Cross Ties with logs off property you own

soontobelogger · March 21, 2016, 10:55:42 AM

I am looking at purchasing property and would like to mill my own lumber. I do have an outlet for walnut, maple and cherry that I will use in my present business.

If I wanted to get more into the sawmilling side of things, are there any issues with cutting ties with logs from property that you own? I am still learning and trying to soak up all the information I can from this great site.

Chuck White · March 21, 2016, 11:06:01 AM

Welcome to the Forestry Forum, soontobelogger!

Where are you located?

soontobelogger · March 21, 2016, 11:36:00 AM

The properties I am looking at are located in Southwest to South Central Kentucky.

Ron Wenrich · March 21, 2016, 12:12:03 PM

Talk to your accountant about tax problems. If you buy a property, you should get a timber inventory and appraisal. You will be paying for you stumpage when you buy the land. You should be able to use that stumpage value as a deduction from the value of the lumber, ties, etc that you sell and save you money on taxes.

Seavee · March 21, 2016, 01:59:54 PM

Welcome to the forum soontobelogger

Magicman · March 21, 2016, 09:03:10 PM

Welcome to the Forestry Forum, soontobelogger.

Banjo picker · March 22, 2016, 11:42:08 AM

Welcome to the forum. And Ron just gave a valuable piece of information that a lot of people dont take advantage off. Looks like the tie market might be tighten up a bit. Banjo

soontobelogger · March 22, 2016, 12:03:59 PM

Thanks for the welcome and advice so far.

Having run the numbers, it seems like it would be profitable but it also it seems like I am missing something.

If I can cut 75 ties per week, even at $20 per tie(haven't called for the current going rate), that's $1500 a week, plus whatever I could scrounge from the side boards. I would figure on milling 3 12 hour days and then logging the other two if needed. Plus the weekend for weather delays or rest. Thoughts?

It also looks like gas prices and oil are starting to creep back up, so I would think that would eventually be good for the tie market?

dboyt · March 23, 2016, 10:01:56 AM

75 ties a week is 15 per day. If you log one day, then cut the next, that's 30 ties in a day, or about 15 minutes per tie (8 hr day). So, one day you'll need to average 4 logs per hour, and cut at the same rate the next day. Trust me, with everything that happens around the sawmill, it takes 12 hours to cut for 8 hours. What is your logging experience? Do you have the equipment for cutting and hauling the logs? What about handling 300-pound ties? Do you have to haul the logs to a collection yard? That would require a truck and kill several hours for each load. When you're logging, your sawmill is idle. When you're milling, your logging equipment is idle. When you're delivering ties, everything is shut down. "Whatever I can scrounge from side boards" sounds like an afterthought, but it may make the difference between staying in business and looking for a steady job. Get that part nailed down a little tighter. How are your finances? If you plan to get a loan for the equipment and need to start making money from day one, your chances of success are slim to none. Logging is brutal work, and milling is hard. A business plan based on 12 hour days will fall apart pretty quickly!

soontobelogger · March 23, 2016, 02:21:07 PM

Personally I would rather work more hours on fewer days. I could just as easily work 4 9 hour days instead. Just my preference. Equipment for cutting, hauling and material handling at the sawmill is the easy part.

The mill would be on the site that is being logged. So logs would go from stump to mill area.

The way I see it, I could either get 30 cents on the dollar for the timber and pay a logger, a truck driver and let the mill deal with the hassle. Or I could do it all in house, with equipment I own and get closer to my full dollar value of the timber.

I would envision some sort of resaw for the slabs. Still researching that area. Then I could get a kiln or sell green. Again thinking value added. I would like the ties to be the stand alone part of the business, which is why I did not include any income from the side boards into the calculation.

The questions are good at probing the situation and really get me thinking through the process more completely.

sandsawmill14 · March 23, 2016, 05:50:53 PM

the part you are missing is the labor. for years and years its been 1/3 for the logger 1/3 for the mill and a 1/3 for the landowner if you are doing it all you are still only getting a 1/3 for the standing timber you are just earning the other 2/3 by doing all the work

i did what your talking about for about 2 years both with my own timber and for other people and i can tell you that you will run out of timber pretty quick even on 100 acres it wont last long when it is all you do 5 days a week but good luck with what you decide

Ron Wenrich · March 23, 2016, 05:52:29 PM

Sure seems to be a lot of variables in your plan. First off, are you looking to make a living at it? 12 hr days sounds like full time work. Second, how many acres of timber do you have? If you're looking at sustainable forestry, you would cut your annual growth. That's a couple hundred bf/acre per yr. At 75 ties per week, you'll chew through 15 acres of growth in a week, not counting side cuts. If you're looking at thinning, that's about an acre per week. But, after the thinning, you have to leave the residual to grow.

That means you're either going to have to have a pretty big holding of land for timber, or you're going to have to buy in logs or standing timber. Now you're in competition with the big boys. They move lots of material quickly to keep their mfg costs low.

The other variables are your side lumber, what you do with better logs, and how well you market your material. Low grade material is often better sent for pallet stock.