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Can you make money with a kiln?

Started by woodman1876, February 05, 2016, 08:31:09 PM

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woodman1876

I know that there is a reason to sell green lumber, get money quick. The lumber prices that ive seen is .60 to 1.10 board foot cheaper for green lumber than kiln dried. With the shrinkage and handling the lumber is it possible to buy green dry the boards and make a small profit for the average guy? The drying prices are going to be an average .30 a board foot? I know if it was this easy everyone would do it. Just not sure why a mill would miss out of making extra money with a kiln. Is there are real art and learning curve to drying lumber? How difficult would it be to move the lumber? If you cant sell it your done real fast.
Thanks for you thoughts

beenthere

Welcome to the Forestry Forum

QuoteIs there are real art and learning curve to drying lumber?

Yes, I would say there is an art and a learning curve to kiln drying lumber. And it is "real".. but not so tough that a person can't learn how to do it, and do it real well.

There are kiln drying short courses around that would be worth your time if you have any inkling to kiln dry lumber. Will give you a big "leg up" if/when you decide to do it.

Also, learn the tricks of air drying... good stickering techniques, and stacking techniques. There are air drying manuals and kiln drying manuals abound too.
south central Wisconsin
It may be that my sole purpose in life is simply to serve as a warning to others

bkaimwood

Welcome!!! I'm new to drying, but had to provide some input on one of your questions... You mentioned you understand why mills sell green...quick money...that is true, but there's a whole lot more to it than that. One of your questions was to you not understanding why mills would miss out on that, meaning increased profit, opportunity, and so on...there are several reasons. The biggest ones that come to mind first, is, space/storage....manpower, cleaning, stacking, stickering, monitoring loads, unstacking, and, well, you get the idea...from where I sit right now, it takes and costs more to process and dry lumber then it does to acquire and saw logs...by far! On average, dried lumber is worth twice what green lumber is...and that is why. I've had a few wise men give me help along the way, with phrases and statements that have stuck in my head. One said, if you want to make money in this industry, buy a kiln. Don't buy a mill, everybody's got one. And depending on your geographical location, he's right. Those guys almost have to engage kiln drying, otherwise, they'd starve. Others don't have to go that far. I don't want to just make money, so running a kiln operation is not my thing, but to some degree, a necessity. I'm a sawyer at heart, and I like to saw. I don't want anything to do with cleaning, stacking, stickering, and drying...but my region mandates it to survive... Hope this helps..
bk

GeneWengert-WoodDoc

I agree with bkaimwood. 

I suspect that almost every sawmill knows that drying brings more money, but many cannot dry lumber for the reasons listed.  That is, they are content to just saw.  I would add to the list that the biggest factor is that selling KD lumber requires a large effort for marketing KD lumber most of the time.   A small operation probably has more different customers for KD than if they were a large operation. With a small drying operation, their customers might buy a few feet this month and then it might be another month or six months before they need more lumber.   Plus, often you need to carry an inventory of KD material, just in case.

Stated another way, you can dry lumber all day, all week and all month, but until you sell the KD lumber, there is no profit.  A lot of sawmillers are not capable sales persons...they want to saw.  Also, many customers for KD lumber want a consistent supply, month after month.  A small operation has spurts.  Plus most sawmills are not located where there are many customers (cabinet shops, hobbyists, etc.) close by.

When selling green, the lumber goes to an accumulation yard where your lumber and other small mills have their lumber mixed together to make an order and also to provide whatever thickness, species, etc. that the customer wants.  (I have one large client that was supplying lots of lumber to Lumber Liquidators and all of a sudden they canceled all the future orders...kilns are full of KD lumber with no customers yet.  Kilns that are not running do not make money.)

Another thought is that many customers will want a specific grade of KD.  With green, often the purchaser grades the lumber.  So, you might have to learn about grading.  Softwood framing lumber for houses cannot be graded and sold by a small mill for various reasons.

So, is small kiln drying profitable?  Yes, if you like marketing, if you have a reliable customer or two, if you have a storage facility for KD, if you have enough cash to stretch out over the months when sales are slow, and maybe a few other items.

I advise clients that unless the difference between green lumber and KD lumber is over $250 per MBF, drying is likely not too profitable...or stated another way, you should chose species, thicknesses and grades that are at least $250 more when KD.  (Note:  Very seldom is any premium paid for air drying compared to green prices.  So, very few operations would sell air dried lumber...they sell green or KD.)  A sawmill will produce such lumber, but also will produce some lumber (low grade) that does not have enough value increase to afford KD...unless you want to be a non-profit organization.

The cost to dry lumber PER MBF is on the order of $25 for stacking.  Then, except for the white woods like maple which lose color if air dried, the wood is then air dried.  Air drying is not too expensive, but there is an inventory cost, land cost, yard preparation cost, foundation cost, and maybe insurance and tax costs ($20 per MBF perhaps).  The big air drying cost is quality loss.  It is not unusual to find a drop in value of $30 to $50 per MBF in yards that do not use good practices like roofs over piles.  So, air drying is not "set it and forget it" for three or six months, if quality is important.

After air drying, the lumber is moved ($3 per MBF) into the kiln.  The main kiln costs are equipment depreciation or amortization $5 per MBF maybe), energy ($25 per MBF in a DH give or take), labor (Your time is valuable), maintenance, taxes, insurance, and a few small items like lightning, security, etc. 

So, if I brought you a load of 1 MBF, you would incur drying costs of $75 to $120 per MBF (depends on species, equipment, etc.).  And some pieces of lumber are likely to split due to tension in the tree or warp, so we do have to add this.  Then marketing costs, maybe delivering costs, inventory costs (6% of lumber value).  So, although your cash outlay might be on the order of $100 per MBF for drying (some species like pine would be a lot less and some like maple would be more), when you add profit and all the other expenses and risks, I think that you might try and get closer to $200 per MBF at the small and medium size operations.  To be safe, I suggested above that (green - KD) be $250.

When sawmills have the right customers, and the kilns are running all the time, drying is indeed profitable.  In fact, some operations shut down the sawmill and spend most of the time on drying.

I would add that if you have a planer for KD lumber, you open up a whole bunch of new customers.  If you have a small molder so you can make molding, trim, etc, that opens up even more customers...assuming they are not too far away mileage-wise.

There is a discussion of costs at the end of DRYING HARDWOOD LUMBER book.
Gene - Author of articles in Sawmill & Woodlot and books: Drying Hardwood Lumber; VA Tech Solar Kiln; Sawing Edging & Trimming Hardwood Lumber. And more

woodman1876

So most lumber buyers want to stick with a few suppliers that can get them load after load? I thought maybe instead of selling you logs to a mill you could process them and dry them yourself. If a man wasn't in a hurry for money and slowly put together a tractor trailer load of lumber here and there. How hard would it be to get ride of? I just wouldn't want to sell it to a wholesaler and not make as much profit as I could. If you cant sell it I don't care how good it is, you wont make money that's the problem. Do buyers have a problem that a small guy that they don't deal with on a regular basis  dried this load  of lumber and they stay away because they aren't sure of the quality? I didn't know if you have to have a lumber grader's stamp of approval so they know for sure what they are getting.
Thanks for the help

beenthere

You are summing it up pretty well.
No easy answer.

Would you give us an idea what you are sawing, or planning to saw and what production you might be thinking about?

Click your forum name, and it will take you to where you can update your profile with at least your location. Will help with answers and discussion. ;)
south central Wisconsin
It may be that my sole purpose in life is simply to serve as a warning to others

GeneWengert-WoodDoc

No stamp or registration is needed for hardwood grading.
Gene - Author of articles in Sawmill & Woodlot and books: Drying Hardwood Lumber; VA Tech Solar Kiln; Sawing Edging & Trimming Hardwood Lumber. And more

woodman1876

It would more is less be a hobby to start and try to turn it into more. As I have a lot to learn before I could even think about something real serious. I know you wouldn't make a living right away.  Would have access to white oak, red oak, cherry, hard maple, soft maple, popular . Id have to buy logs or lumber to finish a load I'm sure. I wouldn't want to cut all my trees. Production wise don't have a clue maybe starting out just a wild guess 5 tractor trailer loads.  I love being outdoors just trying to think of ways to make it happen. With seeing lumber prices KG vs green and seeing a possible to make a few dollars thought it could be a great way to make extra money.

Quote from: GeneWengert-WoodDoc on February 06, 2016, 03:14:41 PM
No stamp or registration is needed for hardwood grading.
How are buyers guaranteed the grade of lumber that they buying? Especially if they don't know you well.

Ianab

QuoteHow are buyers guaranteed the grade of lumber that they buying? Especially if they don't know you well.

The grading standards are visual and published in a booklet. Anyone can lay a board down and check it with a tape and eyeball, and see if it meets the grade. If more than a certain % of boards in a packet don't meet the grade then the customer is entitled to return the whole load. So missing a couple in a stack of 100 is almost expected, but if a significant number are below grade, it gets rejected.

So anyone that routinely ships product below grade soon goes out of business.

The difference between a trained and experienced grader, and someone like you and me, is that the grader can glance at a board and tell in a couple of seconds what grade it is, and be right 99.5% of the time. A regular woodworker probably needs to consult the grade book, take some measurements and do some quick maths to get the same answer.

The other thing is, you don't HAVE to sell your wood by the official grades. It just gives some industry standards so that people who have never met can trade wood, and KNOW the quality they are getting for a particular price. You are free to sell wood to your buddy down the road using whatever "grade" rules you both agree on. That's more likely to work in a retail situation and speciality wood, where the customer can look at the board, look at the price tag, and make a decision. Buying something "sight unseen" is where you need some accepted standard to work from.

For a small scale operation you might want to look at retailing your wood to local woodworkers etc. Your volumes will be lower, hence less need for buying in logs, and you can get retail prices for your wood. But you then have the hassles of retail sales to deal with. But a small operation can compete better in the speciality areas. If you are trying to sell wholesale you are competing with larger mills, with their lower production costs, better log supply, and reliable production.

Have a look at member WDH's web page. Link on his profile - https://forestryforum.com/board/index.php?action=profile;u=4370

Is that the sort of operation you have in mind?
Weekend warrior, Peterson JP test pilot, Dolmar 7900 and Stihl MS310 saws and  the usual collection of power tools :)

Den Socling

Our vacuum kilns cost more than $100,000 a piece. We are now selling about one per month. We are looking to expanding to two a month because lead time got ridiculous. The real money is in thick wood. How would you like to dry 12/4 Red or White Oak fresh off the saw to 7% in two weeks with zero degrade? There is big money in drying wood. 4/4 is a waste of time unless you have a very big operation.
Our newest design has a kiln charge 50" wide and 17' long. It can gross $80,000 a month in rough, plain, 8/4 Hard Maple. If you could sell them, it could dry more the $200,000 a month in slabs. And they would be 7%, sterile and defect free unlike the junk being sold on the internet. You see why everybody wants one. And base ball bats? We are drying almost all.

GeneWengert-WoodDoc

The grading of hardwoods in North America and much of the world is under the auspices of the National Hardwood Lumber Associarion (NHLA).  The general guideline when grading lumber is that you must be with 5% of the VALUE before the customer can complain about grade...lumber is returned or prices adjusted much.  This procedure allows for errors that are not financially important.  In other words, you might say that all your lumber is No.1 Common, but you could have some FAS and some No.2 Common and if they offset each other pricewise, then there is no basis for a complaint.  This is also how the NHLA evaluates graders, both in their schools and in a company, as well as when there is a complaint...on value.

Incidentally, moisture content is not part of the grade, so if a customer says that they want 500 bf of kiln dried northern red oak, No. 1 Common grade, you need to get a precise MC level from them, and probably the way that the MC will be measured or checked.  Moisture meters vary considerably from one manufacturer to another, so you need to agree on which brand, and maybe which model number, etc.
Gene - Author of articles in Sawmill & Woodlot and books: Drying Hardwood Lumber; VA Tech Solar Kiln; Sawing Edging & Trimming Hardwood Lumber. And more

YellowHammer

"Can you make money with a kiln?" Yes, it can be more profitable than sawing, which simply becomes a method to provide product to feed the real moneymakers, the kilns.

"Can you lose money with a kiln?" Yes, it is a guaranteed, 100% surfire way to ruin every piece of wood that came off the saw if done incorrectly.  There is a reason there are so many sawmills around and so few kilns.  All it takes is a single, simple mistake for a noob kiln operator to ruin one big load of lumber in a kiln, especially if it isn't his, before he realizes he may need to rethink the whole idea.

That being said, it's a lot less sweat to dry a few dozen tons of wood than to saw it!   
YellowHammerisms:

Take steps to save steps.

If it won't roll, its not a log; it's still a tree.  Sawmills cut logs, not trees.

Kiln drying wood: When the cookies are burned, they're burned, and you can't fix them.

Sawing is fun for the first couple million boards.

Be smarter than the sawdust

Peter Drouin

Quote from: YellowHammer on February 06, 2016, 10:54:23 PM
"Can you make money with a kiln?" Yes, it can be more profitable than sawing, which simply becomes a method to provide product to feed the real moneymakers, the kilns.

"Can you lose money with a kiln?" Yes, it is a guaranteed, 100% surfire way to ruin every piece of wood that came off the saw if done incorrectly.  There is a reason there are so many sawmills around and so few kilns.  All it takes is a single, simple mistake for a noob kiln operator to ruin one big load of lumber in a kiln, especially if it isn't his, before he realizes he may need to rethink the whole idea.

That being said, it's a lot less sweat to dry a few dozen tons of wood than to saw it!   



Your not in the wholesale thing are you?
I find green or dry wood, Wholesale is harder to make money unless  you have a lot of $$ and good help. And you can't take a day off. :D
I have a man selling W Pine in NH all KD and plained, V grooved, shiplap, all kinds of things. Some of it sells for less than what I sell green for.  :o
I'm not saying wholesale is bad, It's the money is tight and if you make a goof it can hurt more with a kiln. If I goof with a piece of green it go's in the chipper. :D
You can make money with a kiln with the right market.
I don't have one, and might not get one until I see the $$ around here.
A&P saw Mill LLC.
45' of Wood Mizer, cutting since 1987.
License NH softwood grader.

WDH

Being able to sterilize hardwood to assure that there are no powderpost beetles and being able to set the pitch in pine is a huge advantage if you are custom selling retail.  Sure makes me sleep better at night  :).
Woodmizer LT40HDD35, John Deere 2155, Kubota M5-111, Kubota L2501, Nyle L53 Dehumidification Kiln, and a passion for all things with leafs, twigs, and bark.  hamsleyhardwood.com

oakiemac

Can you make money with a kiln? My answer is yes because I do it all the time. I have 2 simple kilns made from shipping containers. All the wood goes on carts which is pushed into the kiln on tracks. Stickering is a pain but we can do 1000bf with 2 guys in a few hours. I have a small retail shop and I store the overflow in a clear span Quonset type building. I also custom kiln dry other peoples wood. I like it because once it is stickered there is no other work to be done other then lift it onto the carts and off the carts once out of the kiln.
I'm not sure why 4/4 is a "waste of time" I dry a lot of it. I know the small guy can operate a kiln or 2 and make money. Vac kilns are great but the $100k investment is pretty steep. I just wont go into that kind of debt.
Mobile Demension sawmill, Bobcat 873 loader, 3 dry kilns and a long "to do" list.

GeneWengert-WoodDoc

As the capital cost of a kiln operation increases, it becomes very important to keep the kiln running, 24/7, to dry a species and thickness that you can sell promptly after drying, and to know what the competition is doing so you can do better.  ''you can dry lumber all day, every day, but you do not make money until the KD lumber is sold."

There are kiln operator schools every year...at least three.  Attend one and then join one of the kiln associations in your area for more technical info.
Gene - Author of articles in Sawmill & Woodlot and books: Drying Hardwood Lumber; VA Tech Solar Kiln; Sawing Edging & Trimming Hardwood Lumber. And more

Peter Drouin

Quote from: WDH on February 07, 2016, 07:33:08 AM
Being able to sterilize hardwood to assure that there are no powderpost beetles and being able to set the pitch in pine is a huge advantage if you are custom selling retail.  Sure makes me sleep better at night  :).



smiley_thumbsup I'm with you on what you said 100%
You and YH are on it. I went with 2by and big timber, and 1" Pine but, that what moves here in the northeast. And I have rocks in my head. :D :D :D
A&P saw Mill LLC.
45' of Wood Mizer, cutting since 1987.
License NH softwood grader.

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