With dropping lumber prices, when will demand for sawmills follow?

[WV Sawmiller]

Robert,

  When you buy from these various exotic lumber suppliers, do you have an estimate of what percentage is ready for resale based on your higher standards? Any idea what percent you have to "rework" before you will sell it? I assume you have to plane or re-plane and trim to acceptable quality and I was wondering how much loss you encounter in the process. Thanks.

[richhiway]

It is funny how my tiny operation follows the world wide trends. For the past several years I can't give away red oak or cherry or any thing else red or even called red something.     The fad chasers only know white oak and black walnut.

I read an article a while ago. Setting trends is now a business and a fad or style can go world wide in a day on social media.
One example is coffee shops are all brick/wood/industrial.
go figure. 

[YellowHammer]

WV Sawmiller

You hit the nail right on the head as one reason I like selling exotics.  The short answer is exotic wood from a quality supplier will be 100% usable, zero defect, perfect.  There is no NHLA grader pushing out 86% FAS and there is nobody sending me 30% of boards 7 feet long when I order a pack of 8 footers.  

However, bad exotics dealers just like bad domestic wood suppliers will sell marginal grades, and since exotics don't follow NHLA grade rules, it can come in any width, length, and grade, no matter what the company says it is.  That's how to get ripped off, they send a pack or garbage, and once I get it, I own it.  I can't send it back.  Been there, done that.    

However, a good exotic dealer will sell only one grade of wood, and it's got a grade of "perfect" as hard as that is to believe.  Some very small percentage will have a few end splits, but otherwise no knots at all.  So when I buy exotics from a reliable dealer, it comes it with the grade of "WCL" as in Wide, Clear, and Long.  I should have taken a picture of the wood we got in earlier this week.  Mahogany 12" to 18" wide, zero knots, zero wane, 8 feet long and glows in the sun, zebra wood a little narrower, but perfect, sapele 16 feet long.  Perfect.  Some companies will send it rough sawn, some will send it skip planed.  It's actually rare to have a board that has a defect.

As an interesting side note, yesterday morning I ran out of FAS red oak, I have several thousand bdft air drying, but sold the last KD I had.  So I called up my main supplier, the second largest hardwood dealer in the Southern US, and asked for FAS 4/4 KD red oak, 8 feet long.  That should have been just about the most common and easy order for them to fill.  Their answer was "Sold out, but we do have some 12 footers, but that's it."  However they are getting a railcar of it in next week supposedly, so I am on the list to get some.  The point is that at least for this week, the second largest hardwood lumber dealer and distributer in the South was sold out of 8 foot long, 4/4 FAS red oak.  I didn't even get to ask the price, I guess I will find out next week if they get some in.

[customsawyer]

Sounds like another time the HWM report might be off a bit.

[Cedarman]

Working on an order of 13,500 ' of #2 cedar.  Not a very good grade.
Customer is slicing and dicing into 1" x 1" x 3" pieces.  Yield will be great for that kind of work.
Price is right for them too.  And I am getting rid of a lot of lumber we usually grind into sawdust particles.
So glad I don't have to come up with a lot of clear wood.!!
But making the customer happy is the name of the game.
They set the specs and we get to set the price.
A lot more fun than commodity sawing.

[Crossroads]

I got bit yesterday, a customer asked for a price on 500-1x6x6' Doug fir. I gave him the price and he sent me a picture of an add for a fence company who is having a winter liquidation sale on western red cedar 5/8" & 3/4". I reworked my quote to the same dimensions and I'm .09/bdft cheaper though it's still apples and oranges with 2 different species. Had he asked for a price on cedar, I would have been.01 higher. 

[SawyerTed]

Returning to the speculation going on on new mills.  After reviewing some of the sawmill related auction sites, I'm seeing a number of mills listed as brand new.  

If that's the case, and they sell at more than new prices, there's a lot of money being made by sellers and auction houses on new mills.  

[btulloh]

Ad just came up on fb mp for a new, unassembled LT10 for 5k. Is the lt10 still part of the product line?  Pictures posted and it is indeed new and still in pieces. 

[beenthere]

How long has the LT10 been sitting there unassembled ?  Maybe "new old stock" (NOS). 

[btulloh]

Must be.  I don't know what the asking price represents- low, high, above original price?  

Not something I'm interested in.

My next mill will be full hydraulic. Just waiting things out for a while and see what the trend might be.

[beenthere]

 there's a lot of money being made by sellers and auction houses on new mills. 

And likely that is speculation too.  :D  ;)

[stavebuyer]

The standard NHLA lumber grades were designed to allow full utilization of the resource into basic grades that met the majority of user needs. Nothing wrong with the grades, the issue is greed. I really don't know what someone expects to build out 16' 18" clear boards and do no slicing and dicing. Most likely they will still have lots of short scrap that they paid mega bucks for when they are finished and don't realize that they probably could have bought mill run FAS at 1/2 the cost and got all the long and clear they actually needed. 

The problem with buying FAS from a shop that also caters to the "super ultra special snob market" is that all the full length, full width zero defect stuff was already sold. Small mills that don't have the volume to do those infinite sorts will be a much better source especially if both the mill and the logger are held to a "woods run" and "mill run" standards without cherry picking all the premium stuff out of it.

As far as HMR market reports there is always a lag between what's reported and reality both in good times and bad. If you see mostly bold "+" then premiums are being paid above what is quoted and the same holds true when the market is in decline. In a softening market you will have to discount a good bit from HMR to make a sale.

There also come a point(like now) that Red Oak is below the cost to produce it. The big mills that sort for color and width also tend to have deep pockets and won't offer lumber at less than replacement cost. Wholesalers are only interested in carrying inventory when prices are increasing. Green, Red Oak is plenty available at bargain pricing, but nobody wants to touch it without a firm order in hand.

[SawyerTed]

beenthere, yes!  An auction is speculation of sorts by everyone.  This is especially true with no reserves and 13% buyer's premium.  

[Walnut Beast]

Talked to the salesman at CAT on smaller equipment side and he said he had two calls all of September when he usually has five a day. Many guys are not buying until they see what happens in November even the guys that need to buy before the end of the year. He also said and he said he can't blame them. Many guys are selling their own machines instead of paying them to do it. New machine wait time isn't as long and the used side selling that was crazy for him last year has cooled off

[YellowHammer]

from a shop that also caters to the "super ultra special snob market" is

All I need to do is find a small percentage of the "Super Ultra Special Snob Market" out of the 2.2 million people living within a 50 mile radius of me, who are rightfully tired of spending big money at Lowes, Home Depot, Rockler, Woodcraft and the other local retail outlets mills to keep me selling all I can get and make.  Oddly enough, I just call them "Customers."

Returning to the speculation going on on new mills. 

I agree, I think it best to return this topic to sawmills and machines.  Everybody has their own lumber market, so enough about mine.

[Walnut Beast]

Had a Quote on a CAT excavator with a cat branded FAE head, hydraulic tilt and bucket and debris package exactly one year ago in October. That same quote today is over 37,000 more for exactly the same package minus the debris package. So basically 40,000+ higher than exactly one year ago on a package under 200k

[tacks Y]

Brightstar auction just sold a 2021 LT35 with 13hrs for 22k + commission I think. An LT40 with 300 hrs and a gas engine for hydraulics brought 21k +.

Seems like they are cooling off?

[bigblockyeti]

I hope so, I want an LT40 (or 50) and would rather not have to wait half of forever or pay through the nose to have one quickly.  I'm liking that % off new for the 13hr LT35, seems far more reasonable.

[Southside]

Just for giggles I just priced a 35.  OMG, set up the same as mine it's almost triple what I bought mine for in 2014 with 800 hours.  

[customsawyer]

I'm not shocked at all. I know what I'm having to pay for other things right now. I wouldn't expect WM to be getting any hired help, insurance, materials, especially steel and wiring for any where close to what they were paying 8 years ago. I had to pay 425 bucks for a couple of short hyd. lines the other day. Grocery store had a quart of Hellmans mayo for 10 bucks. The price of nothing surprises me anymore.

[Stephen1]

Brightstar auction just sold a 2021 LT35 with 13hrs for 22k + commission I think. An LT40 with 300 hrs and a gas engine for hydraulics brought 21k +.

Seems like they are cooling off?

Maybe, but look at what it is, lt40, with a gas engine for hydraulics, so not factory but a DIY modification . 

[rjwoelk]

I got a quote on a hydr 35. 46000 did not have the debarker. 

[barbender]

OMG Southside is writing like a teenage girl texting😂

[SwampDonkey]

7/16" OSB is $12.50 a sheet, national average , but locally they want $23. And it is made here in NB by Arbec. Lumber is $750/th for 2 x 4" x 8' or about $4 nationally, but $5.48 locally.

[Southside]

I was like totally blown away! Gag me with a spoon Barbender.  :D