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paying landowners

Started by curdog, January 22, 2014, 06:27:22 PM

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curdog

Lately I've heard from quite a few landowners about what they are getting paid for their wood and I've heard from quite a few loggers what the prices are running right now. Is there a percentage that y'all work off of? I always assumed it was usually 50-50 or somewhere close (60-40 split or so). But the price some loggers are paying landowners is considerably less than that. I understand insurance, payments and everything loggers have to pay for, but just wondering how the split usually works out.

Firewoodjoe

A lot of factors come into play. The wood the terrain, roads, landing space, area markets. The list goes on

CX3

I can give half on good timber on good ground and lots of it. Any lesser factors means the landowners start paying
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RayMO

CX3 is on the same page as I am . If their is a fair amount of good veneer walnut  I might give as high as 70% to land owner on the walnut only and not on lower grade stuff on the same job.
Father & Son Logging and sawing operation .

jwilly3879

50% after trucking on logs, $5/cord softwood pulp, $10/cord hardwood and hemlock pulp, access roads negotiable.

Ianab

Thing to remember is that it costs the same to log and truck low grade logs as high grade ones, but the value may differ a LOT.

So if the mill is paying $50 ton for low grade logs, and it's costing $40 to get the logs there, then that's only $10 left for the land owner.

But if you are getting $200 ton for premium logs, harvesting costs is still only $40, so that's $160 left for the land owner.

Either way you are making your $$. Not loosing your shirt on the low grade stuff, and not ripping of anyone on the premium stuff. The harvest cost and transport will vary from job to job, so the actual percentage will vary too. Heck it may average out to 50/50, but obviously some jobs (and woods) are just better than others. Just sticking to 50/50 probably means that you loose money on the poor jobs, and miss out on the premium ones where someone else will split 70/30 (and still make $$).

Ian
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treeslayer2003

50/50 works good for me as long as there is a good mix of descent size timber. lots of under size or pulp and I have to go lower, but that doesn't happen very often. oh and 50% on the veneer makes up for paying 50 on junky saw logs that need to come out for the benefit of the stand.
I guess in other areas there may be more grade than saw n that would warrant a rethink on prices. don't be fooled by guys that seem to be paying big bucks, there usually is a hitch somewhere.

thenorthman

percentage split, usually start at 50/50 after trucking, the truck gets their cut straight off the top, and the mills send everyone involved a check.  The trucks here charge by distance to the mills, load size has nothing to do with it, mostly cause the self loader jockeys are used to dealing with part time gyppo's that don't have a clue what a full load consists of and the trucks still only get 5 miles to the gallon and it still take an hour or two to load + unload.

The split is subject to change depending on variables, like road building, access, lot size, permitting issues, mudd, terrain(steep flat etc), and the type and quality of the timber.  There are always going to be more variables, and I'm not the best at bidding yet, but so far I haven't lost my shirt.

Timber prices are subject to veer wildly here so paying a set price is a big gamble, although some folks will do so, but keep in mind they are low balling and hoping no one else is going to bid on it... (read crooks)...  different areas of the country have more stable markets though... so pinch of salt on that.
well that didn't work

Birchwood Logging

I usually give 30 to 40 percent of the gross before trucking I haul it my self the land owner gets a copy of each load ticket and there percentage is taken out of the gross it cuts down on confusion they can see what each log brings
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treeslayer2003

birchwood, that's what I paid until competition forced me to go to 50. for those of you that hire out the trucking, keep doing it if ya can. trucks are expensive. you makin more at 50 after truckin than I can.

curdog

Thanks guys. This has gave me a little more insight on the payment side of things. I usually try to keep a pretty good idea on what the mills are paying and what products are selling good, but I try to stay completely out of the exact break down between landowners and loggers. I work for a state agency and I feel it's none of my business what folks are getting or paying each other. I like to be able to give advice on which products are moving well, but still be able to not put an exact price on anything since it's not me paying the landowners and the markets change quickly. But this does give me a little background on some of the variables that affect wood prices. Thanks again.

jwilly3879

This is why I like a percentage as harvested over a lump sum sale. I have seen too many loggers get the short end when your logs look like these.

Nice wood.



 

But then.



 

And you lose. Probably 35% of the what we cut looks like this and winds up as pulp.

bill m

That is why I never work on percentages or lump sum. I get paid per M and the land owner gets paid on mill scale.
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jwilly3879

Do you get paid based on the scale from the mill? The mill wouldn't even scale these logs they would but them aside and the trucker would haul them back to the landing or drop them in his back 40 until he had a load of pulp. The land owner gets $5/cord, we get $23, it just sucks to see timber like this.

bill m

I get paid per M on mill scale, logs and pulp. The problem I have with percentages or lump sum is that I am taking all the risk that the logs will open up. If the logs all start looking like the ones in your pictures I've got to bust *** to make any money. If I was only getting $23 per cord for pulp I would be loosing over $50 per cord.
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Kemper

Just about all the time I pay 50/50 on logs, $3.50 a ton on pulpwood or scragg. If I was in a real bad woods or an extremely long haul I might do 60/40 me, but I've only done that a couple of times. I do my own trucking.

NWP

Quote from: bill m on January 23, 2014, 07:59:48 PM
That is why I never work on percentages or lump sum. I get paid per M and the land owner gets paid on mill scale.

Is that a flat rate per M no matter what you're cutting?
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bill m

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treeslayer2003

can't pay 50% for pulp, like kemper said around 3 a ton. % only for saw or better.

g_man

Quote from: bill m on January 26, 2014, 08:05:38 AM
I get paid per M on mill scale, logs and pulp. The problem I have with percentages or lump sum is that I am taking all the risk that the logs will open up. If the logs all start looking like the ones in your pictures I've got to bust *** to make any money. If I was only getting $23 per cord for pulp I would be loosing over $50 per cord.

When I first thought of this it seemed fair all around. The way I view your system is; The logs on the landing, what ever they are, belong to the land owner, and you are basicly being paid by the hour to extract them at your rate. But what is your incentive to cut for grade. It seems it would hurt you to do that but help the landowner. How do you handle that dilemma.

thenorthman

If I'm cutting cotton wood then we take everything and the owner doesn't get anything, at 225 per 1k and the worst scaler in the area, the load may bring 500 after trucking, the latest one we got $449.93  Which doesn't even cover the fact that them trees needed to be climbed and chunked down...

Other wise there isn't much of a pulp market here, a little farther south yes, but is too far for my little gyppo outfit to bother with, and we would make more money off the firewood.
well that didn't work

PAFaller

I'll let Bill M answer this too, but having seen pictures of his work Im sure he bucks for grade too. Even that is all dependent on the mill and the buyer, but for me its a pride thing. I would love to say I cut a lot of my own timber at rates that allow me to do great work, but much of the time I am a contract logger. I still take my time and the neatness in the work shows, unfortunately it just helps the sawmill I work for buy more timber. But as for cutting for grade, its a pride thing. The mill I cut for has another crew, productive but not neat or careful, and everyone at the place will tell you they can see the difference between the logs when they get there. Bells trimmed off butts, knots flushed all the way around so the debarker works better, knots at the end of logs to maximize the clear in hardwood etc. There's no guarantee any way works better than the other, at some point a landowner needs to trust the guy cutting his timber. And regardless of how the guy does on the landing his work in the woods is equally important. I cant count the number of times Ive heard a landowner say 'well the guy down the street says he can cut it for 'x' per thousand, or he pays a better percentage.' But then you look at said guy down the streets job and every tree that didnt get cut has limbs busted out and or bark peeled off, so sure you got a little better money today and now you're growing nothing but pulp because of sloppy work. This subject is pretty sore with me and a lot of the more respected guys I know, who take a lot of pride in their work and are trying to figure out how to make ends meet when the cut and skid rates today are only 10-15% higher than they were 10 years ago yet everything else has more than doubled in price.
It ain't easy...

g_man

PAF, I think you are responding to my question to Bill but not sure. If so you miss read my meaning. Sorry I wasn't clearer.
First off I agree that Bill does nothing but quality work. I am not acussing him of being a slob just to get as many BF to the landing as he can because of his rate structure.
What I am really asking is this. Cutting for grade takes expertise, knowledge, and time and can significantly increase the log values which helps the landowner. At the same time it usually lowers the BF measurement which hurts his paycheck.
How does he work it so that he is comfortable that he is getting compensated for his expertise. I would think that he would take his rate per MBF and also a small percentage of the mill check to keep it fair. But he doesn't. So I am curious how he figues it.

Ed_K

If you can really look at a tree on all side and see the defects and cut for grade,yes the bf may be less but the price of said log will be more.I have a book from purdue university "manufacturing and marketing eastern hardwood lumber Produced by thin kerf band mills" that helped me understand how the buck for grade and how the mill get the most value from a log.Some where here there is a thread about a program call "Hardwood Buck" that you can go to online and pratice.
Ed K

Glenn

I pay my jobber $9 per ton on the landing.  The mill hauls it themselves so that is worked into the price they give me.  Everyone must be happy because every year they ask if i'm going to be cutting.  I always have my roads, landings and skidways built ahaed of time and the skids are short.

treeslayer2003

for you guys contracting to a mill; why would you buck logs at all? I mean don't ya haul tree length any way or are you using strait trucks?
I buy my own stumpage and am fortunate to have a good relationship with a good buyer. he buys all my large hardwood tree length and he grades them.
and yes I am pleased with his grade, many times the whole load will grade.

thecfarm

I have not heard of not bucking logs for grade in my area. Just depends on how the mill you are selling to buy logs. Any of the sawmills that I know of around here does not buy tree length.
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treeslayer2003

what I meant was, if your cutting the mill's timber. they would want it all any way right? I realize in some places every thing is hauled on strait trucks.

1270d

Our sawmills won't take pulp.  They only buy logs which you of course buck for grade.  Pulp will go to a separate mill.  If a pulp mill buys a sale they will usually still have you cut logs due to the higher value

jwilly3879

Around my area all the wood is bucked on the landing except maybe some are left tree length for the log buyer to decide how he wants them bucked. We buck everything, even veneer, my son worked for a log buyer and knows how to cut for grade. I worked with the buyer on some tree length and I know what he is looking for. We had a contractor cutting hardwood for us two years ago and his bucking skills weren't the best. He just didn't understand the grades. After a few loads we had them leave tree length on the landing and I bucked them. Big difference in the log checks.

We are paying $2.50/ ton on softwood pulp and $4.00/ton on hardwood and hemlock pulp, both the truckers buy the pulp from us and resell it.

treeslayer2003

I think I see now, y'all call every thing better than pulp grade? I guess it is in a way. different areas different terminology.
what size top minimum for a grade log then? 13" here but 14 is much better.
I would love to say 20 but that be dreaming lol.

OntarioAl

Folks
Up here the price the mills pay for private land wood is depressed by the cheap wood that the mills get off public land (there is no public bid for it). That restricts what I can pay a private landowner for their timber.
I would offer a blended price per cord by species (standing) with a signed contract. I would then try to maximize the high value products to off set the low value pulp and firewood. I have  an exemplary track record of fair price, careful logging practices and above all never ever removed any wood that the owner was not compensated for. Word got around that I was one to get and I always had people offering me stumpage.
My best advertising came from the victims of high stumpage offers from the crooks who cut and run.
Al
Al Raman

jwilly3879

When I say grade I'm referring to the log buyer will take, he will take a good butt log down to 11" but the better money is 13" and up. He has no interest in pallet logs, or tie logs as some call them, they need to be 10" small end. Basically anything that pays less than $200/mbf at the local hardwood mill goes for firewood.
The last load of hardwood we sold to him averaged $425.

We are paid for pine logs down to 8" small end, the lengths are 8'-16' with 12's + 16's preferred. They will take 8's, 10's and 14's but not too many, the owner of the mill worked in the woods for many years and understands sometimes you need to cut the not so desirable lengths cuz that's the best log you can get.

Like Al, we have people asking us to cut and don't shop for the highest price, we welcome them to visit the jobs we have done and the landowners we have worked are available for references.

1270d

#2 is down to 10 inch.  Pallet bolts down to 7.  Veneer is 10 minimum (perfectly straight pin heart hard maple)

treeslayer2003

pallet and tie logs pay 325 here, matt and high grade 350. 10" for pallet[tree tops] 13 every thing else. what I consider grade starts at 400, guess  y'all call all that veneer but veneer really is whats peeled. pine is the cryin shame here, we used to get 400 for them big ones but 300 is max now. yellow pine that is.
oh, jwilly we get red heart in pine to but the only out let for pulp here[Glatfelter satilite yard] will only take up to 18" big end and they don't really want no rot for paper chips.

bill m

When I am cutting on some ones property I feel I am there to make them the most money I can. I treat their woods with respect because the job I do today can affect their income for many years to come. Consequently I am paid a higher rate then most loggers in my area and all the firewood from the jobs is mine to do with as I see fit.
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1270d

Quote from: treeslayer2003 on January 26, 2014, 06:37:11 PM
pallet and tie logs pay 325 here, matt and high grade 350. 10" for pallet[tree tops] 13 every thing else. what I consider grade starts at 400, guess  y'all call all that veneer but veneer really is whats peeled. pine is the cryin shame here, we used to get 400 for them big ones but 300 is max now. yellow pine that is.
oh, jwilly we get red heart in pine to but the only out let for pulp here[Glatfelter satilite yard] will only take up to 18" big end and they don't really want no rot for paper chips.

I'm not lumping everything as veneer.  We have #1 saw log,,#2 saw log, #3 saw log(ties) rotary veneer and slicer veneer with different grade levels of each.  Lengths are anywhere from 8'8" to 16'6". Whichever you can buck for best grade/scale.  Sometimes certain lengths are preferred depending on what the buyers want.

8 10 and 12 are most common for me due to taper and crooked wood.

craigc

When we buy a bid sell or a private sell I  put 10% down balance due before harvest.  I don't like buying on shares.  Last bid job I bought the Veneer paid for the job and the labor.  I still have 400 trees to cut.  If I did this on shares I would still owe them money, now I have a nice profit coming instead.
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jwilly3879

Most of our pine pulp goes to a shavings plant for animal bedding. Same for aspen (popple), make out good on aspen because it is stick scaled. They are paying $90/cord, same as hardwood pulp. The grandson cut about 10 cord today, about 5 hrs. after everything got warmed up, it got up to 6 today.

huntdibbs

I pay percentage usually 60/40 for good timber [mainly r oak, w oak, maple, ash, and cherry in my area] . I sell road side and buyer splits the cks so I don't have to mess with paperwork.
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