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  1. #1
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    Default What my log is worth

    This is a question that comes up here regularly. Someones got a tree, that want it to be a gone tree, they know that wood has a value, and they'd like to save it from a chipper/ spare the expense of a tree lopper / or make a few dollars out of either selling the tree or sawing it into boards and selling the timber.

    The first questions of course are related to what species the tree it is and how big it is. The wood of some species are worth more, some are worth less. Red Cedar and Radiata would be two examples on opposite ends of the scale. Size does matter also: little logs can't saw big boards. Big logs might be overmature and full of defects and decay.

    Where the tree is located is also a factor. A tree in a paddock or on acreage with no surrounding infrastructure like buildings, roads and power lines is a lot easier to fall then one in a suburban back yard. That infrastructure often adds both cost and complexity to the task of felling it. Yard trees also tend to have issues with foreign objects - nails for cubby houses, wire from fences, rocks and grit thrown up by lawn mowers. All these things create saw destroying hazards to back yard trees. Saws cost money, so that further devalues yard trees.

    But lets look at an acreage tree. Whats it worth, and why if timber is expensive are logs worth comparatively little?

    To understand this we need to understand what it costs to mill a log.

    The average recovery of a commercial hardwood sawmill sits somewhere between 30-40%. Lets pick 33% for a round number. What 33% recovery means is that for every three ton of logs that go into a sawmill one comes out as salable boards. (With eucalypt hardwoods a cubic meter is around a ton so I'll use those interchangeably for a bit.) The other two disappear along the way and get turned into sawdust, or disposed of as waste. This is the price of turning irregular shaped but basicly "round" items into regularly shaped square sections. We lose a lot to edgings. We also lose the entire heart area in most hardwood species due to the inherent weaknesses of heart timber. Then we lose some of the sawn sections to fault docking: there are limits to how big a knot can be, or how much slope of grain is allowable, or how many insect holes, or how long a crack can be... before that piece of wood is classed as unsound.
    Then we get to look at whats left over and post fault docking some is too short to be of any commercial value. There is no market for 150x 50's at 900mm long. So its just more waste.

    Sometimes we get better logs. Better logs will recover higher but its a double edged sword because for every good log you get a bad one to average him back. Can you guarantee me that your log is perfect? If so I got a job for ya - come be my log buyer. I've been in this game a long time and I still get suprised by "good" logs that cut poorly, or "bad" logs that cut unexpectedly well. Betting on good logs is like betting on good weather when planning a holiday: you dont. You'll hear about guys that average 50% recovery sometimes. They're always hobby sawmillers. Thats because hobby sawmillers dont have to run a saw to eat, and they can afford to wait for good logs to come along. <ost of them also never really track their numbers to know exactly how big each log is, and exactly what volume of recovery they got off each one. Good for them, they dont have to.

    So at this point I as a sawmiller have had to pay for 3 ton of logs and putting them in my yard. I have had to pay the cost of sawing 3 ton of logs. I have to pay any costs associated with handling the two ton of log that is now waste of one sort or another. I have to pay for all the costs of operating any other business: wages, insurance, fuel and electricity, regulatory compliance. I deserve a profit also: I work hard for my money and I've got a lot of that money tied up in equipment and property and that deserves some consideration.
    All those costs have to be carried by the one ton of saleable timber we've produced. Then we have the costs assosiated with selling that timber, and if we sell it to another party for resale there are freight costs and the timber merchant has to pay bills involved with his business and make some money for his time as well.

    So lets say you've got a nice eucalypt hardwood log. I can tell you now that (a) if its a good tree and (b) its in a place where I can get at it and (c) theres enough of them to make it worth my while its worth about $50 a cubic meter on the stump. Thats because a tree on the stump is like sand on a beach... its just a raw material. Someones got to fall the tree and put it where it can either go to a mill or be accessible to a portable mill if you go that way. All those things cost money. Portable sawmillers dont freight whole logs true - but they pay for that in other ways like higher labour costs due to lower productivity.

    So we pay $50 for a ton of log, then we fell it which costs around $30 a ton, shift it from stump to ramp for another $30, then load it on a truck and take it to a mill. By the time the transport cost is paid that log costs me somewhere between $150 to $200 per ton. Assuming you've got a full truck load of them.

    So it costs me $150 per ton to put logs at the mill
    It costs me $110 per ton to run a sawmill.
    So 3 ton of logs plus 3 ton of sawing brings the price of the ton we get to... $780 that the salable ton owes me.
    We aint talked about treatment yet. Treatment runs at close to $100 per ton.

    All of a sudden the "underpriced" raw material has become quite valuable huh? I get $1200 a ton roughly for GOS hardwood in sizes like 100 x 50, which is $900 in direct costs, and $300 in profit - divide it by the three ton of logs and I got $100 per ton profit for which I had to bust my gut and needed a small fortune in equipment to achieve. You got $50 a ton for sitting back watching a tree grow. Dont complain that you didnt get paid enough.

    Whats my pine worth you ask? Okayyyyyyyyyyy... pine sells wholesale at $600 per cubic meter. Reverse the maths if you like.

    What, you ask, if its a more valuable species.
    Okay so I bought your log, and I sawed it. Same kind of recovery rates, same cost to actually run a mill.
    Then I got to stack it for drying. and held it till it was dry. Maybe I kiln dried it, maybe I waited. But either way its cost me money in either kiln costs or in interest. Because if I have to spend my money today to buy your tree, and cant sell it for another 12 months then that investment is costing me money. I cant go buy beer with it, I cant eat it, and if its funded by an overdraft or other line of credit my bank is charging me for the pleasure of buying your tree off you. Not to mention that I have to have a place to store it in the first place.

    And along the way we run into drying degrade - maybe bug damage, maybe fungal staining, maybe cracks that open up in the timber that we couldnt see when it was green. So the recovery rate drops back even more. We lose another 5% to degrade and thats not just 5%... its 5% of 33% to express it as a fraction of the original log. Yes your log is worth more - but how much has to factor all this in, plus expected sizes it'll cut, plus varying market premiums associated with grade, and stuff beign in and out of fashion. Premium species deserve premium money - but it costs a lot more to get them to market also.

    Anyhow, thought I'd explain that.

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  3. #2
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    Awesome post!

  4. #3
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    This is one of the very best posts I've read in a long time.

  5. #4
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    Sounds like sawdust is in your blood, would you do anything else ?
    I can appreciate what you`ve said and thanks for the thread.

  6. #5
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    Thanks guys. I've wanted to write this for a while: Joe Public wanders in here on a search and walks away with information that's... it's not bad information but it applies to only a small percentage of really high grade logs. Then they think that their local sawmill is ripping them off when they get offered $50 a ton for a log that makes boards that sell for $2000 a ton at the timber merchants way down on the other end of the production line.

    Understanding recovery rates and their effect on costs is part of being a serious sawmiller professional or otherwise. Tracking them is a pain, but essential for anyone who pays for logs to support their sawmilling habit, otherwise how would you calculate how much you can afford to pay?

  7. #6
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    That is an excellent explanation John. In fact it is so well explained that I have made this thread a "sticky" so it sits at the top of this forum so people wanting that information will find it easily. Thank you for your effort.

  8. #7
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    John, you have made the log sawing operation crystal clear as to the procedure!
    I contacted a local Tree Feller to see if he might give me a shout when he may have a reasonable log for me to mill (chainsaw mill) for my hobby. I made it clear that I didn't want to be taking money out of his pocket if he had his own plans to mill it. He contacted me and let me have some Silky Oak that he was in the process of dropping that morning! He was happy for me to have them. I made sure that I loaded them my self so I wasn't costing him anything in labour.

    I milled half of them and they seemed reasonable but as you made clear, its all in the drying as whether the timber will be usable. By way of returning the favour I made some timber shields for him and his mate to mount some antlers and pig tusks on.
    Just do it!

    Kind regards Rod

  9. #8
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    Good post John.

    I get a couple of calls/emails a year from folks asking me how much their tree is worth, which is invariably double speak for "will you buy my log?"
    Before I had timber coming out of my ears, and especially when I was interested in Fruit tree wood, I would occasionally go and take look.
    The trees were nearly always located in a very difficult situations in back yards and I told them I was not insured so would not be able to take them down and to call me when it was down but I would still not guarantee to buy it.
    One bloke with a very large mulberry tree in between his back yard dunny and a neighbours garage did call me back but we could not come to any sort of arrangement.
    He had already paid $1500 to have it taken down and have the branches taken away and basically wanted to cover this cost.
    I told him the bringing down was not my problem and walked.
    I could go on with other examples but the long and the short is there are too many urban trees going for nothing for a small operator like me to pay for logs.

  10. #9
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    Well done John I hear it so often, thinking they are sitting on a gold mine, I tell them it is valuable but not necessarily in $ terms.
    Neil
    ____________________________________________
    Every day presents an opportunity to learn something new

  11. #10
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    Really interesting read John. Whilst I thought I had some idea of the waste and effort involved to get a clean plank to market it's enlightening to have some numbers thrown in to the mix to break down the operation.

  12. #11
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    Well articulated John.

    In my younger days (Looooong time ago!!) I worked for Foxwood in Mareeba NQ. I kept the office tallies, did the math for recovery, production stats, etc.

    You are spot on in your calcs. It's a woefully small recovery rate.

    Mind you the recovery on that 8 foot diameter Kauri-A we brought in one day was spectacular Perfect and honey smooth all the way through, what a beauty. Shame that the Greenies have scared governments off any harvesting at all now.

  13. #12
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    I see an extremely frustrated man here. Who made you upset?





    Visit my website at www.myWoodwork.com.au

  14. #13
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    Great explanation! If only some people weren't as thick as the logs /trees they try to sell you to comprehend this.

  15. #14
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    These two posts are Gold

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