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Thinking through starting a mill

Started by Horselog, January 02, 2016, 12:08:52 PM

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Horselog

I am thinking through starting a (semi) production mill.  To all of you experienced mill owners and/or operators, what are  the biggest challenges that I need to plan for?  What things can I do to address those challenges?

Why would it be a bad idea to get into it?  Try to convince me to not get into it.  I'm looking for the realistic picture.

On a slightly different note, does anybody have production experience with the Woodmizer head rigs?  Even if you don't, what would be the disadvantages of that versus a circle rig or even a big band rig.  I would probably be focusing on larger and higher quality timber, not small low grade stuff.

I'd be happy to provide further information about what I'm thinking.  Although to a degree I don't know what I'm wanting to get into because I don't know all the pros and cons of everything yet.
Benjamin Harris
Appalachian Mountains of Virginia
horse_logger@me.com

Ocklawahaboy

Welcome to the forum.  When you say semi production, do you mean that you will operate it part time on the side of another job or that you will do part production and part custom sawing?

dustyhat

Production requires manpower , something hard to find these days .seems nobody wants to work in sawmills. just my two cents.

WV Sawmiller

Horselog,

   Welcome. Love to see more details on your profile. More detail about where you are from would help.

   What experience do you have with sawing and the timber industry? What would be your market? What kind of trees are you planning on cutting? Where are you planning on getting your logs? Are you planning on selling green lumber or setting up a kiln operation? How about support equipment? What do you have for a site, buildings, landings, storage areas, access/egress, etc? How about transport of the logs and lumber? Any local restrictions about noise, pollution, etc? Any neighbors nearby who might take a dim view of your plans and operations?  How about taxes? Insurance? How about finances? How long before you would need to show a profit? As touched upon, how available is labor in your area? Competition? Just lumber or specialty items planned?

   These are just a start on questions you will need to address. Good luck and keep us informed.
Howard Green
WM LT35HDG25(2015) , 2011 4WD F150 Ford Lariat PU, Kawasaki 650 ATV, Stihl 440 Chainsaw, homemade logging arch (w/custom built rear log dolly), JD 750 w/4' wide Bushhog brand FEL

Dad always said "You can shear a sheep a bunch of times but you can only skin him once

Horselog

When I say semi, all that really means is that I'm not 100% sure of what it will look like.  It would probably be just a straight up production mill.  It will be a full time mill that may do a little custom, but not necessarily.

I am located near Elliston, VA, outside of Roanoke.  I don't currently have a great place to do it, still looking.  I would probably start with a large logging job where I could set up semi-permanently and avoid having a site initially.  I see myself building into this gradually, rather than going into big debt for a full set-up to begin with.  I have 13 years experience logging and some experience doing different amounts of custom band milling and swing blade milling.  I am currently logging, and would look toward building a crew that could keep the ball rolling with logging while I branch off and run the sawmill and related operations.  I have access to a fair amount of wood with my current logging operation, and could access more as I expand my logging capacity.  I do realize that finding qualified help is a major issue, it's one I'm running into now.  I also am thinking about insurance, finances and other things like that, but that is not my main purpose in posting here.  Those are somewhat straightforward to calculate, I have ways to do those things.

Mainly what I'm looking for here is thoughts about the business and management side of saw milling.  Or maybe another way to say it is what are the things that are hard to calculate for? Variables?  As far as markets, that's part of what I'm asking here.  There's several I am looking into, such as quartersawing, wholesale, export logs, and other markets like flooring, caskets, pallet lumber, ties and mining props.  I am looking for insight into the in's and out's of those various markets.  What are the challenges to sawing grade wholesale?  When would you want to focus on that versus other areas?

On a  related note, I would like to get into log export. 

Support equipment would be simple enough, just get a decent wheel loader.  Lumber Trucking I can contract out to any number of local trucking companies.  I do my own log trucking.

As far as competition, there are other mills, but none super close.  I would be looking to find a niche so that I wouldn't be in direct competition all the time with them.  That's part of what I'm looking for here, ideas on niches.

Initially I would not plan on doing any drying or specialty planing or anything like that. 

Thanks for the thoughts.
Benjamin Harris
Appalachian Mountains of Virginia
horse_logger@me.com

Larch

I'm sure you know this with all your experience but a good way to look at a sawmill operation is a waste slab and sawdust production business with usable lumber as an occasional by-product.  Going out in the woods and getting the logs is about 10% of the work.  And the fun 10% at that. 

Edit: Not that I don't love the milling.  That's the whole point.  But for that thin cheese you've got to work through a lot of bread in that sandwich.

Ron Wenrich

I was in the commercial end of milling on a medium sized circle mill.  I can't comment on a Wood-Mizer setup, but I haven't seen any on a production scale in hardwoods.  There was one that used 2 Wood-Mizers to feed a Baker resaw and they sawed high end cherry.  They had 13 employees.  Their production was a bit less than mine, and I worked with 5 employees, not counting trucking.  They ended up having a fire, and never rebuilt.  The newer Wood-Mizers may have a better production rate.

The biggest problem with most mills is logs.  It sounds like you have that end nailed down.  We had solid markets for all our lumber, chips, bark and sawdust.  We also did the logging and sold firewood and veneer logs.  We also had an outlet for softwood pulp.  We also could load containers for export.  You need to have a knuckle boom and a loader that can push those logs to the front.  The bit of export lumber we did also had to be containerized. 

We rarely sawed on speculation.  Whenever we had a run a logs, we would place a call and get the specs for what was needed.  We had a few specialty items that helped our bottom line.  We pulled casket lumber from our production line.  We also had a market for 8/4 ash, hard maple and birch.  They made butcher block countertops.  We dabbled in the flooring markets, but sometimes the grade was too tight.  We had several pallet companies that we sold to and had a standing order for ties.  To get these markets, you need to produce quality lumber.  We didn't jump from marketplace to marketplace looking for a few extra dollars per thousand.  We didn't skimp on thickness or grade.  When markets collapsed, we were still running and picked up business due to reputation.  That's where you want to get to.  You'll have to do your homework on where to find your local markets. 

You probably can put an automatic circle mill for a pretty good price.  Handset mills would be even cheaper.  That's how we started.   The problem with trying to work as a portable mill is what to do with the waste.  That amounts to a good amount of money and pays for a lot of expenses.  The other factor is whether landowners are inclined to allow it.  You also have to contend with mud.  Putting mud on lumber is frowned upon by dealers.  What do you do with the partial bundles at the end of the job?
Never under estimate the power of stupid people in large groups.

Bill_G.

If you are going to market hardwood lumber , then who ever is sawing better know how to grade it or you will loose your shirt before you get out of the gate . It is no less important that all of your mill and logging help have a good understanding of hardwood lumber grading as well .

Cedarman

There are several trade magazines that showcase different mills.  They describe in detail log supply, production equipment and types of markets.  There is a wealth of information in these articles.
You may have to go a ways, but find some mills similar to what you want to do and talk to the owners.  My guess is that they will be glad to give advice.
What you are wanting to do requires a tremendous amount of research, pencil pushing and talking to your possible markets.

A full blown business plan including all the items mentioned in previous posts will be extremely helpful to narrow down your final plans.

In 1992 we did with eastern red cedar what you are wanting to do with hardwoods.
It has been a wild ride, but very rewarding in many ways.
I am in the pink when sawing cedar.

Verticaltrx

I may not be as qualified as some to answer your questions, but I am a contractor/farmer/part time sawyer and therefore a businessman, so here's my take on it...

I think you are starting out too large too quick. The best businesses (in my mind) are those with low overhead and high profit margins. You have good access to logs, possibly a site, and some options for markets. I would start out with something along the lines of a Woodmizer LT40, a large skid steer or small wheel loader, and somewhere to set it all up. Focus on the high value stuff, the higher the amount you get per board foot the less high production becomes a necessity. In the beginning this is something you could even run by yourself or with just one helper. At the end of the day it's how much money you put in your pocket not the size of the operation that matters.

I personally am not real enamored by selling ties and pallet wood, in my mind there are other things you could use those logs for and make a lot more per bf, think 'character grade' and mixed species hardwood flooring, etc.

One last thing I'll leave you with, I personally run my two businesses by the following guidelines and it has served me well:
-No debt
-High value/value added products, never wholesale
-Low overhead
-Only buy things with a quick ROI
-Minimal, but good employees, or none at all if you can swing it

Good luck with your endeavors smiley_thumbsup.



Wood-Mizer LT15G19

Percy

Ive done the woodmizer/support equipment thing since 1998/full time since 2003. As Ron stated, log availability is a key component to surviving, along with capacity(equipment/staff) and market(sales)...Its akin to standing on a beachball. It can be done but it is difficult...Helps to be stubborn.....The best money Ive made is doing specialty cuts for brokers. Things that most production mills dont cut. Long stuff, wide stuff, big stuff. Having those high quality logs you speak of is a good start....
GOLDEN RULE : The guy with the gold, makes the rules.

Horselog

Quote from: Ron Wenrich on January 02, 2016, 04:45:22 PM
I was in the commercial end of milling on a medium sized circle mill.  I can't comment on a Wood-Mizer setup, but I haven't seen any on a production scale in hardwoods.  There was one that used 2 Wood-Mizers to feed a Baker resaw and they sawed high end cherry.  They had 13 employees.  Their production was a bit less than mine, and I worked with 5 employees, not counting trucking.  They ended up having a fire, and never rebuilt.  The newer Wood-Mizers may have a better production rate.

The biggest problem with most mills is logs.  It sounds like you have that end nailed down.  We had solid markets for all our lumber, chips, bark and sawdust.  We also did the logging and sold firewood and veneer logs.  We also had an outlet for softwood pulp.  We also could load containers for export.  You need to have a knuckle boom and a loader that can push those logs to the front.  The bit of export lumber we did also had to be containerized. 

We rarely sawed on speculation.  Whenever we had a run a logs, we would place a call and get the specs for what was needed.  We had a few specialty items that helped our bottom line.  We pulled casket lumber from our production line.  We also had a market for 8/4 ash, hard maple and birch.  They made butcher block countertops.  We dabbled in the flooring markets, but sometimes the grade was too tight.  We had several pallet companies that we sold to and had a standing order for ties.  To get these markets, you need to produce quality lumber.  We didn't jump from marketplace to marketplace looking for a few extra dollars per thousand.  We didn't skimp on thickness or grade.  When markets collapsed, we were still running and picked up business due to reputation.  That's where you want to get to.  You'll have to do your homework on where to find your local markets. 

You probably can put an automatic circle mill for a pretty good price.  Handset mills would be even cheaper.  That's how we started.   The problem with trying to work as a portable mill is what to do with the waste.  That amounts to a good amount of money and pays for a lot of expenses.  The other factor is whether landowners are inclined to allow it.  You also have to contend with mud.  Putting mud on lumber is frowned upon by dealers.  What do you do with the partial bundles at the end of the job?

How much percentage of your expenses was covered by chips, bark and sawdust?  What exactly did you do with each?

How much was your daily production with your circle mill?

What is your philosophy on wide kerf and production vs. thin kerf and potentially lower production?  The permanent WM head rigs I'm looking at supposedly range from 8-10MBF/day with the proper support setup. 

I currently have a situation where the potential landowner would be willing and happy let me setup semi permanently on site and saw.  There are a number of things that still need to happen for it to work, but there's 1500 acres of woods and of course potentially several million feet of timber.  I'll keep in mind about the by-product handling and mud.

Thanks everyone for the input.
Benjamin Harris
Appalachian Mountains of Virginia
horse_logger@me.com

square1

It may have been here, maybe not, but you have to answer this question as part of your plan...
What's the difference between a Sawyer and a large pizza?

4x4American

Boy, back in my day..

square1


Ron Wenrich

Wood waste will be about 40-50% of your operation.  You'll get about 2 tons of slabs per Mbf.  Matters little if it's a circle or band saw.  You start your cut at the same place.  I followed those numbers for a year, and it held out.  Sawdust was about 1 ton per Mbf.  Obviously band mills will reduce the amount of sawdust and increase the yield.  It works well in high value logs, and not as well in low value logs. 

We got $25/ton in chips, $20/ton in dust, and $750/trailerload of bark.  Depending on species, it would be about 20 Mbf to fill a trailer.  Roughly $110/Mbf in wood waste.  I've heard guys talk of $200/Mbf for production costs, but ours were lower. 

Chips were sold to a mulching operation.  Steady customer for 20 years.  Other markets include pellet mills, but we didn't go that route.  We had a list of farmers that used sawdust.  They needed it during good times or bad.  We delivered with a self unloading trailer.  Dust and chips were blown directly into the truck so there was no additional handling.  Bark came off the debarker and right onto an open topped trailer.  We sold directly to a wholesaler.  If the trailer was tied up, we would push it unto a pile and load with knuckleboom loaders.  Faster than a front end loader.

Production depended on what you were sawing.  Small logs like locust dragged production down.  Typical 8' logs came out to be about 12 Mbf/day.  16' logs would increase your production with oak being 15 Mbf and tulip poplar up around 18 Mbf.  My best was cutting long pine for cabin stock.  Typical 20-22 Mbf/day.  Our production did slow when we cut 23' switch timbers.  Side lumber had to be cut to 16' or less.  But, we were getting $750/Mbf. 

My philosophy on the difference between circle and band is it all depends on what you're cutting.  I have never liked the idea of dragging lumber off the top of a log.  Sawdust lays there, and you can't see what the grade is very well.  When I sawed, the next board face was coming past me, and I could make a judgement call pretty quick.  Also, gravity is your friend.  It makes material handling so much easier.  The extra sawdust also resulted in extra production.  Time is not a renewable resource.  This brings down sawing costs often more than you can get in recovery.  When you get into the bigger bands, you have more power, and that advantage starts to tilt towards band mills.  But, you will have to get those bands sharpened.  Circle mill blade costs are lower.  For me, my saw costs were $1.50/Mbf.  Nails or other trash would raise the costs slightly.  You only ruin the teeth, not the blade. 

If you are running a typical mill setup, you will have more #2 and #3 logs off of log run then you will #1.  You won't be able to cut veneer logs and make a profit.  No matter how you figure, you can't match the veneer buyer's price in a commercial sawmill. 

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

mad murdock

If you are interested in lowest possible waste, use a band mill to reduce grade logs to cants, then resaw with something like a Logosol LAKS resaw.  Really thin kerf on the resaw, probably same as on a band mill or maybe less?? though you are looking at 25-35K for one of those units new.  Not a cheap way to ease into it.  I would think that you would have to have a real solid lock on what the market would be, before you "put the cart ahead of the horse", so to speak.  You sound like you have the ambition.  Cutting a high grade product can bring the $$ and does not depend on high production per se to keep the cash flowing.
Turbosawmill M6 (now M8) Warrior Ultra liteweight, Granberg Alaskan III, lots of saws-gas powered and human powered :D

Horselog

Quote from: Cedarman on January 02, 2016, 08:07:29 PM
There are several trade magazines that showcase different mills.  They describe in detail log supply, production equipment and types of markets.  There is a wealth of information in these articles.
You may have to go a ways, but find some mills similar to what you want to do and talk to the owners.  My guess is that they will be glad to give advice.
What you are wanting to do requires a tremendous amount of research, pencil pushing and talking to your possible markets.

A full blown business plan including all the items mentioned in previous posts will be extremely helpful to narrow down your final plans.

In 1992 we did with eastern red cedar what you are wanting to do with hardwoods.
It has been a wild ride, but very rewarding in many ways.

What are the some examples of these trade magazines you mentioned?

Thanks for the thoughts
Benjamin Harris
Appalachian Mountains of Virginia
horse_logger@me.com

Horselog

Quote from: Ron Wenrich on January 03, 2016, 11:21:01 AM
Wood waste will be about 40-50% of your operation.  You'll get about 2 tons of slabs per Mbf.  Matters little if it's a circle or band saw.  You start your cut at the same place.  I followed those numbers for a year, and it held out.  Sawdust was about 1 ton per Mbf.  Obviously band mills will reduce the amount of sawdust and increase the yield.  It works well in high value logs, and not as well in low value logs. 

We got $25/ton in chips, $20/ton in dust, and $750/trailerload of bark.  Depending on species, it would be about 20 Mbf to fill a trailer.  Roughly $110/Mbf in wood waste.  I've heard guys talk of $200/Mbf for production costs, but ours were lower. 

Chips were sold to a mulching operation.  Steady customer for 20 years.  Other markets include pellet mills, but we didn't go that route.  We had a list of farmers that used sawdust.  They needed it during good times or bad.  We delivered with a self unloading trailer.  Dust and chips were blown directly into the truck so there was no additional handling.  Bark came off the debarker and right onto an open topped trailer.  We sold directly to a wholesaler.  If the trailer was tied up, we would push it unto a pile and load with knuckleboom loaders.  Faster than a front end loader.

Production depended on what you were sawing.  Small logs like locust dragged production down.  Typical 8' logs came out to be about 12 Mbf/day.  16' logs would increase your production with oak being 15 Mbf and tulip poplar up around 18 Mbf.  My best was cutting long pine for cabin stock.  Typical 20-22 Mbf/day.  Our production did slow when we cut 23' switch timbers.  Side lumber had to be cut to 16' or less.  But, we were getting $750/Mbf. 

My philosophy on the difference between circle and band is it all depends on what you're cutting.  I have never liked the idea of dragging lumber off the top of a log.  Sawdust lays there, and you can't see what the grade is very well.  When I sawed, the next board face was coming past me, and I could make a judgement call pretty quick.  Also, gravity is your friend.  It makes material handling so much easier.  The extra sawdust also resulted in extra production.  Time is not a renewable resource.  This brings down sawing costs often more than you can get in recovery.  When you get into the bigger bands, you have more power, and that advantage starts to tilt towards band mills.  But, you will have to get those bands sharpened.  Circle mill blade costs are lower.  For me, my saw costs were $1.50/Mbf.  Nails or other trash would raise the costs slightly.  You only ruin the teeth, not the blade. 

If you are running a typical mill setup, you will have more #2 and #3 logs off of log run then you will #1.  You won't be able to cut veneer logs and make a profit.  No matter how you figure, you can't match the veneer buyer's price in a commercial sawmill.

Ron, thanks so much for your detailed replies.  Very helpful.  I have some more questions.

What are some examples of good places to find lumber markets?  I'm thinking of pretty much anything that might come off a sawmill, from low grade to high.  What were the most common places you sold to?  What were the least common?  Were there markets that you wanted to do but couldn't for some reason?

How many guys did you have helping you for the production numbers you mentioned?

Did you hire out all your lumber trucking?

And some general questions:

What were the 3 most important things you did that helped you be successful?

What are some things that you wish you hadn't done?

Lots of questions, I know.  Thanks for your effort in this.

Anyone else that has run a successful production operation is welcome to answer as well.


Benjamin Harris
Appalachian Mountains of Virginia
horse_logger@me.com

Cedarman

Pallet Enterprise,  Timberline,  Timber Processing  , Sawmill and Woodlot and Management (see ads left), Woodmizer Way, to name a few
I am in the pink when sawing cedar.

280 rem

I have kinda went through what your thinking of doing. I answered some on your thread.
With what your doing you will have the advantage of capturing a lot of value, going from buying trees all the way to marketing green lumber. But it will require good help willing to be educated in grade lumber. Bucking the logs all the way through edging the boards will all have an effect on you pay check. Huge challenge, finding help that cares and willing to learn. They will all have an effect on the bottom line and it's a shame if lumber is not being made to all it can be as well. There is a lot involved with what your thinking for sure and will take a lot of management. Sounds like your on the right track though
Advice I would offer without getting to windy.
You really need to be stationary
You will need to look at other head rigs besides a WM, and probably something running a wide band, 4" plus for production
We saw walnut lumber for the same reason Willie Sutton said he robbed banks, "because that's where the money is"

Select 4221E, baker edger, cat 908 loader, Jd 548E, timberjack 230d, hood 7000 loader.

Horselog

Why should I go stationary?  I'm leaning towards that, I'm curious what you're reasons are for recommending it.

Do you have examples of makes and/or models of the larger band mills you mention?
Benjamin Harris
Appalachian Mountains of Virginia
horse_logger@me.com

YoungStump

 If I was thinking to start a sawmill with the production numbers you're thinking about I would recommend seriously checking into a vertical band head with a carriage. It's pretty common around here for guys to take a circle mill and replace the circle head saw with a band head. McDonough makes band heads for wide bands, Lumbertiger Mfg in OH is an Amish company that builds vertical band heads for 1 1/2"- 2" bands, I'm sure there's other as well these are just two off the top of my head.
Echo Enterprises 45HD2 production series band mill, Cook's Edger, sawing mostly pallet cants, rr ties, and grade lumber.

280 rem

Well I can't even imagine being portable with the kind of equipment you would need to produce the level you mentioned for one. You will need automation to move that kind of production, log deck, live rollers/conveyors, green chains, a serious edger among other things. Landowners willing to let you move something like that in and the liability of that on there property would be in short supply around my local.
Well there are some horizontal wide band rigs, especially a select if you decided to go portable. Others that are European, mebor would be a good one to look at. Or a vertical big band, some mills around here are setup with a big band head rig, 6' band wheels, like a McDonough, with a circle mill carriage. But even talking with those guys they are only producing 10mbf a day sawing grade (on a good day, with good logs), not sure there would be a huge advantage to vertical over horizontal at that rate.The big outfits put in a linebar resaw behind them, thats when really big numbers are produced.
We saw walnut lumber for the same reason Willie Sutton said he robbed banks, "because that's where the money is"

Select 4221E, baker edger, cat 908 loader, Jd 548E, timberjack 230d, hood 7000 loader.

280 rem

Sanborn makes a nice vertical tilted wide band rig and it can be portable. There is a nice reconditioned one for sale I saw listed the other day. If ya got deep deep pockets a cleereman lumber pro would be the ticket. Sorry I'd forgot about these 2 lol
We saw walnut lumber for the same reason Willie Sutton said he robbed banks, "because that's where the money is"

Select 4221E, baker edger, cat 908 loader, Jd 548E, timberjack 230d, hood 7000 loader.

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