I have made the decision for the next purchase for my business, it was a toss up between a log loading trailer or a firewood processor I chose the processor do to the fact I would be using it more than the trailer. My question is is it better to lease one or try to get a loan for one what are your thoughts?
takes a long time to pay one off here we get $85 a face cord (4'x8' 16'' blocks) that's not bad when u only have a chainsaw and a wood splitter invested but its hard to pay off a 35000 dollar processor when u still only get 85 a cord... just my thoughts
You would break eve at 411 face cords... or 104 real cords, with a processor that could be done in short order... if you had the wood and the market. (not factoring in fuel etc)
$340 for a full cord is a bit steep round here. lucky to get 250, most times its more like 200, unless you take it into the city... then its just plane highway robbery :D
really? here 340 for a full or a bush cord is good! only the guys cuttening and splitting with a saw and splitter sell it for that the guys with processors are more in the the 92- 98 a face cord range because they have more invested and usauly have to buy there loads of 20 footers to process
Its pretty hard not to cut your own wood, so demand is a little lower I imagine. Most folks that burn wood either have property to cut off of, get DNR or FS permits (DNR is free and FS is cheap). plus its only a 15-20 mile drive to get into thick forest from anywhere in western warshington, when I do sell fire wood its mostly to older folks that can no longer cut their own, been a whole bunch of folks here recently that have just acquired or moved into a house with wood heat so maybe the prices will start going up? Hard to say though
Quote from: thenorthman on March 23, 2013, 12:28:31 PM
Its pretty hard not to cut your own wood, so demand is a little lower I imagine. Most folks that burn wood either have property to cut off of, get DNR or FS permits (DNR is free and FS is cheap). plus its only a 15-20 mile drive to get into thick forest from anywhere in western warshington, when I do sell fire wood its mostly to older folks that can no longer cut their own, been a whole bunch of folks here recently that have just acquired or moved into a house with wood heat so maybe the prices will start going up? Hard to say though
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also here it seems every body with 10 acres and an old farm tractor is selling fire wood so it makes its harder for the guys with a processor... I personaly don't sell much wood most mine is sold on the landing in 20' lenghs... I might slpit and sell 80cord a year at the most... just in the spring for a few weeks more then anything
With my experience with those machines (which is absolutely none) I would consider a lease with an option to purchase after 6 months or a year. That way if it is a lemon I can send it packing and if I like it then I can purchase it and hopefully salvage some of my lease payments. Just my thoughts on the subject. Gerald
Well around here it goes for around 200 to 240 per cord, I also plan to do mobile processing. We burn about twenty cord a year in the boiler plus I will be getting all my old customers back. When I was doing the firewood I was selling about 100 cords and had to turn down a lot of customers because I couldn't keep up with the demand.
Quote from: logman81 on March 23, 2013, 12:54:04 PM
Well around here it goes for around 200 to 240 per cord, I also plan to do mobile processing. We burn about twenty cord a year in the boiler plus I will be getting all my old customers back. When I was doing the firewood I was selling about 100 cords and had to turn down a lot of customers because I couldn't keep up with the demand.
You want to keep in mind those prossesers need nice straight wood! The loggers are going to want a nice price for there high grade firewood!
personally I'd rather send to wood to the mill, less work, but I burn maybe 5 cord for home use and sell 20-30, so a processor is really not worth it. Besides I'll let my partner make the money on the firewood he needs it more...
Some processors take logs that are a little crooked...better than others.
I bought a processor a few years ago in self defense. I have to get rid of all the logs on a job before I get paid for the thinning I have done. Working up firewood with a saw & splitter, day in & day out 1 man could produce about 1 1/2 to 2 cords a day. With my little Chomper 1 man can produce up to 8 cords a day. So that means I'm off to the next job in a lot less time than doing it by hand.
If you lease a piece of equipment, the entire lease payment should be tax deductable, where if you borrow money to buy the machine it would be depreciated over several years. But you'd probably want to talk to your tax person about that.
Around here we have lost about all of our log market, but everyone is still logging. That makes for a lot of firewood available for sale in a sparsly populated area. Supply & demand...Firewood prices dropped to $120 a full cord this year. Since I don't depend on firewood for my living, & at $120 a cord delivered there isn't room for a profit anyway, I chose to give my firewood to those who are elderly, sick, unemployed, or what ever other hardship they may be having. We call it "blessing wood", this is our second year of doing this without selling any. The other firewood dealers don't care much for me anymore (imagine that). :D
Andy
I think your right about leasing with option to buy.
Green wood averages $200/full cord here,decent hardwood pulp around $100/cd. delivered. I have found I can get some crooked wood through my Timberwolf without a lot of trouble,but will admit to having climbed atop the infeed trough more than once to relax a bend in a log.You learn to spot the problem pieces,set them aside,straighten them with a chainsaw and put them on the deck later. I used home equity to buy mine,in the slow months I don't worry about anything but the interest. You will find(hopefully)you can do a lot more wood in a day and not be as tired!
Mike
Quote from: Woodhauler on March 23, 2013, 04:07:08 PM
Quote from: logman81 on March 23, 2013, 12:54:04 PM
Well around here it goes for around 200 to 240 per cord, I also plan to do mobile processing. We burn about twenty cord a year in the boiler plus I will be getting all my old customers back. When I was doing the firewood I was selling about 100 cords and had to turn down a lot of customers because I couldn't keep up with the demand.
You want to keep in mind those prossesers need nice straight wood! The loggers are going to want a nice price for there high grade firewood!
very good point!!
I get my wood from the stumpage that I buy from land owners so I get it cheap and I only buy straight good quality pole wood that I harvest myself, this would be an additional source of income besides my logging and land clearing business. I'll know a lot better when my wife and I go to the show Maine and pick a machine that fits best and will work with us.
LEASE,LEASE,LEASE........ I lease a Multitek 1610 ez..... The finance plan is a 5 year lease purchase !! I own it with the final payment..... I have lease purchased all my equipment over the past 30+ years... You have a 100% tax write off each year for yor lease expense, if you finance you can only write of the depreciation !! Lease down payments are usually and easier number to deal with than what most banks require..... Generally 1st and last payment !!
my processor cost 100 cords !!
Quote from: thenorthman on March 23, 2013, 12:06:10 PM
You would break eve at 411 face cords... or 104 real cords, with a processor that could be done in short order... if you had the wood and the market. (not factoring in fuel etc)
$340 for a full cord is a bit steep round here. lucky to get 250, most times its more like 200, unless you take it into the city... then its just plane highway robbery :D
Cord measurement may be different in Washington, but Measurement Canada sets a stacked cord at 128 cubic feet. Cutter88's face cord (4x8x1.33 = 42.56 cu ft) is 1/3 of a full cord. $85*3 = $255.
$35,000/$255 = 137 full cords or 411 face cords. What cutter88 needs to figure out is how much he can pay towards his liabilities (the loan or lease payment) after he subtracts for his fixed costs and the variable costs of each cord. If he can pay $50/cord (logman81 wrote that he can sell a cord for $200-$240, so $200*.25) towards the note then it will take 700 cords to pay off the processor. If he can sell the wood for $240/cord and was able to pay $60/cord towards the note then it would take 583 cords to pay off the processor. Then you factor in interest and fees and the number of cords goes up even more. Theoretically, if you can sell a cord for $240 then you should be able to apply more money per cord (maybe 30%) towards the note.
A business method sometimes used to purchase equipment is to set up a sinking fund (an interest bearing account with periodic deposits) a number of years ahead of the purchase. If you were able to set aside $50/cord when you were selling 100 cords/year (not sure if this is face cord or full cord) and started 3 years ahead of the purchase you would have $15,000 + interest available for the down payment. If you were selling 100 face cord/year then the math would obviously be different, but the premise is the same. Unfortunately, many companies aren't in a position to be able to set aside a good chunk of money per cord for numerous years. You will initially be sacrificing profit, but once everything is paid off the note payment should become profit or another sinking fund for another piece of equipment.
dont forget your going to want something to load it too. My uncle bought one two years ago and uses a skid steer with grapple to feed it. He can cut and split a full cord and a half in an hour with two guys. He paid for it and the skid steer the first summer, but you have to have a fire wood market. Last year he sold close to 400 full cords. Plus like said earlier your going to want decent wood. I try selling him 12"-20" strait wood, the small stuff doesn't clamp down good when cutting it and the big stuff has to get re split by hand.
Thank you for the education black_bear :) That got me thinking ??? Yes I am talking full cords 128 cubic feet. Like I said there is a good market around here for it I was selling about 100 cords +/- per year, and had the opportunity to sell much more but I couldn't process the wood fast enough to keep up. I do have a way to load the machine in the form of a 40hp tractor with a grapple on the bucket. All the wood that would be used for firewood would be in the 8'' to 18''. Anything that is straight and ten inch or more on the small end goes to the mill for pallet logs ect. I have a friend that has a rapido locol 20 and I sell wood to him on occasion so I know the type of wood needed so I only buy good straight consistent diameter poles. I also have the opportunity to do packaged bundle wood if I want but not sure if I want to do that again even though I was getting around $400 cord for it. Basically lots of ways to pay for it and put enough aside for a payment but just have to figure out what that is and what my fixed cost is.
Quote from: bull on March 24, 2013, 07:43:53 AM
LEASE,LEASE,LEASE........ I lease a Multitek 1610 ez..... The finance plan is a 5 year lease purchase !! I own it with the final payment..... I have lease purchased all my equipment over the past 30+ years... You have a 100% tax write off each year for yor lease expense, if you finance you can only write of the depreciation !! Lease down payments are usually and easier number to deal with than what most banks require..... Generally 1st and last payment !!
I would have leased a wife, if i could have 8)
10" pallet logs would make more money being cut into firewood.
Yes I know that, most of that does go to firewood. Seems leasing is the way to go. What are some of the requirements for getting a lease?
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I would have leased a wife, if i could have 8)
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Haha. I leased mine for a year, then went with the option...Been paying ever since. :D
Insurance from fire loss.