iDRY Vacuum Kilns

Sponsors:

Price for pallet lumber

Started by reswire, November 18, 2014, 06:45:11 PM

Previous topic - Next topic

0 Members and 1 Guest are viewing this topic.

reswire

I have an opportunity to mill for a local pallet company, and I need to come up with a "break-even" price per board foot.  Local logging prices are between 18 and 25 cents per board foot to buy the logs, and of course there is overhead, overhead and more overhead, once the log hits the ground.  I'll need at least one employee full time, and fortunately my equipment is paid for (except the usual maintenance, bands, insurance, and fuel).  I've been doing okay on travel jobs by charging an hourly rate, but the board foot thing is new to me. 
Locally, the large mills charge around 20-25 cents per board foot, but of course they have higher production machines.  They also have the luxury of buying their logs by the way of volume, when selling by the board foot.
The buyer will accept 3.5x6x? , 3.5x8x?, lengths can vary as long as they are bundled the same length.  Any species is acceptable, any grade also is fine as long as the cant is "sturdy" for pallet use.  So my knowledgeable friends, what should be a reasonable cost per board foot to turn a profit?  Hope I gave you enough info, if not ask and I'll be happy to pick your brains for an answer!! :D :D  ( I feel two men can move,mill, clean, stack and band 1500 to 2000 bdft per day if the logs are decent.  Is this too low an average?  Too high?  What do you average?

Thanks, I need the help,,, 
Norwood LM 30, JD 5205, some Stihl saws, 15 goats, 10 chickens, 1 Chessie and a 2 Weiner dogs...

drobertson

Well, I'm not sure if I can give you an accurate answer as to your location, but will add this for a thought.  Here in so. mo,  cants as you mentioned sell for .30 a board foot.  Pretty much the same exact dimensions, only exception being there are more 4x6's than 8's  and too add, most mills are tie sawing, what does not make a 7x9 or 6x8, even a 7x8 then gets sawed down taking the 1" off to the small pallets size cants.  So, Strictly trying to saw only small cants might put you in a pinch,  Just not sure of all the logistics you might have going there.  Here 1" is a good product of side lumber getting to the largest cant possible for ties, then the 1" goes to the flooring mill.  hope this helps.  The price for the logs is the main concern for just about everyone, the bigger guys can re-coup loss due to volume.   
only have a few chain saws I'm not suppose to use, but will at times, one dog Dolly, pretty good dog, just not sure what for yet,  working on getting the gardening back in order, and kinda thinking on maybe a small bbq bizz,  thinking about it,

bandmiller2

Rewire, we had quite a discussion about cutting pallet wood a wile back if you use the search function. What it all boiled down to was cutting pallet wood is slow starvation they are notably cheap and pay nothing. If you cut hardwoods for other markets and have odds and ends left over it may be worthwile. Frank C.
A man armed with common sense is packing a big piece

WDH

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

red oaks lumber

i agree with frank and wdh :) your efforts would produce more fruit if you cut grade lumber and sold it green to a bigger mill. my .02
the experts think i do things wrong
over 18 million b.f. processed and 7341 happy customers i disagree

hackberry jake

To make it cutting pallet lumber, you would likely need a lot more overhead. Like trucks hauling tree length, lo grade logs to the mill with a buzzsaw style cutoff saw cutting them to length and feeding a double bladed scragg mill to square them up. Then the squares would go through a 6 or seven head resaw. This is how pallet wood is produced around here anyways.
https://www.facebook.com/TripleTreeWoodworks

EZ Boardwalk Jr. With 20hp Honda, 25' of track, and homemade setworks. 32x18 sawshed. 24x40 insulated shop. 30hp kubota with fel. 1978 Massey ferguson 230.

Ron Wenrich

There's a difference between cutting pallet wood and cutting cants.  Usually cutting pallet wood involves cutting stock to a certain thickness, width and length.  Its usually the stuff that's best suited for gang saws or resaws in order to make it cost effective.

Cutting cants isn't a high profit business model.  It can be done, but you need to have the production to make it work.  Small band mills are not productive enough to make it work.

The way most mills make their money is in the jacket boards.  You saw until your grade starts to slip in the next board.  You're always sawing for dollar yield.  At some point, you must make the decision to move on to the next log.  The blocking goes to the highest end value product.  Often that's a tie, but in off species or good timber, it goes for pallet stock.  Pallet is where things go when all other markets are exhausted.  It's shouldn't be a primary destination. 

Part of the business model also has to recognize the value of overrun.  Logs bought on the Doyle scale has very high overrun.  A log can often double in lumber vs the log scale.  That brings log values down, even if prices look high.  Its not a bf for bf comparison. 

The same can be said for sawn material.  A tie that scale 44 bf can only saw 34 bf if you saw the jacket boards and have a 4x6 cant.  I've had bridge timbers go for prices that were so high I could leave clear lumber on all 4 sides.  You can't do it with pallet stock.

I always did okay with pallet cants.  They were part of the mix.  The money wasn't in the pallet, it was in the other cuts.  And  there were times you couldn't move a stick.  What happens to your operations then?  What happens when the price dips?  Pallet companies only come knocking when they can't find supply.  When they have enough, price drops.  It's a fickle market.
Never under estimate the power of stupid people in large groups.

woodmills1

I was once going to get rich cutting pallet stock.  All day uphill both ways slipping in the snow= $165 ::) ;D ;D ;D ;D
James Mills,Lovely wife,collect old tools,vacuuming fool,36 bdft/hr,oak paper cutter,ebonic yooper rapper nauga seller, Blue Ox? its not fast, 2 cat family, LT70,edger, 375 bd ft/hr, we like Bob,free heat,no oil 12 years,big splitter, baked stuffed lobster, still cuttin the logs dere IAM

reswire

I finally got a price from the mill, and they offered .42 per board foot.  When you've got nothing to do, something to do is a real plus.  If I can save the first few cuts for craft/customer lumber, the remaining cant could sell now, and also sell "green", no need to stack or store for long period of time.  I might try it for a few weeks, and see what happens.  I've got a young neighbor who is desperate for work, to help feed his family.  If I can work him a couple of days a week and not go broke in the process, it might be worth it.  Thanks for the advice. ;D 
Norwood LM 30, JD 5205, some Stihl saws, 15 goats, 10 chickens, 1 Chessie and a 2 Weiner dogs...

drobertson

That sounds like a great price,  hope it goes well and the weather holds up too!
only have a few chain saws I'm not suppose to use, but will at times, one dog Dolly, pretty good dog, just not sure what for yet,  working on getting the gardening back in order, and kinda thinking on maybe a small bbq bizz,  thinking about it,

Ron Wenrich

That's about the price in our area.  You might want to look at ties, if you have the log source.  Cut a mixture of ties and pallet.  Some boards aren't worth handling any more than sending them for pallet.  They take 1x4 & 1x6, sorted by width and length. 

If you're hiring the neighbor, make sure your insurances are up to date. 
Never under estimate the power of stupid people in large groups.

Peter Drouin

.42 a bf is just about what we pay for a oak log here and up
A&P saw Mill LLC.
45' of Wood Mizer, cutting since 1987.
License NH softwood grader.

Cedarman

People that ship goods sometimes need a few specialty pallets, but they need them to their specs.  This might be an opportunity to check out anyone in your area that ships.  We make our own pallets to ship lumber.  We make them from poplar that we cut off the property.  Always junk trees.  We make a lot of 8' 4", 10'4" and 12'4" of various widths up to 43" wide.  I say this to just show that you might find a shipper that needs these odd sizes.
All it takes is a chop saw and a nail gun to make.
I include the cost of the pallet plus some profit when I quote shipping.
What is most important to the shipper is having what they want when the want it.  Cheap is not as important.
I am in the pink when sawing cedar.

WH_Conley

I cut cants when I simply can't get anything else out of a piece. I have one company that I make a few pallets for. They are a specialty product, they are odd size, but they are what the company wants and they are willing to pay for them. I build my pallets out of the trimmings from any other product I make.  As far as just sawing pallets parts, the big boys have got the market sewed up by making pennies on the materials. I tried taking all the side lumber that would make a pallet runner and bundling it once.Kept track of number of logs, blades, labor, everything involved. By the time the smoke cleared Me an my equipment make about 20 dollars for a days work. 
Bill

RayMO

You can make good money cutting pallet cants with small band mill as long as your logs are free  ;D
Father & Son Logging and sawing operation .

blade69001

 First you need to seperate your costs from your sales price of .42 bf.
E.G. you can find the logs and get them at .18bf then you cut them and sell them for .42bf your difference is .17bf for pallet lumber or cants? If it is cants and you are able to produce 2000bf in an eight hour day you clear $480 a day before, labor, blades, fuel, insurances, electricity, and waste expenses if you have those. If it is .25bf for logs, then the difference is .17 and the clear is $340 before expenses.
   At this point we have not talked about transportation, logs to you, and material to said pallet company. We also have not discussed any other equipment or any other salable byproduct. Can you sell the boards outside the cant or will you cut the logs in such a way as to produce more cants than boards? Can you sell the slabs too? What will you do with your sawdust?
These are all questions you will have to answer the answers will determine if you make "break even" scratch or produce enough income to replace the equipment that you will wear out producing production volume.
  I buy pallet stock all the time and can tell you that 2000bf a day is not enough to support many pallets a standard GMA pallet is 13.5bf  or a little less than 200 pallets a day from 2000bf not much in the pallet world we are a small shop and produce well over that. What happens when you logs go up to say .30bf and the competition drive your sales price down to .40bf can you still make money then? If so then great if not why not use the pallet market as a secondary market using your finite resource (limited bf per day production rate) to produce products with better margins?

Just my .02 free of charge
Sean P.
Just being me, But it is ok you do not have to like me.

drobertson

Really, it boils down to making enough to make a day, and paying a few bills,  It's time to get off the big bang band wagon and down to putting something on the table and getting through the day.  Not everyone can sell a table top for $300 and finish something for 3K,  the bottom line is getting through the day, feeling good about an honest days work, and Knowing that tomorrow might be a breakthrough.   I'm tired of the negative nanny feed back, some of us folks work hard where we are, we eat, feed our family, and have a good base for a quality of life that might not measure up to many of the standards across the board, but we are real, and this is good enough for us.
only have a few chain saws I'm not suppose to use, but will at times, one dog Dolly, pretty good dog, just not sure what for yet,  working on getting the gardening back in order, and kinda thinking on maybe a small bbq bizz,  thinking about it,

RayMO

I have done the cant sawing thing with a 92 lt40 hyrdo and a part time helper  so I speak from experience when I say sawing pallet cants is a good way to go broke. Sure you can make some good wages if all goes well but then you have a breakdown and have to borrow money to get back up and running often times. If you are unable to haul the logs you buy then you are at the mercy of who ever does haul them .

If I want pallet logs delivered it is at least .30 a foot but still cheaper than owning a truck to haul with. Then it gets muddy and your log supply dries up for a couple of weeks and you sit idle going in the hole once again.The unforeseen will eat you alive in the low margin low production cant sawing business .

Diversity is the way to make a modest living with a bandmill in my experience. Custom sawing for others can help a lot on the bottom line and never get stuck depending on one customer or outlet because things can change overnight and leave you hanging.
Smaller logs can help as you gain a fair amount of over run but with less production .

Father & Son Logging and sawing operation .

drobertson

 This is what I tried to stress in my first post, not to put all the eggs in one basket,  but will say one formula is not the same for all folks.  and a pay check at the  end of the week Is what most folks live off of.  We all do not have financing that provides for the low cycles.  Cash speaks volumes at the check out isle.
only have a few chain saws I'm not suppose to use, but will at times, one dog Dolly, pretty good dog, just not sure what for yet,  working on getting the gardening back in order, and kinda thinking on maybe a small bbq bizz,  thinking about it,

Cedarman

I would look at making pallet lumber like I look at making mulch out of our cedar.  All slabs and edging strips plus floor sweepings go through the hog and into mulch blown into a trailer.  By the ton, I get 1/2 for the mulch as I pay for the logs.  So if I was in it to make money, mulch would be a loser.  But mulch is a side product that we make when we saw high value items from the cedar logs.
We take orders for the highest profit items , but take lower profit orders to keep the mill running.  Least profitable orders are turned down.
To me, for a small mill, pallet lumber is what you make while producing higher profit items like railroad ties etc.
You might even have to sell the pallet lumber at a loss, similar to mulch.  But pallet lumber is a by product, so anything you get helps increase the bottom line.
What most of us are saying is that pallet lumber should not be a primary product.
I am in the pink when sawing cedar.

RayMO

Ironically some of the best money I ever made on my Woodmizer was cutting random width cants. However they were ERC cants and I cut all the cedar trees myself for next to nothing as the land owner was going to doze the area off . Man I love sawing ERC even when it is less profitable  8)
Father & Son Logging and sawing operation .

barbender

There is a company near me looking for basswood lumber (they make wood door and window shims). They are paying 42.5 cents bf for 1 1/2 x 6 and 1 1/2 x 8 lumber. I'm considering sawing a few units just to see how it goes, I can buy the basswood logs for $100 a cord (.20 bf, right?) this doesn't leave much of a margin, but my experience with the WM is I usually get about 750 bf per cord with decent logs (everything 8'). The difference with this versus the cant sawing situation is there won't be much side lumber, maybe a little 1x material. What I'm saying is I can basically turn the whole log into product, so it is pretty staight forward.
Too many irons in the fire

red oaks lumber

that company payed us a visit .i pushed the pencil hard and couldn't make it work. the head guy was trying real hard to get us to give it a go.our basswood log costs are .35 b.f.
the thing most small sawyers don't take into concideration, sawing for wages won't replace the equipment when it gets worn out .
the experts think i do things wrong
over 18 million b.f. processed and 7341 happy customers i disagree

Ron Wenrich

You'll find that you have more waste sawing dimension stock that is limited to only a couple of sizes.  Sawing all boards and no cants would result in more cuts, which means less output in a day.  That raises your bf production costs.  Is there any grade restrictions on the basswood? 

We never cut too much basswood, and when we did, we used it for carving stock.  We only saved higher quality logs.  But, our normal sawing patterns would be to saw off the good grade for the higher end markets.  Then, we would address the blocking markets.  The dimension stock would be cut from lower quality side cuts and then cut down into a cant or two.  We also had edgers that would cut the dimension stock and not hurt our production.
Never under estimate the power of stupid people in large groups.

barbender

ROL, I agree, a lot of small guys figure they make $200 in a day and it all goes in their pocket, and have nothing to replace equipment with or even do proper maintenance.
     This being viable would depend on what I could get logs for, and my daily mill production. There are only 2 markets for basswood logs up here, a pallet mill and a grade hardwood mill. The pallet mill is about 80 miles from me, and the hardwood mill is 100+. The pallet mill is paying $95/cord for 8' basswood, but it allows crook and 6" minimum. I think the hardwood mill pays $140 or more, 10" minimum. So I think I could get logs for $100/cord, with a say a 9" minimum by providing a closer market. As for production, I would hope for 1500-2000 bf a 10 hour day. The buyer will transport if I can provide a semi-trailer's worth to pick up. I don't have time to do it right now anyways, so it's just speculation at this point. If it was .50/bf it would make a big difference.
Too many irons in the fire

Thank You Sponsors!