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General Forestry => Drying and Processing => Topic started by: Charles on September 17, 2009, 09:31:07 PM

Title: Cost of drying lumber
Post by: Charles on September 17, 2009, 09:31:07 PM
I have a small DH kiln that I built for drying my own lumber as I need it (2-300 bd ft). I had no intention of drying for others, BUT around here it is almost impossible to get small quantities dryed anymore, SO I am being asked more and more to dry small qantities.
My question is: how does one determime a price for drying. Should it not be so much per bd ft per day since air dried will dry faster than wet lumber off the mill. I have taken the amperage of all the elec. units in the kiln and will be installing hour meters on any elec. units that cycle to determine on time. This is the only way I can think of to determine daily cost of hydro.
When somebody says that they dry lumber for .35 cents a bd ft what are they saying. What is a reasonable rate for drying and how do you guys determine a cost.
Thanks for any help

Charlie
Title: Re: Cost of drying lumber
Post by: OneWithWood on September 18, 2009, 10:01:28 AM
You are on the right track.
Determine what your cost per day is to dry a full load.  Add a markup that makes it worth your time and you will have a price that works.
Title: Re: Cost of drying lumber
Post by: solidwoods on September 20, 2009, 10:31:30 AM
Our rate is
Kiln drying.       
$.20 bf, 1" thick material 1000 sq' or more.
$.25 bf, 1" thick material 500-999 sq'   
$.30 bf, 1" thick material 1-499 sq'   
For thicker material add 10% more per qtr. thickness.

15%mc or less is 25% less cost.
jim
Title: Re: Cost of drying lumber
Post by: Charles on September 20, 2009, 09:34:43 PM
Thanks for the info guys it was very helpfull

Charlie
Title: Re: Cost of drying lumber
Post by: red oaks lumber on September 21, 2009, 06:05:36 PM
we charge .20bf no matter the quantity(sp?) our kilns are so booked up most wood is somewhat air dried anyway, so there is no break on mc
Title: Re: Cost of drying lumber
Post by: DR_Buck on September 29, 2009, 11:06:02 PM
QuoteWhen somebody says that they dry lumber for .35 cents a bd ft what are they saying.


They're saying that they are cheap.  ;)   I charge 60¢ a bf no matter the quantity or initial MC.   It must be OK because I've been keeping the kiln going.  ;D   
Title: Re: Cost of drying lumber
Post by: Ironwood on September 30, 2009, 10:31:38 AM
I like .50 cent or more. For me they are really paying for my time and handling.

Ironwood
Title: Re: Cost of drying lumber
Post by: scsmith42 on September 30, 2009, 12:11:51 PM
Quote from: Ironwood on September 30, 2009, 10:31:38 AM
I like .50 cent or more. For me they are really paying for my time and handling.

Ironwood


+1.  I charge a daily rate, which usually equals out to .50 - .70., depending upon the species.  I also charge for handling on loads less than 1000 bd ft.

In the archives is a post that I made several years ago on this very same topic.  I looked at it from not only direct costs, but also depreciation, return on investment, business taxes, repair costs, labor, etc. 

When I made the investment in my kiln, it was in anticipation of the following:

1 - I would have a positive return on that investment, the same as if I had put it in a CD.  Typically I like to see at least a 10 - 15% return, which means that I should generate 2 - 3K annually in ROI from the 20K investment in my kiln.

2 – If my business had to borrow the money to make the investment, then not only should I see a positive return on the investment for my business, I would also need to factor in the payments on the loan.  Using simple arithmetic, if I amortize 20K over 5 years then I'm looking at 4K per year in payments.  So I'm now at 7K per year for investment return and payments.

3 – A kiln is not going to last forever – it is a depreciating asset.  Thus, over a period of say 7 years my 20K investment will disappear.  I need to recover that money, in addition to my return.  Simply put, figure another 3K per year in depreciation.

So now I'm at 10K per year, just for ROI, payments, and depreciation.  If my kiln stays in operation for 50 weeks per year, then I need to generate $200.00 per week, or $28.57 per day, before labor and operating expenses, just to cover principle, interest, depreciation and ROI.

4 - Next, we have labor costs.  It takes two men several hours to stack, sticker, load, baffle and unload a 4000 bd ft kiln.  As a business owner, not only do I need to recover my labor costs, I also need to make a profit on that labor.  So, if I'm paying two guys 15 bucks an hour, by the time that I calculate in overhead, taxes, etc, that 15 bucks an hour is now somewhere around 23.50 per hour each.  If I want to make 30% profit on their labor, it is now 33.57 per hour each, or $67.00 for the pair.  If they are able to load/unload 4000 bd ft in 6 hours, I now 200 bucks in loading/unloading costs, plus 30% profit.

Based upon a 30 day kiln cycle, that's another 6.71 per day, for a total of $35.28 (labor and ROI, payments and depreciation). 

5 - Now, we have operating costs.  It seems like on an annual basis I'm spending around 1K in spare parts, maintenance costs, etc. on the kiln .Another 2.85 per day, taking our total up to 38.13 per day.

6 - Next, we have utility costs.  These are going to vary depending upon several factors, including your utility rate, how well insulated your kiln is, and your average temperatures, just to name a few.  Maybe another 6.60 bucks a day if your bill runs $200.00 per month.  So we're at 44.73 per day. 

7 – If one man spends 30 minutes per day in checking the load, doing the sample boards, etc, then you're looking at another 16.78 bucks a day in labor (1/2 of the estimated 33.57 estimated actual labor cost + profit), taking us to $61.51 per day.

Thus, if I have 4000 bd ft of 4/4 oak wood in my kiln – dried from green - my costs plus a small amount of profit will be 1,843.30 for that load, or .46 per bd ft.

But what if the load is less than 4K bd ft?  My daily operating costs remain pretty much the same, my depreciation, ROI, and daily labor costs are about the same, perhaps I have a small savings on the labor associated with loading and unloading (estimated 50 bucks for 1.5 hours of time savings), but that's about it.  It will still take 30 days in the kiln to dry 3000 bd ft of 4/4 oak from green to 8%. 

So if I subtract 50 bucks from the 1843.30 for the load, I'm at 1793.30, divided by 3000 bd ft., or .59 per bd ft.

If you're drying 100,000 bd ft at a whack, with a kiln that's heated by waste wood, perhaps you can get your costs down low. 

IMO, the reality is that most folks do not charge enough to kiln dry.  I look at many of my fellow Forestry Forum members with nothing but respect for their hard work and desire to be independent businessmen.  They work incredibly hard for not a whole lot of income, and unfortunately too many end up going broke down the road because they did not charge enough for their efforts.  And the rest of us have to compete with that, which only keeps the prices artificially low.
Title: Re: Cost of drying lumber
Post by: red oaks lumber on September 30, 2009, 01:14:35 PM
 i dry wood  so "cheap" because of several factors.
1) we dry 15000 bf per load
2) we use loaders can fully change in 30 min.
3) only put in air dried wood under 15% mc
  why spend money drying wood that mother nature does free, on ave we dry 45000 bf per month, electric bill runs 800.00 per month. so 45k bf@ .20 bf =9,000.00  subtract my elec thats a good return on investment. wood is only worth so much if costs are to high its over valued not a good deal for anyone
Title: Re: Cost of drying lumber
Post by: scsmith42 on September 30, 2009, 02:47:38 PM
Quote from: red oaks lumber on September 30, 2009, 01:14:35 PM
i dry wood  so "cheap" because of several factors.
1) we dry 15000 bf per load
2) we use loaders can fully change in 30 min.
3) only put in air dried wood under 15% mc
  why spend money drying wood that mother nature does free, on ave we dry 45000 bf per month, electric bill runs 800.00 per month. so 45k bf@ .20 bf =9,000.00  subtract my elec thats a good return on investment. wood is only worth so much if costs are to high its over valued not a good deal for anyone

Red Oak Lumber - I applaud the volume and scale that you're doing, and clearly it increases your efficiency. 

However, your answer above really does not address the issues that I brought up in my post. 

$9,000 less electrical cost does not consitute a"return on investment" - rather it is gross revenue less utility costs.  Also, changing the load in 30 minutes with loaders does not address the time to stack and sticker the lumber to begin with, or destack it after it comes out of the kiln.  Nor does it take into account the land required for air drying, cost of any air drying sheds (if  used), depreciation costs of the kiln, maintenance costs, property and business taxes, losses due to degrade, etc.

If you take some time to apply the concepts outlined in my post to your business, and analyze your actual costs, you might be surprised as to what your true "Return" is. 

I respect what you're doing; please do not construe my answer to be disrespectful as that is not my intent.

Regards,

Scott

Title: Re: Cost of drying lumber
Post by: DR_Buck on September 30, 2009, 05:35:47 PM
Quote.........IMO, the reality is that most folks do not charge enough to kiln dry.  I look at many of my fellow Forestry Forum members with nothing but respect for their hard work and desire to be independent businessmen.  They work incredibly hard for not a whole lot of income, and unfortunately too many end up going broke down the road because they did not charge enough for their efforts.  And the rest of us have to compete with that, which only keeps the prices artificially low.

Well put Scott.  An excellent response and post.   Everything has to be considered otherwise your losing $$$. 
Title: Re: Cost of drying lumber
Post by: Ironwood on September 30, 2009, 07:54:11 PM
Um whicha Scott.

Addtionally, how about return on the capital invested in that BIG loader. Sure it does it fast but you gotta have return on that too. If you specialize in Oak then air drying is totally reasonable and most yards do air dry first anyhow. Do you keep it in a building? Even if just outside, you still have "maintanence" costs to assembling those stacks and keeping them out of the elements.  Just a thought.

Ironwood
Title: Re: Cost of drying lumber
Post by: red oaks lumber on September 30, 2009, 09:15:15 PM
let me explain further
first we sticker wood when we saw so no double handling, down sticking comes at the planer or rip saw, so no double handling. if all i'm doing is k.d. for customer they down stick when picking up.
far as the land it's been in the family for years, no purchase cost to me.
big loader- no, john deere 328 skid loader which i run w.o.t. lol. this is used at the sawmill, planer mill, where ever needed, plow snow, grade the yards, load and unload trucks ect.
really k.drying is just a small part of my buisness, it is a tool for more value added to my products. if i was only drying wood for other people all my depr. building maint. taxes ect. would have to come from the reve. generated you are correct
  if your or any buisness has a high operating cost for services is it really the customers fault?
shouldn't the goal be to reduce the costs which gets past on to the customer.
i know this statement might sound off to some,but, my therory is . being the most efficent as posable(sp)  running a low overhead leads to a lower price. which results in more work
we operate on volume, fixed costs are there weather you handle 1 board or 1 million
  the bottom line is .. there isn't much money in wood, plain and simple, there is to many options , sheetrock, steel, carpet, vinyl ect. if the price for wood is to much your'e not working. do i think we should charge more? oh hell ya but the markets won't allow for that
i'm not a writer i work with wood so sorry about the windy response. feedback always welcome
Title: Re: Cost of drying lumber
Post by: raycon on September 30, 2009, 09:57:40 PM
I hear you as well Scott.  
 
Looking at the  Hardwood Market Report (HMR online sample report for may 2009) the difference in pricing between KD  (4/4) red oak and green oak ranges between 200 and 300mbf when dealing in trailer load quantities. 200-300mbf to KD red oak in volume.

That be a tough market to make a living in. Don't see any reason for a small operation to try. 300 bdft. I'd not be surprised locally to hear it quoted at $1.00 a bdft.


On edit I hear what you're saying red oak as well. 

Title: Re: Cost of drying lumber
Post by: scsmith42 on October 01, 2009, 12:07:57 AM
Quote from: red oaks lumber on September 30, 2009, 09:15:15 PM
let me explain further
first we sticker wood when we saw so no double handling, down sticking comes at the planer or rip saw, so no double handling. if all i'm doing is k.d. for customer they down stick when picking up.
far as the land it's been in the family for years, no purchase cost to me.
big loader- no, john deere 328 skid loader which i run w.o.t. lol. this is used at the sawmill, planer mill, where ever needed, plow snow, grade the yards, load and unload trucks ect.
really k.drying is just a small part of my buisness, it is a tool for more value added to my products. if i was only drying wood for other people all my depr. building maint. taxes ect. would have to come from the reve. generated you are correct
  if your or any buisness has a high operating cost for services is it really the customers fault?
shouldn't the goal be to reduce the costs which gets past on to the customer.
i know this statement might sound off to some,but, my therory is . being the most efficent as posable(sp)  running a low overhead leads to a lower price. which results in more work
we operate on volume, fixed costs are there weather you handle 1 board or 1 million
  the bottom line is .. there isn't much money in wood, plain and simple, there is to many options , sheetrock, steel, carpet, vinyl ect. if the price for wood is to much your'e not working. do i think we should charge more? oh hell ya but the markets won't allow for that
i'm not a writer i work with wood so sorry about the windy response. feedback always welcome

Red Oak - your thoughts are well presented and make good sense.  On the one hand, your KD operation could almost be construed to be a "loss leader" in that it provides increased volume and overall profitability for your entire business operation. 

Your thought re efficiency are right on too.  Hell, I even agree about running the skid steer at WOT! :D

Thanks for taking the time to help us better understand your operation.

Us little guys cannot compete with the higher volume operations such as yourself or others with an even greater volume, but if we price ourselves too low then we will be out of business too.  And the customer bringing you 200 bd ft of lumber to dry on a one time basis should not necessarily get the same deal as the guy that brings you 10,000 bd ft per month either.

I think that one key to business success is to recognize where profit opportunities exist, and to take advantage of them when possible.  Let's face it, there are a lot more "loss opportunities" than "profit opportunities"!   :D

No matter what size operation you have, along with hard work a thorough understanding of the entire financial picture is key to being able to stay in business and make a reasonable profit.
Title: Re: Cost of drying lumber
Post by: DR_Buck on October 01, 2009, 07:19:27 AM
QuoteI even agree about running the skid steer at WOT!


What's WOT ?
Title: Re: Cost of drying lumber
Post by: raycon on October 01, 2009, 07:32:12 AM
WOT == Wide Open Throttle
Title: Re: Cost of drying lumber
Post by: red oaks lumber on October 01, 2009, 01:13:41 PM
i think you guys drying wood only should get .40-.60 bf for your efforts, here is the angle, jon doe has some oak logs from his woods he wants sawed, he finds a sawyer for say .40 bf, he then brings it to you( general terms) for k.d for say .50b.f., now he needs it planed, the guy down the road will plane it for maybe .35 b.f. now he has 1.25 bf. in his lumber which is still woods run, not to mention his time and gas hauling it all over. next time jon doe says pith on that idea i'll just buy my oak  select &better for 1.50 bf. and the guy using pine gets even less bang for his buck
so sometimes charging what is real and what we want to be real can be complete opposite.if the customer still feels it works for him(repeat customer) great ,but most will not do it again, aka no work
for me  aliitle bit of something is better than a whole lot of nothing, just my thoughts.
12 years ago is when i started, just drying wood in my nyle l200 dh so i really do know where you guys are coming from.
   keep your eyes on the horizon and the wind to your back each step foward and non back!!
Title: Re: Cost of drying lumber
Post by: Den Socling on October 01, 2009, 02:16:48 PM
In my opinion, small kiln operators are taking in small jobs and should demand a premium. The big guys are more efficient and will be cheaper but don't deal directly with individuals. Whether you are big or small, you need to take Scott's approach if you want to make a living. If the market won't bear your price, find a new line. I'd be embarrassed to tell you how much I charge to dry 12/4 flitches in my vacuum kilns and they are piled up outside. Even if you love the work, as I do, everybody needs to make a living.

Thanks for defining wot.
Title: Re: Cost of drying lumber
Post by: Brad_S. on October 01, 2009, 06:10:01 PM
There is no where around here where Harry Homeowner can buy red oak at $1.50 a bdft. A good deal bargain would be $2.50 and retail is around $3.
Many of the customers I worked with did the process more as an experience than a money saving exercise anyhow. Having me saw and dry the lumber from their logs also allowed them to color/grain match their wood perfectly. Most would rather spend hour upon hour planing their rough cut lumber than pay even 10¢ a foot for planing. Again, the "experience". Many jobs were processing "sentimental" trees where price was no object. And who among us hasn't taken great satisfaction from building something from a tree we felled, sawed, dried, planed, shaped, assembled and finished? Many of my customers were no different. Most don't mind paying a premium for the sawing/drying service. If they did mind, I would rather they went to red oaks to buy thier lumber.
To set a price based on what one feels is "fair" to the customer without analyzing the true cost like Scott outlined is not a good strategy. I know because I've been there.
Title: Re: Cost of drying lumber
Post by: red oaks lumber on October 01, 2009, 06:25:24 PM
den,
just because your small scale, your drying is worth more than someone else? how does that math work, i deal with people that have 50 b.f. to dry or 5000 bf i'm no different than you. just way more efficent at it. why is it people are upset because i charge less but probably make more money?
look up the thread wanting to know pricing. you'll see all my pricing ,not very expensive the reason for that is we are very efficient at what we do.
i started 12 yrs. ago with only a small kiln, since that time have grown into a full on manufacture of wood products, last year i had a appraisal done for the bank, just equipment, buildings no inventory it came in just under $ 500,000.00 total what i still owe is  about $ 80,000.00 my raw inventory runs around 80-100K. but you guys are right i can't be making money!   i am not patting my own back here just showing you by being "cheap" i still make a living. if you guys can stay booked out for months ahead charging that go for it! but if not, price is the reason, not lack of work out there
if nothing else this thread has been very informative and insightful
we don't set our price the customers do
. real easy if they buy it's priced right ,if they don't it's to high it's up to you to decide where that happy median is. far as buying red oak i can drive 6 miles up the road and buy it for 1.50 mind you it's not the local lumber yard  but a sawmill selling to the public for that price
Title: Re: Cost of drying lumber
Post by: red oaks lumber on October 01, 2009, 06:31:08 PM
 a foote note: my area of wisconsin in a 30 mile radius there are 11 mills doing what i do, can you say competition
Title: Re: Cost of drying lumber
Post by: Ironwood on October 01, 2009, 07:32:15 PM
Foote note sums it up real well. You have no choice.

Ironwood
Title: Re: Cost of drying lumber
Post by: brdmkr on October 01, 2009, 09:33:37 PM
It seems to me that we are talking two entirely seperate bussiness models here.  If I brought 600 bdft of red oak fresh  off the saw to a larger operation,  I doubt that they would dry it for what red oaks charges. There is no doubt that larger outfits make their money on volume.  We have a local guy here that runs a pretty sizeable operation.  He charges about 20 cents a bdft to dry.  He will dry small lots IF their lumber is already AD and if he can fit it in with a larger load or if it is the same species and MC as what he is putting in the kiln etc.  If someone wanted 1000 bdft dried right off the saw, I suspect he would send them elswhere.  That is not what he does.  Don't know that for sure though. 

It seems to me that there is a market for drying smaller loads, and when the customer wants a small load dried, he understands that he will either have to jump through a few hoops or pay a little more.

So far, I have not dried a board for anyone other than myself, but I would not dry 1000 bdft of hdwd for 200.00.  I MIGHT dry pine for that IF the customer loaded and unloaded the kiln.
Title: Re: Cost of drying lumber
Post by: beenthere on October 01, 2009, 11:05:04 PM
Quote from: red oaks lumber on October 01, 2009, 06:31:08 PM
a foote note: my area of wisconsin in a 30 mile radius there are 11 mills doing what i do, can you say competition
What is your area in WI?
Title: Re: Cost of drying lumber
Post by: Ironwood on October 02, 2009, 08:59:40 AM
Brdmkr,

Good post was thinking the same verbage last night.

Ironwood
Title: Re: Cost of drying lumber
Post by: LorenB on October 05, 2009, 02:43:28 AM
This has been a great discussion, especially with the excellent analysis by Scott. 

To help you with your initial question, Charlie, check this link on eBay:

http://cgi.ebay.com/ELECTRIC-WATTHOUR-METER-240-VOLT-200-AMP-ABB-TYPE-AB1_W0QQitemZ130273717432QQcmdZViewItemQQptZBI_Electrical_Equipment_Tools?hash=item1e54eb2cb8&_trksid=p3911.c0.m14 (http://cgi.ebay.com/ELECTRIC-WATTHOUR-METER-240-VOLT-200-AMP-ABB-TYPE-AB1_W0QQitemZ130273717432QQcmdZViewItemQQptZBI_Electrical_Equipment_Tools?hash=item1e54eb2cb8&_trksid=p3911.c0.m14)

That's a guy who has electric meters, just like the one on your house, for sale.  I bought one and found that he can take a long time (up to three weeks) to ship it to you, but I eventually got a meter delivered to my door for under $30.  My electrician checked it out and now wants to order some for himself. 

I intend to install this meter on the electrical panel in my kiln building which is under construction.  It will allow me to get a better handle on my costs. 

Best of luck,
Loren
Title: Re: Cost of drying lumber
Post by: PineNut on October 05, 2009, 12:59:34 PM
I installed a personal electric meter at my mill. The electric company while reading meters saw it and tried to read it also. Electric company had to send someone out to make sure it was not their meter. I now have a sign by the meter saying that it is a private meter.

Title: Re: Cost of drying lumber
Post by: red oaks lumber on October 05, 2009, 06:38:31 PM
here we go again lol.
i understand small kilns need to charge more. to lower your cost per bf. per month simply dry more wood. case in point i stated my electric runs 800 per mo. last month i dried 82500 bf. my ave is 45000 bf. so by almost doubling bf that brings the cost down.
to say you will dry green off the saw really means your kiln is slow.back when i had just a small kiln i dried 1 green load, never again
scott- you say it takes 2 men 6 hrs. to change a charge by hand. what are they doing with their time? my (small) kiln 4000bf. was changed by hand 1 guy 6 hrs. baffled everything, also  why pay someone 15/ hr.for just labor job? arn't there kids in your area?
somethings i did to cut my costs: put my kiln on offpeak elec. cut by just under half, very few days a year it was off. don't run electric heat use hotwater heat same as the shop.
built a track and cart system to load and unload kiln, total time to change load 1 hr. also put in a second kiln unit which gives you twice the dryng  power.but the single biggest cost  savings, i won't dry green wood! nature does the bulk of it  and she has never sent me a bill yet.
i'm not picking on anyone here so don't take it that way, just giving you somethings to think about
Title: Re: Cost of drying lumber
Post by: oakiemac on October 05, 2009, 08:49:23 PM
In my area there is a large kiln outfit that will dry for 150/MBF. But I dont think they will take less then a few thousand feet. I'm kind of with red oak on this as I charge 30-35 cents for smaller orders and for one guy that sends me lumber all the time I chage 22 cents.
There is no way I'd get any business if I charged 50 cents or more.
I pay highs school kids to load and unload or at least I did until the economy tanked. Now I have freinds with small childern that are unemployed  so I have them do the kiln for some cold hard cash. My 3000 bf kiln can be unloaded in 2 hours and reloaded in about 4 using 1 to 2 guys. Average electric cost per kiln is $150/month plus $80 or so to load thats $230. If kiln is got 2500bf at 30 cents I net $520. I know that doesnt take in depreciation and other factors but it does help pay the bills.

I do dry some wood green. Mother nature dont charge but she aint' free. There is no control when air drying and Oak (especially white oak) can check in air dry conditions. Also maple can stain. Most of the time I try to air dry but it is not always the best. In the winter you dont get much air drying anyhow.
Title: Re: Cost of drying lumber
Post by: Kansas on October 07, 2009, 09:36:45 AM
We charge 40 cents a board foot to kiln dry.We air dry all lumber before going in the kiln, to somewhere around the 14-18% range. I'm not sure 40 is enough. Our problem with custom drying is that a customer is likely to bring in an 8 ft log, a 10 ft, a 12. We prepackage and load in the kiln with the skid steer. Normal packages are 10 rows high by 4 foot wide. With custom drying, the packages are usually misshapen and wastes space.
Title: Re: Cost of drying lumber
Post by: Charles on October 07, 2009, 10:03:28 PM
Thanks Loren for the tip on installing a meter. I checked around here and have a used one coming to be installed. Excellent idea, will be able to tell exactley how much hydro was used. That was my biggest concern. This thread has given me a wealth of info. Thanks to all who have contributed and all the different angles at calculating cost. I never thought it would get this interesting. I think I may have about 500bft to dry so it will be 2 loads. So if I get to dry it (which I think I will ) I will keep track of everything  and I will post the results. Should be interesting. It may not happen soon as I have told the customer that I would like the lumber to be air dried to about 20% first because I think the cost may be a little high if I dry it greener. We shall see

Thanks for all the info and any more that may come

Charlie
Title: Re: Cost of drying lumber
Post by: Kedwards on October 21, 2009, 06:55:39 PM
Quote from: scsmith42 on September 30, 2009, 12:11:51 PM
Quote from: Ironwood on September 30, 2009, 10:31:38 AM
I like .50 cent or more. For me they are really paying for my time and handling.

Ironwood


+1.  I charge a daily rate, which usually equals out to .50 - .70., depending upon the species.  I also charge for handling on loads less than 1000 bd ft.

In the archives is a post that I made several years ago on this very same topic.  I looked at it from not only direct costs, but also depreciation, return on investment, business taxes, repair costs, labor, etc. 

When I made the investment in my kiln, it was in anticipation of the following:

1 - I would have a positive return on that investment, the same as if I had put it in a CD.  Typically I like to see at least a 10 - 15% return, which means that I should generate 2 - 3K annually in ROI from the 20K investment in my kiln.

2 – If my business had to borrow the money to make the investment, then not only should I see a positive return on the investment for my business, I would also need to factor in the payments on the loan.  Using simple arithmetic, if I amortize 20K over 5 years then I'm looking at 4K per year in payments.  So I'm now at 7K per year for investment return and payments.

3 – A kiln is not going to last forever – it is a depreciating asset.  Thus, over a period of say 7 years my 20K investment will disappear.  I need to recover that money, in addition to my return.  Simply put, figure another 3K per year in depreciation.

So now I'm at 10K per year, just for ROI, payments, and depreciation.  If my kiln stays in operation for 50 weeks per year, then I need to generate $200.00 per week, or $28.57 per day, before labor and operating expenses, just to cover principle, interest, depreciation and ROI.

4 - Next, we have labor costs.  It takes two men several hours to stack, sticker, load, baffle and unload a 4000 bd ft kiln.  As a business owner, not only do I need to recover my labor costs, I also need to make a profit on that labor.  So, if I'm paying two guys 15 bucks an hour, by the time that I calculate in overhead, taxes, etc, that 15 bucks an hour is now somewhere around 23.50 per hour each.  If I want to make 30% profit on their labor, it is now 33.57 per hour each, or $67.00 for the pair.  If they are able to load/unload 4000 bd ft in 6 hours, I now 200 bucks in loading/unloading costs, plus 30% profit.

Based upon a 30 day kiln cycle, that's another 6.71 per day, for a total of $35.28 (labor and ROI, payments and depreciation). 

5 - Now, we have operating costs.  It seems like on an annual basis I'm spending around 1K in spare parts, maintenance costs, etc. on the kiln .Another 2.85 per day, taking our total up to 38.13 per day.

6 - Next, we have utility costs.  These are going to vary depending upon several factors, including your utility rate, how well insulated your kiln is, and your average temperatures, just to name a few.  Maybe another 6.60 bucks a day if your bill runs $200.00 per month.  So we're at 44.73 per day. 

7 – If one man spends 30 minutes per day in checking the load, doing the sample boards, etc, then you're looking at another 16.78 bucks a day in labor (1/2 of the estimated 33.57 estimated actual labor cost + profit), taking us to $61.51 per day.

Thus, if I have 4000 bd ft of 4/4 oak wood in my kiln – dried from green - my costs plus a small amount of profit will be 1,843.30 for that load, or .46 per bd ft.

But what if the load is less than 4K bd ft?  My daily operating costs remain pretty much the same, my depreciation, ROI, and daily labor costs are about the same, perhaps I have a small savings on the labor associated with loading and unloading (estimated 50 bucks for 1.5 hours of time savings), but that's about it.  It will still take 30 days in the kiln to dry 3000 bd ft of 4/4 oak from green to 8%. 

So if I subtract 50 bucks from the 1843.30 for the load, I'm at 1793.30, divided by 3000 bd ft., or .59 per bd ft.

If you're drying 100,000 bd ft at a whack, with a kiln that's heated by waste wood, perhaps you can get your costs down low. 

IMO, the reality is that most folks do not charge enough to kiln dry.  I look at many of my fellow Forestry Forum members with nothing but respect for their hard work and desire to be independent businessmen.  They work incredibly hard for not a whole lot of income, and unfortunately too many end up going broke down the road because they did not charge enough for their efforts.  And the rest of us have to compete with that, which only keeps the prices artificially low.



Scott is right on the money.. Kiln drying and sawing ain't charity work. I charge .60-.75/ bf and a minimum charge for handling. If someone has 100 bf they want KD If there is space,I throw it in and charge them 100.00. On an 8 foot x 4 4 foot sled that is 2.5 layers  or around 20 minutes of time hand stacking..

If they have a 14 foot odd pieces the price goes up or I ask to cut the wood in half.
Title: Cost of Drying Lumber Con't
Post by: Charles on November 02, 2009, 12:40:50 PM
 
From my previous post of the cost of Drying Lumber, I said I would get back to you when I had the lumber to dry.
I have 300 bdft of 20% Walnut 5/4. I have installed a Hydro meter for exact hydro reading.

Just for your info I keep track of the RH in the kiln with this wet/dry bulb assly. It hangs in the kiln and I can read through a little window


(https://forestryforum.com/gallery/albums/userpics/12256/2517/IMG_1964_JPGM.jpg)




This is the lumber stacked and the kiln ready to be closed


(https://forestryforum.com/gallery/albums/userpics/12256/2517/IMG_1965_JPGM.jpg)




This the kiln closed up and ready to start. The meter is up on the right hand side



(https://forestryforum.com/gallery/albums/userpics/12256/2517/IMG_1966_JPGM.jpg)

I will be drying to 6%MC  so I will update when the load has dryed and  I know my complete costs

Charlie
Title: Re: Cost of drying lumber
Post by: Den Socling on November 05, 2009, 10:29:31 AM
Charlie,

That is a nice looking hygrometer that you have. Did you build it? It may have one small problem but I'm not sure from the picture. You want the sock to stay wet but you don't want it too close to the reservoir. The water in the reservoir can warm the thermometer and give you a false reading.

Den
Title: Re: Cost of drying lumber
Post by: beenthere on November 05, 2009, 01:07:24 PM
Den
Had the same thought and question. Often there is a small fan blowing across the sock to get evaporation and cooling for the wetbulb reading.  This one looks a little tight.
Title: Re: Cost of drying lumber
Post by: Charles on November 06, 2009, 04:53:13 PM
Well you guys are right it is not working. I changed the water tub this time and it stays stuck at 80 F. I had a smaller tub before and had to add water so I went with a bigger tub. There would be small amount of breeze from the fan blowing over it.
Can you enlighten me with some details as to the amount of wick that should sticking out and maybe the tub is too big. Lie I said before I only dried for myself so I am not really up on the best proceedures.
Any help with this would be appreciated.
Charlie
Title: Re: Cost of drying lumber
Post by: Den Socling on November 07, 2009, 11:21:12 AM
I have been looking at it and trying to figure the easiest fix. More wick should be exposed to the air, that's for sure. It also looks like the wick is too close to the mounting board. In a full size kiln, the wet bulb is either parallel to the wall on mounts which hold it away from the wall or it is perpendicular to the wall for air flow over the wick. What you might do is put some spacers behind the WB thermometer and raise it up and out of the reservoir. When you find the height that the water will wick up the sock, make a mark on the reservoir to record that water level.
Title: Re: Cost of drying lumber
Post by: Charles on November 07, 2009, 11:54:50 PM
Hi Den

I am going to dig up the old platform and tub I used before I made the changes. It worked well but OH NO had to add some water so let's make it better. Do you know of any sites that may give me info on wet bulbs. I may have been a little lucky the first time
thanks
charlie
Title: Re: Cost of drying lumber
Post by: Den Socling on November 09, 2009, 09:33:46 AM
I did a Google search and, of all things, was taken to PC Specialties. But we have only RTD's, wicks and reservoirs for electronic controllers. Searching a little more took me to http://www.partshelf.com/taylor55251.html. This hygrometer looks like it doesn't have too much more of the shoestring wick exposed than your's does. This type of hygrometer is hung on the inlet side of kiln charges by operators who want to check their controllers. It's been a long time since I was inside a conventional kiln and I can't remember how the wick was set up. I'll look through my library. I have read, for example, the air speed over the wick to get an accurate reading. In the meantime, I think you would be fine if you just switched  to a lower dish to expose a little more wick.
Title: Re: Cost of drying lumber
Post by: Den Socling on November 09, 2009, 12:17:50 PM
aha! I found more info on portable hygrometers. It is OK to have the wicks at an angle. Just put another hole in your reservoir and leave two or three inches of wick exposed.
Title: Re: Cost of drying lumber
Post by: Charles on November 09, 2009, 08:21:50 PM
If you can find something it would be helpfull. The info I was trying to find was how much air should pass over the wick, and like you said the amount of wick exposed but it seems a little hard to find.
I am going to go back to the first setup, it seemed to work.

The lumber should be done in a day or two and I'll have some costs then.

Charlie
Title: Re: Cost of drying lumber
Post by: Den Socling on November 10, 2009, 10:39:29 AM
In laboratory conditions, a WB would have 600 feet per minute blowing over it. In a conventional kiln, you see closer to 350 feet/min. White wood should have more air. Wood that is nearly dry isn't giving up much water and can get away with less air and save a little money.
Title: Re: Cost of drying lumber
Post by: Charles on November 10, 2009, 10:14:17 PM
I shut the power off to the kiln to-nite and took my readings. I have used 271 KW of elec. My cost per KW with everything added in including taxes is 13.8 cents a KW. Total cost to me to run the kiln for hydro is $37.38. I had told the customer it would be about .50 cents a bft. or maybe more depending on the hydro.  300 bft makes me $150 less $38 which is $112 for 16 days., that's $7 a day profit, not much but it was a small load. I think if I was to do this for other people on a regular basis I would have to charge more. As far as I know I am the only person in this area who can dry 300 bft or less. I think I could charge more because like this customer this tree was special because her great Grandfather planted it. When it came down she is having some end tables made for her Grandchildren. By the time the sawing and drying and transport costs are totaled it will be very expensive but this I suppose is what they want.
Thoughts anybody

Charlie
Title: Re: Cost of drying lumber
Post by: customsawyer on November 18, 2009, 04:17:56 AM
I don't have much to add except that a company can charge as much as there market will stand. If they can charge a certain amont stay busy and make a profit then they have a good bus. if they can not then there must be a change in raising price or lowering cost.
This has been a very good read in that there are great answers from both sides of the fence and in there bus. they are both right. The neat thing about this is there is no set rules other than the laws of nature. If it works for you do it.
Title: Re: Cost of drying lumber
Post by: Jim Spencer on November 19, 2009, 08:37:32 PM
Charles,
If you are drying in the winter with a dehumidifier the cost will be much higher than in warm weather.
I use an ebac dehumidifier and refuse to dry any lumber after Oct. 1st because cold wood will freeze up coils and cost too much for electric heat in the kiln to allow dehumidifier to operate efficiently.
Just my opinion,
Jim
Title: Re: Cost of drying lumber
Post by: solidwoods on November 20, 2009, 08:49:31 AM
Quote from: Charles on November 07, 2009, 11:54:50 PM
Hi Den

I am going to dig up the old platform and tub I used before I made the changes. It worked well but OH NO had to add some water so let's make it better. Do you know of any sites that may give me info on wet bulbs. I may have been a little lucky the first time
thanks
charlie

I used to use 2 glass thermometers with one having a cotton shoe string for the wick in water.

Where to put it.
I like at half the load height and between the fans (if you have more than 1).
Also the glass thermometer type are so cheap, put a few of them in different places (you'll be surprised at the different readings, especially between up high and down on the floor)

And thanks for the cost info.
I feel lucky our electric is $.08kw in Tennessee.
I use a wood fired hotwater system though so I only have fan electric to cover.
jim
Title: Re: Cost of drying lumber
Post by: Den Socling on November 20, 2009, 09:01:15 AM
Jim is right about different readings from different locations. Naturally, the bigger the kiln, the more the variation. Also, if you have fans that reverse, you take readings from the inlet side only, if possible. The wet bulb is adiabatic but drafts around doors, vents, etc. will affect the reading. The dry bulb is always read on the inlet side.
Title: Re: Cost of drying lumber
Post by: red oaks lumber on November 20, 2009, 07:43:17 PM
jim spencer,
if your kiln is working right your coils should not freeze up in the cold weather. what temp  is your kiln  when the compressor comes on ? should be 80 deg. i dry wood all winter(northern wisconsin) and never had my coils freeze up
Title: Re: Cost of drying lumber
Post by: Ironwood on November 21, 2009, 07:24:07 AM
I have not had ANY issues drying in winter w/ my Ebac.  ???

Ironwood
Title: Re: Cost of drying lumber
Post by: red on June 12, 2022, 03:54:20 PM
Some very good info here on the cost of drying lumber
Title: Re: Cost of drying lumber
Post by: KenMac on June 12, 2022, 07:56:45 PM
I think that the costs have greatly increased since this post started. I charge $1 a board foot in my Nyle L200. Generally it is green straight off mill and is hardwood.