year's day's production for them. And they like me -- something to do with me paying cash up front for each load ;D. So pricey wood but a very reliable supply, and a consistent price.

[Cedarman]

I will buy everything the logger brings in.  From 2" up, cull or good.  Priced accordingly.  But, the logger must bring in all the logs.  If a load comes in without the big nice saw logs and only small stuff and junk, I ask where the bigger logs are.  When he says so and so pays more, I say take the small stuff to him too.  The logger says he won't buy anything less than 7" or something like that and I say, I guess you get to take these back home.  From my perspective, I am not going to subsidize my competition. This is for cedar.
Selling hardwoods is different.  Some mills want pallet stock, some tie cuts, some grade logs, some veneer.  In this case it makes a lot of sense to find the buyers who pay the most and treat them well.

[Meadows Miller]

Gday

I am like Richard ,Bibby & Paul Ill take everything 6-7"sed and up 2'6" led that comes in the gate Run of Bush and I get the A Grades too and get it all for a touch above Pallet grade prices  ;)

Everything else >6" or 7" dia  goes into post production with my partner who is also my one of my logging contractors also takes the logs over 2' dia and runs them through his Lucas Mill

we are also going to buy logs in of other logging contractors we will also be taking alot of oversize sawlog 18" and up Case grade sawlog 8" and up and pulp 4" and up to do the posts out of  ;) ;D

I can be profitable on Pallet which is the bread and butter the rest i get out in grade is the jam n cream  ;)  ;D

The way I see it is if you start specing Dia and Grade you better be willing to pay for it along with the fact any drop in grade is going to cost you  It also puts you in direct compitition with the big mills doing the same and looking for those logs in the 8" to 18" dia range But if you have buyers and direct sales that will bare the extra cost thats fine but working in the wholesale market is tough  ;)

As you said Gene there are mills which scan and run one dia class of log sometimes for full days on only a 1/2" dia deviation Alot of Australian and International mills run along the same lines of Euro Mills these days but it can be their downfall also as everyone is chasing the same bloody logs in the 8" to 18" range and they only want 18' and 20' lengths and want them to be perfect  ??? :P :  This is Sawmillin Fellas  :D :D ;D ;D

Work outside those paramiters and you have access to plenty of logs as alot of countries have an issue with oversize undersize log outside those two measurements  ;D ;D 8) 8)

Regards Chris

[stavebuyer]

Our most profitable log is 13-14". The over-run on Doyle scale will run 50% + with a bandmill and jacket boards will be wide enough to grade FAS/1F. We get 10-15% more production when sawing 18"-20" diameters but the over-run drops to 35%. Red oak logs can be bought in the 13" diameter class for 350-400mbf where as the same quality in a 18" log might be double that. If I was sawing by the thousand I'd want 18" logs; buying logs and selling the lumber I do better at 14". Below 12"; the over-run increases but is more than offset by decreases in production and value of the product sawn.

[Peter Drouin]

Our most profitable log is 13-14". The over-run on Doyle scale will run 50% + with a bandmill and jacket boards will be wide enough to grade FAS/1F. We get 10-15% more production when sawing 18"-20" diameters but the over-run drops to 35%. Red oak logs can be bought in the 13" diameter class for 350-400mbf where as the same quality in a 18" log might be double that. If I was sawing by the thousand I'd want 18" logs; buying logs and selling the lumber I do better at 14". Below 12"; the over-run increases but is more than offset by decreases in production and value of the product sawn.

Hi stavebuyer, you guys in the south make out good with Doyle , up there In NH it's International and the only over run is because I use a ban mill :D :D the scale is right on with it, or with in 5 or 6 BF per log. I don't know how your loggers make money with Doyle. but I gust they do, I don't live down there and don't know how it all works, 50% is a lot :D :D good luck to ya

[WindyAcres]

It depends what you saw (sawing only 2 inch is faster than 1 inch e.g.), but in general I found 8-14 feet logs, 12-20 inch at the small end works out pretty good. However, around here hardly anybody grows these trees anymore plus you are looking at 30 cents/bf for spruce and 40-60 cents/bf for hardwood (for buying them!).

[Meadows Miller]

We dont run that way down here we have to calculate recovery to know are log imput costs we buy by the measured cubic meter m3 or the ton so a 28 ton semi load will run at about 30m3 roughly in pine out of that I usually run at 60% avverage recovery with a circular mill im logs from 6" to 2' dia so out of 30m3 of log I will get 18 m3 or 7650bft of sawn timber so at a log cost of say $55 m3 $1650 a load gives me a log imput of $215 per thousand I get $570 per mbft for pallet or $355 per mbft for the sawing component  ;)

thats not counting Revenue from selling Chips and Sawdust  ;)

Regards Chris

[Meadows Miller]

also every 1% i gain or loose on my recovery factor means my logs can cost less or more per thousand  ;)

[JustinW_NZ]

We dont run that way down here we have to calculate recovery to know are log imput costs we buy by the measured cubic meter m3 or the ton so a 28 ton semi load will run at about 30m3 roughly in pine out of that I usually run at 60% avverage recovery with a circular mill im logs from 6" to 2' dia so out of 30m3 of log I will get 18 m3 or 7650bft of sawn timber so at a log cost of say $55 m3 $1650 a load gives me a log imput of $215 per thousand I get $570 per mbft for pallet or $355 per mbft for the sawing component  ;)

thats not counting Revenue from selling Chips and Sawdust  ;)

Regards Chris

Much the same here in NZ, its just purchase by the ton.
Its generally graded and put on the truck so you know what the truckload is - give or take...

Unless its something not so commercial  (i.e not pine) where it turns more into - here's the lot take or leave...

Cheers
Justin