You've got to pay to play.

[customsawyer]

Been getting pine and cypress logs in here the last few weeks. The pine wasn't to bad but I could have bought a good 4x4 tractor with what I had to pay for the cypress. However I can't sell cypress timbers if I don't have any logs so it is what it is.

This is 6 semi loads of cypress and 1 load of pine out front.




Here is a couple of pictures of some of the pine that has came in and had another two loads come in yesterday that isn't in these pictures.








If anyone is not busy at this time it is by choice if you ask me.

[SwampDonkey]

Nice looking stuff, should slice up some fine lumber. ;D

[Andries]

That's a whole whack of logs Jake.
I'm curious about the cypress, how does it saw? Is it similar to cedar, and what do cypress Timbers get used for?

[barbender]

It doesn't take much to have a lot of $$$ tied up in log inventory. Even my modest little spread probably has around $10K in sawlogs and firewood logs on site.

[customsawyer]

Andries I don't know of anything easier to saw than cypress as long as it has moisture in it. I've often said that I thought I could cut it with a blade on  backwards. Well one day I had my hired help put the blade on and it happened to be on backwards. Well it still made the cut however it sure didn't sound right. Now if the outer shell starts to dry then it can be a challenge as you will be sawing through both outer sides that are dry while sawing the moist part in the middle. While I have never done it I compare it to sawing half frozen logs. (I put that in there so you can relate)
Cypress timbers are used for lots of things. I've cut entire timber frame homes to just a few post on the porch. The old growth cypress seem to have more natural oils and was rot resistant so it became famous for that. I personally don't think the newer cypress holds up as well as the sure enough old growth stuff. One of the good things about cypress is it seems to have less shrinkage than say our SYP, which is beneficial in the timber frame homes.   

[Andries]

Thank you sir, great information. 
With that amount of inventory, it's good to see that you've also invested in "Chief", head log-dog and on guard for you and your biz.
🐕

[Bruno of NH]

I'm doing the same spending lots on logs with lots of orders still to fill.
I take them when I can get them.

[B.C.C. Lapp]

It doesn't take much to have a lot of $$$ tied up in log inventory. Even my modest little spread probably has around $10K in sawlogs and firewood logs on site.

Yup, I hear ya. Between timber I bought that's still standing, timber I turned into logs that are on the landing right now, fire wood poles I bought and timber and polls I have bids on, well, it ain't for the faint of heart I can tell you.

[WDH]

The old growth cypress seem to have more natural oils and was rot resistant so it became famous for that. I personally don't think the newer cypress holds up as well as the sure enough old growth stuff.

That old cypress was called tidewater red.  It was old growth with lots of heartwood.  Sap cypress, that is younger cypress with just sapwood, is not rot resistant like the old stuff. 

[YellowHammer]

You can't saw logs if you don't have logs to saw.  I wish I could get cypress logs here.  

I had some guy and his buddy come in yesterday wanting to "start a business like mine" which for future reference, isn't a real good way to start a conversation with me, and he asked about my log yard and and how much I have invested in it because he'd heard he could get all the logs he needed for free.  I just laughed.  Sure, yeah, right.  

So I said kind of curtly, "My logs cost more than the vehicles you and your family own" and he said "No way, you don't know what we have" and I said, "It doesn't matter, it ain't close."  :D :D :D

[customsawyer]

There's a old saying along the line of "if I have to explain it, you won't understand."
I know I'm a small operation but it still blows my mind how much I have tied up in inventory. When you add up logs, green lumber, dried lumber, and planed lumber it gets to a sizable chunk. The other scary thing is how fast the inventory turns over. So you had better be lining up some more.

[Crossroads]

I don't have much inventory for logs, as most of my business is mobile milling at this time. With that being said I have a load of Doug fir, about 2 loads of P Pind, a few red cedar logs and a few black walnut. I have 2 loads of blued pine on order which will set me up pretty well for this year and next spring. I do need more cedar and am working on that. The last quote I got was 1800/1000. So, I'm searching other options. I have to be careful about getting to deep in inventory with all the new mills in the area willing to sell for less. I'll keep at the mobile thing while slowly growing my client list for custom milling. 

[longtime lurker]

I had some guy and his buddy come in yesterday wanting to "start a business like mine" which for future reference, isn't a real good way to start a conversation with me, and he asked about my log yard and and how much I have invested in it...

Name the man a number lock, stock and barrel.
And then throw him what the no compete clause  (or managers salary if you wanna stay on as a technical advisor for a bit) for  a couple years is going to cost him.
You did say your kids aren't interested in it, and commodity cycle wise the time is now.
Guy might have a couple Lamborghinis, never can tell 😂

[longtime lurker]

Old guy I knew once told me that the only time he made real money from sawmilling was when he retired: stopped buying logs, stopped running up bills sawing, sold out all his stock, sold up the equipment.

I keep telling myself that one day it'll all smooth out... I'll have enough cash in the system that I won't have budgetary stress when something goes pear shaped, that log inventory will stabilise with regular inflow that matches outflow instead of the boom and bust way I intake logs now, that I'll have enough sawn stock that I don't have to pull double shifts and weekends to meet delivery deadlines. I'd like that, something more predictable and less stressful then how I currently operate. I recognise that it's the stress not the hard work that is killing me, but I also know that the financial resilience I need to smooth it all out won't come from sitting back and not sticking my neck out.

Then I realise that if it was easy everyone else could do it. I love what I do and I'm good at it, and these things are the price we pay for ambition. I could always turn it off and get a real job, but that wouldn't make me happy at all.

Pay to play seems about right  :D

[wkf94025]

I've been watching a steady stream of haul trucks loaded with redwood rumble past my property, on and off the past 2 years since the fire in Santa Cruz County.  Lately, whoever they're harvesting inland of me, the logs have been much bigger in diameter than most of the new growth stuff that doesn't interest me much.  Like 3 beasts per truck instead of 12 sticks.  Lately, it's tempting to hail down one of the drivers, work upstream to the land owner or tree removal contractor, and offer on a few of these 40' x 36"+ beasts.  We still have ~15 redwood logs in my queue, half a dozen large cedar, and some coastal live oak, white oak, red oak, claro walnut, and eucalyptus sideroxylon.  Where am I supposed to find the time to mill all this?  (This is NOT my day job.) Yet a big ol redwood log just gives me a stiffie.  My main sled driver tells me to look the other way when these trucks rumble by lately.  He and his crew do most of the hard work.  All in, between logs, slabs, AD dimensional, and KD dimensional, and some gorgeous T&G 1x8 redwood siding, I've probably got $30k outlaid, and none of it revenue yet.  I haven't paid a lot per MBF, maybe $600 for the redwood and $400 for the cedar.  Everything else free from small scale urban salvage.  Having too much fun with learning all that I've learned the past year plus about sawing, drying, slabbing, shaping to get around to the marketing of some inventory.  I think it'll fly out the door when I get around to it, but what do I know.  

[SwampDonkey]

Goes without saying, but sounds a lot like the white cedar up here. The old stuff, with rings like a finger nail, 160 rings from pith to bark with 6" diameter, growing in the lowlands is a heck of a lot more resilient than one growing fast at the edge of a pasture field with 30 rings. ;D

[customsawyer]

LL how much you make off of a sawmill has a lot to do with who you are selling to. I remember the days where the profit margin was just a few cents per BF so you have to pound out the volume. When I cut for the big mill most of the prices are set by the Hardwood Market report. In pine a lot of the prices tend to follow the futures market that folks are talking about. Here at my mill I don't have the desire or the volume to play in those games. My prices are set by ME. One of the reasons I work for myself is that I don't like someone else telling me what I'm worth. One of the quickest ways to get under my skin is to start haggling on my price. I will counter offer with more than the original price. I know lots of the old timers enjoy the art of negotiating on a price but they don't do it at Home Depot or Lowes so I'm not going to do it here. The trade off to who you sell to is you have to deal with folks that aren't familiar with the lingo. This can make the blood pressure go up sometimes but it also raises the checking account.

[Hackeldam Wood Products]

exactly why the bottom has to fall out of this crazy demand for sawmills. I do it as a hobby. To actually make a living you have to invest a whole lot of very hard work and a big basket of $$$.

All the questions about how much should I charge,etc show that not much thought or research went into going into milling for a profit to start with.

I was in the automotive business for the first twenty years of my working life. The one thing I look back on is I didn't fully grasp Return On Investment. I should have just invested part of the $$$ that I spent on equipment back then.

You have to make a nice profit on that inventory and investment in equipment.or you would be better off owning stocks instead of logs.

The comment above about only making $$$ when he sold out has a lot of truth in it. If everything you own isn't worn out obsolete junk by then. 

If you notice all the successful sawmills  are smart businessmen first and very hard workers second. The art of sawing lumber is probably third and equal to being a decent mechanic.

As interest rates rise lumber demand and prices will adjust downward. Don't get caught holding too much overpriced logs or lumber inventory.

[Peter Drouin]

As interest rates rise lumber demand and prices will adjust downward. Don't get caught holding too much overpriced logs or lumber inventory.

Just what I was thinking.
I have a lot of logs to go to be out of them.
Love winter cut logs, they last and last

[YellowHammer]

I personally haven't found any investment that gives me the very high rate of return I get from sawing, selling, and drying wood.  That includes gold and land.  However, it takes money to make money.

Especially, these days, when the market has moved to customers saying "I can't find it anywhere, do you have it?"  I am getting a surprising number of even wholesalers setting up purchase accounts with us, because I have it in stock and lots of other companies, ones that they used to do business with, are just giving up and saying "Nope, ain't got it, can't get, sorry."  If I get the same request from several customers, for a few week, guess what...I make some, then start selling it as new product stream.  That's the big advantage of a sawmill.  I can make it, they can't.  

I say, "sure, when do you want to pick it up?"  

For example, a few months ago, I got a call from Woodcraft, yes the Woodcraft that many people get their catalogs in the mail, that Woodcraft, asking me to be a supplier for them.  To quote the guy on the phone "your wood is better, less expensive than ours, and you have it in stock."  Yep, that's they key today.  High quality and in stock.  Not overstock, because as folks are saying, I don't want to get left holding the bag with too much inventory, but I can't sell it if I don't have it.

However, the lumber must be the lumber that the customer wants to buy, not what I want to sell.  

I have to have logs to saw, lumber in stock to sell, and we have about 45 different species, some of which I don't saw simply because I can't get the logs.  However, I can get the lumber, and have some shipped in from all over the country.  I have to pay to play.  

[Old Greenhorn]

Well inventory costs money and is an investment that should not go long term. But if your inventory doesn't cost you anything, the cost is only storage space. I shot the video below back in the winter. All these logs were a by product of the logging and arborist side of the business. Some comes off the job and gets resold right away when the market is right, others sit for a little waiting for prices, still others get milled to fill orders. Small stuff turns into firewood, softwoods to the OWB and hardwood for sale. The video doesn't show but two thirds of what we have on hand as there are other outlying piles of specific species kept separate.
 The video is a bit long and not entirely on logs, just skip thru as you like.

Job Security, The log pile - YouTube

[longtime lurker]

I hear ya Jake. Who you sell to, what you sell, how and when you sell... but that's the easy part in the current market. Well except for my bad habit of saying we can do the impossible by next week when I'm already running at capacity, but I've learnt to take it while its there and turn the lights on at night because there are no guarantees about next week in this business. My issue is really just lack of cash reserve - I cut it pretty fine at times and it causes me some sleepless nights if I get a couple late payers - because I'm still running this show on an overdraft that looks like a bar tab. 

When I started this thing up 12 or so years ago I was fresh off a divorce, near destitute, and a single parent to two little girls. I had a little old D31E dozer that was all that was left of the earthmoving business once ex and the lawyers and bankers were settled up, couple tired old chainsaws, some big mill experience, a strong back and half a brain... and I went and got a Lucas Mill to turn some byproduct of dozer into beer. About year 3 I cracked $100k annual turnover with the mill: I've got that much in logs landing here in July albeit it'll take a few months to saw them up.

YH is right - it's still one of the best ROI businesses I know when it's all running right, that and sweat is why I've got from A to B. But I got here the hard way and know from experience that it doesn't always run right... while the future looks bright the ground underfoot still isn't rock solid and I see a crash looming. S'okay... I own those logs not the bankers, and I mostly own the gear, and if July's log bill is scary there's enough orders going through to cover it, and I can always drop sawn stock into the wholesale market if I have to. I might have to, I need another kiln and I can't buy bulk logs and drop a deposit on one of them at the same time.

I'm still paying to play, will be for another 4 -5 years I reckon. And that's okay because I know the rules and I'm good at this game. Still... everything I've got is tied up in logs or boards or gear to turn logs into boards, and if the seat of my trousers doesn't have holes well they're getting pretty thin. Just need some guy to pay me on time to attend to that problem too :D

[YellowHammer]

I'm still paying to play, will be for another 4 -5 years I reckon. And that's okay because I know the rules and I'm good at this game.

OK, now THAT is a quote worth repeating and remembering!  And it applies to a lot more than sawmilling.

[customsawyer]

Most of us are in the same pot. Just some of us have been on simmer a little longer so are more well done.
The biggest thing to being able to name your price is having enough put back that it doesn't matter if that particular customer doesn't buy your product, because you know another will call in the next few days or weeks and you can make it that long.
I gave a rough idea of what I paid for the cypress. Most would be scared to death to lay out those kind of funds on a perishable item. For the record logs are perishable. In my situation I'm willing to put those funds out there for cypress because the customers that can afford most of it are recession proof. I promise it won't spoil. I pass my extra cost on to the customers, figure in a good profit margin for me and sit on it until it sells at my price. This keeps myself, the hired help and the equipment making  a strong ROI. If cypress isn't selling then I figure out what is and sell that until the cypress market phone rings.
I'm to old and fat to chase after 2 or 3 cents profit on high production low profit material. I get at least 2 calls a day wanting me to cut pallet lumber. I tell them sure and give my rate. I have heard lots of coughs, a few snorts and some cuss words on the other end of the line. They ask if I think they are crazy. I say nope but neither am I. I refuse to buy hardwood logs at 500/M, sell the higher grade at a 1000/M and then sell the pallet or tie material at 350/M. All just to pray that my margins work out at the end of the week. I would rather saw 1000 bf and make $1000.00 profit than to saw 10,000 bf to make $1000.00 profit. I know the 10,000 bf customers are more consistent in that they have to buy every week, so there is a place for them with the big mills that hammer out the footage but I refuse to wear out myself and my equipment if there is a better way.
I very well could fall flat on my face next week, from a business stand point, but I'm willing to take that risk.
Keep in mind that I'm not trying to take advantage of customers and just put whatever number I feel like on certain products. I keep tight records of all of my cost and then figure in a fair profit margin. If they aren't willing to pay that price they go get it down the road. Majority of the time where they are getting it from will be out of business in less than a year. That same mill  probably called me to get ideas when they first bought their mill.
 

[thecfarm]

Bottom line, you gotta make money!!!