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Selling green walnut to supplier

Started by firefighter ontheside, August 24, 2021, 12:12:00 PM

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firefighter ontheside

I will pay up to $1/bdft in the log for walnut logs normally.  I mill it and dry it and then sell for $6.  A hardwood supplier that i've been buying from for over 20 years is interested in buying green sawn walnut from me.  I'm interested, since I seem to always have a good supply of walnut logs and it would be good to cut and sell some of it without drying.  I have to figure out what is a good price for me.  I would appreciate any input.  Thanks.
Woodmizer LT15
Kubota Grand L4200
Stihl 025, MS261 and MS362
2017 F350 Diesel 4WD
Kawasaki Mule 4010
1998 Dodge 3500 Flatbed

btulloh

Find out what they think is a good price first. They might have a price in mind that is higher than your price. Usually the guy that throws out the first price is at a disadvantage. Also, I think it's better to let the market set the price rather than setting it based on your cost and overhead.  Market pricing is usually the best unless the supply is high and the demand is low. Good chance of giving away profit if it's a demand driven market.  Of course their price has to be equal or higher than your threshold price to make it worthwhile. Just my $0.02
HM126

Larry

Hardwood Market Report will give you prices.  They used to send out a free sample copy. 

I've sold a lot to the green walnut market long time ago.  Really liked the process.  Take the mill a 1,000 board foot load and get a check in the mail a few weeks later after it was graded.  Sapwood no defect. 

Lumber had to be fresh or they wouldn't buy it.  Fresh walnut steams better and commercially about all walnut is steamed.
Larry, making useful and beautiful things out of the most environmental friendly material on the planet.

We need to insure our customers understand the importance of our craft.

moodnacreek

The price is what everyone talks about but what about the details? How small a load will the buyer pick up and how long will it take you to saw it and how long do you wait for the truck and do you have to be there to load? How are you going to keep the top and bottom boards flat and wet?  Then there is end trim, long boards sticking out of pack twisting in the sun and wind waiting for truck that was supposed to come yesterday. The white sapwood will turn green this time of year. green lumber is like vegetables .

firefighter ontheside

All good points to talk about with the guy.  He is a really good guy and we have become friends over the years.  I'm pretty sure he is open to just about any size load.  I don't think he needs me as a supplier, but he wants to support me the way I have supported him for 20 years.  The thought about the sapwood turning green makes me think that cooler times of year would be best for this project.  We would have to make the timing good so that the wood is not stacked without stickers for very long at all.  I will talk to him about a minimum load for him to pick up.  I don't plan to be delivering it.
Woodmizer LT15
Kubota Grand L4200
Stihl 025, MS261 and MS362
2017 F350 Diesel 4WD
Kawasaki Mule 4010
1998 Dodge 3500 Flatbed

YellowHammer

I buy green walnut, and from a buyers standpoint, I look for several things:

Minimal sapwood - which is in direct conflict with the seller who wants to include lots of sapwood to increase yield.

Minimal end cracks / adequate trim

Balanced boards - well sawn wood with axis of board down at the axis of the log.

Minimal wane - NHLA rules allow up to 10% wane, and commercial mills sell to 9.9% wane to increase yield, but that means the buyer pays for 10% increased waste.

Wide boards - walnut boards tend to crook and twist, so it's real easy for a mill to saw up little logs and sell narrow boards.  However, with narrow boards, the "edge drop" or trim amounts is substantial after drying, which penalizes the buyer.

Grade falls off with walnut as the boards get deeper into the heart.  So thats the balance of the sawyer.  High grade with sapwood, or low grade all heartwood.  It's a trade off.  When I'm sawing for myself, I aim for 95% heartwood on the side wood.  When I talked to one commercial mill and asked them to do that for me, they refused saying if they did that they would go out of business.  So if you can supply high grade, wide boards with minimal sapwood, you'll have a definite market advantage.

Get you price from the HMR, that's what they are paying.  Make your grade higher that NHLA rules allow, and you can set your price to HMR + %.
YellowHammerisms:

Take steps to save steps.

If it won't roll, its not a log; it's still a tree.  Sawmills cut logs, not trees.

Kiln drying wood: When the cookies are burned, they're burned, and you can't fix them.

Sawing is fun for the first couple million boards.

Be smarter than the sawdust

pezrock


longtime lurker

Quote from: firefighter ontheside on August 24, 2021, 03:16:02 PM
All good points to talk about with the guy.  He is a really good guy and we have become friends over the years.  I'm pretty sure he is open to just about any size load.  I don't think he needs me as a supplier, but he wants to support me the way I have supported him for 20 years.  
What if I said this: Put yourself in his shoes. Do some sums on what it's going to cost him to buy + ship + dry + inventory cost + sales costs. And he's in business so he has to be able to make a profit on this, and his profit has to reflect what it costs to run your business on his overdraft, which is what a good wholesale green buyer is actually doing. 

Here, let me say that last sentence again, in italics, because I don't think I've ever seen it put that way here before: his profit has to reflect what it costs to run your business on his overdraft, which is what a good wholesale buyer is actually doing.

You are being given an opportunity here. Lot of guys don't see it as an opportunity because all they ever see with wholesale buyers is somebody else "taking all the profit" without understanding fully what that somebody else brings to the table. That doesn't mean it's a good opportunity, that remains to be figured out.
But now is a good time for you to figure out what your end game is here, cuz if you want to be a full time sawmiller these are the kind of deals you need to go forward. Profitable businesses without turnover will always struggle to go forward, and the short cashflow cycle of selling green can go all sorts of good things for your turnover, so long as your numbers add up.

Just don't be like me... I had one wholesaler a while back and eventually I figured out that it had cost me about $210k to do $200k worth of work into him in a year, because the freight cost was calculated on truckloads but they were never full truckloads. Wasn't malice.... just me taking my eye off the ball. And all it had to do was be breakeven and a bit and I'd have been happy: I got a whole heap of retail jobs to be profitable on, those guys there I expect a margin of 2.5% or so. But my banker likes to see them zeros on my numbers, in and out. And comes a point you got to borrow to get ahead in this game... production takes equipment and that takes cash, and you can either work really hard and save for ten years to buy equipment or you can borrow and let it pay itself off.

Ten years of your life has a cost too, people tend to forget that.
The quickest way to make a million dollars with a sawmill is to start with two million.

WDH

Remember Hardwood Market Report is for tractor trailer loads.  It will not apply to small volumes.  Prices are all by grade.  I have the Report at home but I won't be home till weekend.  Personally, I would not go below HMR x 2 for green rough.  
Woodmizer LT40HDD35, John Deere 2155, Kubota M5-111, Kubota L2501, Nyle L53 Dehumidification Kiln, and a passion for all things with leafs, twigs, and bark.  hamsleyhardwood.com

YellowHammer

Remember, friends are friends and business is business, and the best business is when fair  business is being done between friends.  

So be fair, make sure it works for both of you, and get off to a good start.  Get honest feedback going both ways, that's the only way to keep good things going.



YellowHammerisms:

Take steps to save steps.

If it won't roll, its not a log; it's still a tree.  Sawmills cut logs, not trees.

Kiln drying wood: When the cookies are burned, they're burned, and you can't fix them.

Sawing is fun for the first couple million boards.

Be smarter than the sawdust

Larry

The first couple of jacket boards off each face are likely to be high grade with a lot of sapwood.  A large portion of the log.  Worth nothing to the boutique wood buyer.  Worth top dollar to the commercial guy that steams.

If your buyer doesn't want sapwood, which is a normal small time buyer, somebody is going to eat the cost of those jacket boards unless you have a buyer.  You will have to increase the price of the black boards probably 3 times over HMR to cover that cost. 

The places I sold to took everything except 3C.  Luckily, with walnut rules not much 3C in a log.

The low grade pith boards are not a problem in today's market.  They sometimes sell better than FAS because they are "character" boards.
Larry, making useful and beautiful things out of the most environmental friendly material on the planet.

We need to insure our customers understand the importance of our craft.

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