How do I find wholesale hardwood lumber buyers in my area (MN)?

[barbender]

As I've mentioned before, we have poor markets for hardwood in northern MN, I put a lot of nice saw logs in the pallet log piles because that's the only practical market a lot of times. Now, I could buy those and mill them myself, if I could get rid of the lumber quickly. I see others on here, in other areas (4x4 and Paul Case come to mind) selling wholesale loads, and I'd like to look into that. I don't know where to start and web searches don't turn up anything. The only thing I can think of is asking some of the other little mills where they sell theirs, but I feel a bit awkward like I'd be trying to dig in their wallet you know? Any suggestions?

[Larry]

I bet your state maintains some sort of directory with wood buyers and manufactures.

Years ago there was a company called Thomas Register that maintained a directory of almost all business.  Its morphed into something called Thomasnet.com.  I don't know how to operate it but with a very quick search on the website I pulled up a bunch of potential lumber buyers.

There are other companies that do similar.

[4x4American]

I looked and looked and looked some more..read the ads in hardwood market report, northern logger, american lumber and pallet, etc.  Google searches, talking with loggers (loggers know where the big mills are, and then try to sell to them, and if they say no, don't hang up, ask if they know where you can send your lumber). Most of the big boys seem to take all they can get.  Up and down the coast there is alot of lumber moving.  I'm not sure of what its like in Mn...but I do see stuff going on in Wisconsin.  Keep digging ole boy

[4x4American]

Look for places like this here, http://www.nhlci.com/  call them up and ask for someone in lumber procurement.  If they don't buy any lumber say hey you know where I can send it huh?  And do that again and again.  I have pages and pages of numbers I've called.  And I still make calls every so often, just to make sure, or if I want to piggyback something.

[4x4American]

thomasnet.com had some decent leads for me

[barbender]

What I've ran into, is that the hardwood world seems to end in Wisconsin and Michigan- it's a completely different scene than MN. There's lots of mills and a "hardwood economy" over there, when I look in the logging trade papers and such there is all kinds of activity over there.  Several years ago, I attended a workshop put on by the U of M extension office, on marjeting for small scale producers. I thought I would get all the answers I needed there- wrong! I think they were seeking answers from the attendees more than anything. One DNR guy had been over to Wisconsin and toured a hardwood lumber concentration yard, it was some sort of co-operative for small mills to be able to pool enough wood together to move it wholesale. He confirmed MN had no such thing Even the late Jack Rajala showed up (who I've spoken of elsewhere) his family had several hardwood mills years back, and added to the concensus there- there was nowhere to send hardwood for the small producer in northern MN👎 I'll have to dig harder and deeper, I just don't know how deep I want to get😁 4x4, I think I give up too easy- I need some of your tenacity ;) Thanks for all the suggestions, guys!

[Clark]

I think with enough fire in your belly and deep enough pockets, a guy could make money on hardwoods in MN. The obvious point is that there is no competition so log prices would be slightly over pallet grade. The other obvious point that you are wisely trying to figure out is how to sell the stuff. I wonder if a place like Aitkin Hardwoods or Renneberg would buy lumber from a small operation? That might be the place to start.

Clark

[carykong]

Most of the grade logs in Virginia,my state, go overseas before sawing. I help on a part time basis to write shipping contracts for hardwood, mostly white oak and poplar.  There is an overseas market for grade lumber but our local sawmills are not keen on sorting the grade lumber out of the pallet grade logs.  The price difference in a grade log and grade lumber is just not great enough to motivate mills to get back into grading hardwood lumber for export.  If the sawmill is vertically organized to grade lumber for flooring,for example, or whiskey staves, the model is there,however. I believe the wholesale market for grade hardwood beit logs or boards for small to medium bandsaw mills would be very challanging. Developing a local retail market for your hardwood is an option.  Surely a challange but relieves you of the massive production that goes with wholesale hardwood marketing.

[Ron Wenrich]

What species of hardwoods do you have access to?  The reason there isn't any hardwood wholesalers in your area is that there just isn't enough supply.  That doesn't mean that you can't ship outside your area, given enough volume.  If you're looking at grade aspen, there isn't a very good market above pallet.  If you're looking at grade white oak, you have a better market.

I sawed lumber that was shipped from PA to IN.  The reason was that I sawed to specs and those in IN didn't.  The specs were for 8/4 red oak, F1F and btr.  What they were getting was too high of a volume of 1 and 2 Com mixed in.  Not only did I get the sawing contract, they started to ship us logs on the back haul.  Eventually, they just came to the mill and graded it and sent it export. 

Some of our other markets included big mills.  They had the kilns and markets, we had the supply.  Their grade was fair and their prices were good.  We also found cut up plants that made panels for the furniture and cabinet markets.  Grade and price was very good.  We also had a niche market in casket lumber.  They could use a lower quality and we could get rid of sound back Selects at almost F1F prices.  It doesn't sound like much, but we could get rid of 1 and 2 Com lumber to that market.

The thing is, you have to be able to saw for the market.  You may have to separate grades for various markets.  We did, and we also cut different thicknesses.  Our big city markets only wanted F1F and btr.  If you don't know how to grade hardwood lumber, take a short course or find someone to teach you.  We also sold in trailerload lots.  If you are wanting to sell smaller lots, you will find fewer buyers.  We could sell mixed loads, but needed a minimum of 1 Mbf/species, and no more than 3 species per load. 

[Gearbox]

As I see it our hardwood has trouble making grade due to frost cracks . There are a few verneer buyers around for premum logs but they seem to be few . The second question would be what to do with all the low grade lumber . Frechie millwork in Rice makes molding I have hauled Oak out of TN to them . They buy air dried lumber .

[Clark]

I think there is a problem with defects on the poorer sites and those sites with poor hardwood management. When you combine a good site with good management (very rare in this state) you get quality hardwoods. Far too many sites had poor management in the past (high graded, grazed or the forester was simply clueless) that all hardwood sites get lumped together as poor.

We can grow excellent quality paper birch, basswood, red oak and black ash. Not exactly a basket of high value species but I think that is where an innovative mill manager like Mr. Wenrich could make an operation succeed. I think the opportunity is here but as I stated before, deep pockets would be needed to get it off the ground.

Clark

[barbender]

I agree Clark, and those are the same species I had in mind. Especially the Red Oak, Paper Birch, and Black Ash. I put so many saw logs in the pulp and pallet piles it makes me want to cry.

[barbender]

Well, I've followed the advice you guys gave me. Looked around on Thomasnet, found a few leads. Called one today, they are more than happy to buy the smaller volumes I could generate. Now as to pricing, can I make it work? I'd have to learn to grade hardwood, which I'd like to do anyways. But how do these prices sound to you? I don't even completely understand the grades at this point, but basically, they had 3 prices for Red oak- $900/mbf, $600mbf, and $400mbf. I know that all three were above 3a, because they didn't want much, if any of that. Seems a little light on price to me, but if I can get logs cheap, maybe. Something to try anyways.

[Larry]

Glad my tip on Thomasnet worked for you. 

Since we don't know what you pay for logs its hard to say if the price will work out ok.  Two things stand out.  You need to find a market for the cob as pallet cants or ties.  I can sometimes move a little of the low grade on craigslist, but I don't produce much anymore.  The second is you must take the 3 day short course in grading.  There is $300 difference tween FAS and 1c. Turning the cant or a little trim can turn the 1c to FAS sometimes....if you know what your looking at.

[barbender]

Thanks, Larry👍

[Ron Wenrich]

When I was sawing, my red oak usually ran about 50% F1F & btr.  My 2 Com was about 10%.  These were primarily 2nd cuts, as the butts went for veneer.  Your 3 grades are probably F1F & btr, 1 Com, and 2A Com.  You might be in an area that uses the Select grade.  We didn't have the Select grade in our area.  Grade is determined by the worst side of the board, except for a Select or F1F.  In those cases, you grade on the best side, given you have a 1 Com back.  This means you'll have to learn how to read a log by looking at the face and judging what the back will pull.  It gets easier with experience.

To learn grading, you might be able to find some short courses offered.  I took mine through our forestry school.  Learn the grades by looking through the NHLA rules book:  http://www.nhla.com/rulesbook  If you're going to grade your own, you'll need a lumber grading stick.  Then you can get on a stack of boards and figure out your grade.  It'll make your grade sawing abilities better.  Also, go to where your lumber is going and see if you can watch lumber getting graded.  They'll be glad to show you the ropes.  I know that lumber graders treated me and my lumber different when they knew I understood lumber grades.

As for pricing, since you're only offering small amounts, your price will probably be lower.  The majority of green lumber gets sold by the trailerload lots.  That means a wholesaler will pull together many small lots to make a load.  Extra handling and capital costs add up.  What are your alternatives? 

Is it worthwhile?  A lot depends on your timber quality and yield.  Profit = Lumber value - mfg costs - log costs.  Breakeven comes about when lumber value = log costs + mfg costs.  You're trying to increase your profit by increasing your lumber value.  When you're sawing, you'll have to do more separation.  You'll have pallet and grade lumber.  We had to separate by length, as well.  It's fairly easy if you saw your logs by length. 

You will have to learn to position logs so that defect is on the corners of your face.  That will yield you more clear face cuttings, which effects grade.  I sawed on my face until grade started to drop, then turn.  To predict backside grade, look for swirls where knots might start to appear.   I would stay away from chasing grade after I had a 1 Com face.  You'll find that even though 2A Com has a better price, you'll pull into a 3 Com back, which drops the value to 3 Com.  Do the math and you'll find it is better to put it into pallet cants or ties. 

The overall effect of sawing for cants or ties in the heart and grade was an increase in lumber value and a decrease in mfg costs. Your results may vary. 

[4x4American]

It seems a little low priced to me.  Are the uppers sel/btr or f1f/btr? 

[barbender]

Thank you, Ron, you're always a wealth of knowledge on hardwood! 4x4, I think they were using f1f/better. I have to talk specs with them again before I get too serious. This outfit is called Renneberg Hardwoods, they buy green hardwoods, kiln dry and mill for wholesale and retail. I've seen their delivery truck around before, I think pretty much all of the cabinet shops get their wood from them.

[longtime lurker]

My business would fail without my wholesale customers. I rely on them to shift volume, and while the margins are tight so long as they shift volume for us we can maintain enough cash flow to keep the wolves at bay month in month out. My own wages and profit comes from the trade and retail customers but the big guys are my bread and butter that covers staff, power & fuel, equipment leasing and repair costs, logs costs etc etc etc.

My suggestion would be that if sawmilling isn't your core business then it would pay to run some sums on value adding and selling further up the chain. Kilns are quite cheap for what the return is, lumber pretty much doubles its value in that process.

I just question the logic of building a sideline enterprise that requires volume to make profit. We all do what we gotta to get from point A to point B, and if you don't have the resources to do anything but sell wholesale or you plan to grow a larger sawmill operation that will need wholesalers to shift tonnage its different. But if it's going to stay a sideline I'd be thinking kiln and a couple large cabinet shop customoers that will pay a bit more for not much more effort on your behalf.

Just my $0.02

[barbender]

Thanks Longtime, I appreciate the .02 ;)

[killamplanes]

Those prices seem to be in line with flooring lumber here. Usually not gonna get rich with flooring market but if it's siding of tie than the combination makes the log pretty profitable..