Pricing other species

[Logsnstuff]

Seen a few threads on pricing oak at 15 - 30 ft3 but how are you pricing other species, I'm thinking about an lt 15 which is going to be a bit of work being manual but want to test the waters a bit before investing in hydraulics but we do have some ash, chestnut, birch, beech, pine, spruce and larch in the wood, if doing custom sizes I'm curious on the pricing.

[agg221]

A complex set of variables in this, but the starting point for me is the price which allows me to end up at a reasonable hourly rate after allowing for depreciation on capital and running costs.

 

I am using low capital investment equipment (Alaskan and chainsaw driven bandsaw, plus powerheads) but have relatively high consumable costs (Aspen, chain oil, saw bands). My production rate is relatively low, although bearing in mind timber is priced in cubic feet rather than square feet sawn, I can improve daily production significantly for thicker sections. The bandsaw is much more efficient but limited throat. My non-productive time is spent sharpening saw bands and transporting equipment (mine is designed to be portable) and I have a mix of time and costs for servicing/maintaining saws and chain.

 

When I balanced up all the above, it worked out that if I buy wood at firewood prices I end up with an acceptable hourly rate if I sell at £15/cu.ft so that sets a base price.

 

Oak generally costs more to buy in than firewood prices, as do some other desirable species such as walnut, so to achieve the same hourly rate I need to sell for more.

 

Most of my milling is either for my own use, or on a day rate for people. If I am supplying timber then I tend to end up trying to set up three-person deals where someone wants something and someone else has the appropriate butt. I then act as a midde man and buy the log, mill it and sell it straight on. This works out as, being pre-sold, I don't add time for stacking, marketing etc. so effectively 'free delivery' is the added benefit to the customer since I can mill it and transport the timber straight to the customer, rather than hanging on to it.

 

When you start selling from stock, it gets more complex. Firstly, you have to add in costs for marketing, including your time, plus the significant time spent selling boards - you can guarantee that the customer will want to see the whole stack when choosing their board, even when they end up wanting the board on the top! You also know that the wider boards will sell more easily than the ones from further out, so you end up with mixed pricing, residual stock etc. I don't really try to do this, but sometimes when I end up milling for my own use I will have spare boards which I will sell on to recover costs. I tend to go for £20/cu.ft for these, to cover the above (£25/cu.ft for the more expensive species to buy in).

 

All the above is based on green timber. Seasoned goes up further as either you have the time of air drying or the cost and effort of kiln drying, plus an amount of spoilage for both.

 

In different set-ups, the above factors will move around. I would guess that an lt15 may work out similar to the above as you increase production but also increase capital costs (depreciation) which in part time operation will add enough per cube to balance out. A small commercial set-up such as Big J's clearly enables some economies of scale and he has run at slightly lower prices - probably equivalent overall at point of delivery to my pre-sold logs. When you get into really big production set-ups such as the continuously operated softwood production plants run by BSW the costs do drop significantly but they supply a different market of course.

 

Slightly rambling thoughts there, but might help in considering the right factors.

 

Alec

[Logsnstuff]

A complex set of variables in this, but the starting point for me is the price which allows me to end up at a reasonable hourly rate after allowing for depreciation on capital and running costs.

 

I am using low capital investment equipment (Alaskan and chainsaw driven bandsaw, plus powerheads) but have relatively high consumable costs (Aspen, chain oil, saw bands). My production rate is relatively low, although bearing in mind timber is priced in cubic feet rather than square feet sawn, I can improve daily production significantly for thicker sections. The bandsaw is much more efficient but limited throat. My non-productive time is spent sharpening saw bands and transporting equipment (mine is designed to be portable) and I have a mix of time and costs for servicing/maintaining saws and chain.

 

When I balanced up all the above, it worked out that if I buy wood at firewood prices I end up with an acceptable hourly rate if I sell at £15/cu.ft so that sets a base price.

 

Oak generally costs more to buy in than firewood prices, as do some other desirable species such as walnut, so to achieve the same hourly rate I need to sell for more.

 

Most of my milling is either for my own use, or on a day rate for people. If I am supplying timber then I tend to end up trying to set up three-person deals where someone wants something and someone else has the appropriate butt. I then act as a midde man and buy the log, mill it and sell it straight on. This works out as, being pre-sold, I don't add time for stacking, marketing etc. so effectively 'free delivery' is the added benefit to the customer since I can mill it and transport the timber straight to the customer, rather than hanging on to it.

 

When you start selling from stock, it gets more complex. Firstly, you have to add in costs for marketing, including your time, plus the significant time spent selling boards - you can guarantee that the customer will want to see the whole stack when choosing their board, even when they end up wanting the board on the top! You also know that the wider boards will sell more easily than the ones from further out, so you end up with mixed pricing, residual stock etc. I don't really try to do this, but sometimes when I end up milling for my own use I will have spare boards which I will sell on to recover costs. I tend to go for £20/cu.ft for these, to cover the above (£25/cu.ft for the more expensive species to buy in).

 

All the above is based on green timber. Seasoned goes up further as either you have the time of air drying or the cost and effort of kiln drying, plus an amount of spoilage for both.

 

In different set-ups, the above factors will move around. I would guess that an lt15 may work out similar to the above as you increase production but also increase capital costs (depreciation) which in part time operation will add enough per cube to balance out. A small commercial set-up such as Big J's clearly enables some economies of scale and he has run at slightly lower prices - probably equivalent overall at point of delivery to my pre-sold logs. When you get into really big production set-ups such as the continuously operated softwood production plants run by BSW the costs do drop significantly but they supply a different market of course.

 

Slightly rambling thoughts there, but might help in considering the right factors.

 

Alec

 

 

to start with I'm not too worried about timber price I still have 4 years left on a thinning contract for 160 hectare mix although 60% is probably 150 year old oak I will continue to sell the bigger logs the main idea is for oak and chestnut sleepers for a garden nursery that we supply with logs and there are a couple of guys doing forestry work where they fabricate bridges and I could cut the timbers for that, there is a fencer also on the estate but like you say not so easy to compete with the big mills.

[Jamespepperpot]

I've never found it worth cutting sleepers, especially on my mizer which doesn't have hydraulics either. They're only like £20 off the Internet, I've even thought about buying in sleepers to cut other sizes of timber out of as it saves a whole bunch of time and wastage.

 

Chestnut gateposts tend to do alright though

[agg221]

With the markets you are looking at, I think question isn't so much pricing, as whether you can set up to get your production costs low enough to achieve a decent rate when selling at the fixed market price.

 

A lot of assumptions in the calculations below but:

 

If the garden centre can sell a 2.6m x 25cm x 12.5cm (full size) sleeper for £25, you will probably get £12.50.

Sleepers need heartwood. If you have 18" top diameters of heartwood you can get 3 sleepers out of a length; 22" will yield 5 sleepers. If you can get the logs to the mill fairly easily then this should be possible to make work, assuming there is a large enough demand for sleepers?

 

Are there any issues with grading for the bridge construction timbers? There shouldn't be, as it would be visual grading only, which doesn't require any formal certification, but you might want to know what you are doing unless the contractors are prepared to select their own and take responsibility.

 

Supplying cleft chestnut to the fencer could be a very good option if there is suitably sized material? Not very difficult to learn to do but doesn't need the mill.

 

Alec

[Ilnumero]

I found that as soon as I bought my mill, all my potential customers disappeared.

[Logsnstuff]

I found that as soon as I bought my mill, all my potential customers disappeared.

 

had the same issue with firewood bought a replacement forwarder and everyone who was asking for artic loads all vanished. the advantage I have is being a side business I can afford to stack the timber up until people do come along and there are couple of joiners in the family who use oak time to time.

[wills-mill]

If people want timber that's custom cut and it suits what I've got in log stock and won't cause lots of grief and waste, then I'm happy that it goes out cheap (lot less labour and wastage).

 

If it's custom cut but means I end with loads of 3ft long log ends and a pile of spare boards with no outlet, then the price quoted tends to be higher.

About half the time it works out nicely, so that there might be a few orders on the go at once that make use of the logs as they are milled, so I might be able to cut cladding or tree stakes to go along with a beam or post order.

 

On timber that owes me very little (and is being sawn, delivered and paid for straight away) I usually stick on something like a milling cost of £6 per sawn cubic ft to the original timber price. In my current setup, yard space is the premium factor, so I'd rather get shot of stuff quickly at cost price, rather than waiting years for a financial bonanza on air dried timber. I've got some boards that I've dragged between various yard moves for 6 to 12 years now, and I don't want to be doing that as a repeating cycle.

[Big J]

I'm anywhere from about £5 a cube upwards on hardwoods. There isn't really an upper limit as high end walnut and burr elm are worth as much as someone is prepared to pay for them. £5 a cube is for ugly beech/sycamore etc.

 

£6 a cube is a bit steep Will! For regular customers, I'm £3 a cube to contract mill. On clean timber and assuming the blades are behaving themselves, the mill will do 50-80 cubic foot an hour.

[wills-mill]

We've been here before I think J.

 

I'm measuring the cube and doing the pricing on the sawn output after all edging and discards of sappy or structurally unsound timber, rather than an initial hoppus measure of the log.

 

£3 to £4 works really well out on site milling customers timber. But that's when I'm not doing the log handling, crosscutting, slab, firewood and dust handling, timber stacking, trimming to length, sticking, banding.