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Author Topic: How to Price logs  (Read 1202 times)

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Offline forester2009

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How to Price logs
« on: September 07, 2014, 09:49:28 PM »
When it comes to purchasing grade logs how do you guys come come up with pricing?  I know my sawing cost and I know what the end product in paying. But I'm guessing at best, as to how much of particular grade I will pullout of a log or logs.  Does anyone have a good rule of thumb they like to use for determining log purchasing price?
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Offline POSTON WIDEHEAD

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Re: How to Price logs
« Reply #1 on: September 07, 2014, 09:58:40 PM »
I have nice Pine logs that come into the mill yard.
The loggers usually have a set price of around 200-250 / thousand in my area.

I have others who bring logs that are not really pro loggers that take logs to a mill but saw logs to get their best price at a sawmill. The reason is, its a good drive to the paper mill and they factor in their fuel and time. Sometimes I can buy their logs for 150-200.

I never give a price until I inspect the logs. I deduct for crooked logs, disease logs, diameter to small to be considered a saw log, knots and suspect metal.

Buy them as cheap as you can..they're at your house. :)

This is just PineMy technics for buying Cedar and Oak may vary. Most of my Poplar is given to me and I get tons of Sweet Gum for free that I saw into barn siding.
The older I get I wish my body could Re-Gen.

Offline beenthere

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Re: How to Price logs
« Reply #2 on: September 07, 2014, 10:03:44 PM »
For hardwoods, here may be a .pdf that will help you figure it out. Many logs went into this data bank, and the NHLA lumber grade yield data were compiled for log grades (shown in a table) by species, and by log diameter.

http://www.fs.fed.us/ne/newtown_square/publications/research_papers/pdfs/scanned/rp468a.pdf

Shortcut but rough approach for log grade is for:
 grade 1, 3 clear faces,
grade 2, 2 clear faces, and
grade 3, one clear face.

Can use today's lumber prices to get comparative value.
south central Wisconsin
 It may be that my sole purpose in life is simply to serve as a warning to others

Offline Ron Wenrich

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Re: How to Price logs
« Reply #3 on: September 07, 2014, 11:47:31 PM »
One thing for certain is that you're not going to buy any logs if you're lower than your competition.  Find out what they're paying.  Loggers will tell you and you may find be able to get a price sheet by calling.

You may also find that you won't be able to compete for a certain quality of log.  There are lots of mills that make a living off of low quality or just high quality of log.  Those that concentrate on a certain quality of log will offer a higher price on those, and a lower price on the quality that can't use.

Also keep in mind that many mills will have their own grading system.  Some will require clear faces, but I've seen a lot of grade rules that rely on the number of knots allowed.  The longer the log, the more knots that are acceptable to make a grade.  Some will also restrict knot size for various grades.

Loggers will judge you with your ability to give a fair grade and scale.  No use setting a price and grade standard, then beating a logger with a scale stick.
Never under estimate the power of stupid people in large groups.

Offline captain_crunch

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Re: How to Price logs
« Reply #4 on: September 08, 2014, 12:05:46 AM »
Unless junk  mills in Oregon pay 600 per thousand Fir lumber sells for 250  per thousand try to compete with that
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Offline backwoods sawyer

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Re: How to Price logs
« Reply #5 on: September 08, 2014, 12:58:02 AM »
I do!!!
I never take ownership of logs and my rates are $300 per thousand.
I just do not mill many 8' economy 2x4 jobs ;D
 



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Offline Magicman

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Re: How to Price logs
« Reply #6 on: September 08, 2014, 07:41:00 AM »
That is also my niche Harvey.  Portable sawmilling does have some perks.   smiley_thumbsup

Gotta go now, there are some White Oak logs waiting for me this morning.   ;D
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Offline forester2009

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Re: How to Price logs
« Reply #7 on: September 08, 2014, 08:29:38 AM »
If you are controlling your log price,  should the whole log be profitable?   Such as pallet cant or tie.  Hopefully the high grade lumber you are taking off is your profit.  But should you lose money on the tie or pallet cant?
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Offline Ron Wenrich

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Re: How to Price logs
« Reply #8 on: September 08, 2014, 09:08:37 AM »
No.  You can't expect a log to give you profit from the first cut to the last.  If that would be the case, you would be pricing your logs at pallet price less sawing costs.  That won't work, and you won't be buying any logs.  I have seen stumpage go higher than pallet.  I've seen high quality cherry stumpage go for more than FAS.

What you need is the average of your log in lumber value.  Good logs produce a higher percentage of upper grade lumber.  The log price reflects that.  Your job as a mill manager is to figure out what those percentages are, then develop your log grades and pricing around that.  Your markets will come into play, as well as cutting patterns.

Your equation should look like profit = lumber value - log costs - mfg costs.  If you want the breakeven point, then log costs = lumber value - mfg costs.  Lumber value would be the yield in the log and residue value, such as dust, chips and bark.  You will most likely have an overrun from sawn lumber to log scale.  That is also a factor to keep in mind.

If your lumber value average on a certain quality log is $750 and your sawing costs are $250, then your breakeven is $500.  If the average is only $500, then breakeven is $250.  You can do a log run of a certain quality, look at the amount of lumber you get for each grade class, and set your price from that.  It doesn't have to be as cumbersome as doing it on a per log basis.
Never under estimate the power of stupid people in large groups.

Offline jrose1970

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Re: How to Price logs
« Reply #9 on: September 26, 2014, 08:16:54 AM »
Hey everyone!
   What would be an average price for grade 2 chestnut oak and grade 2 poplar? I know it varies, but just a ballpark.
Thanks in advance!
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