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With dropping lumber prices, when will demand for sawmills follow?

Started by DanMc, September 28, 2022, 08:46:59 AM

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DanMc

LT35HDG25
JD 4600, JD2210, JD332 tractors.
28 acres of trees, Still have all 10 fingers.
Jesus is Lord.

charles mann

Dont remember pre-plandemic plywood prices being what i just paid for 2 sheets of 3/4" construction grade, $110 before tax. They were around $32 a sheet before the world went crazy.
 I dont understand the price hike, except for fuel price increase, but the sawmill that provides a good bit of the lumber products for the store, is 2 miles down the road. 
Temple, Tx
Fire Fighting and Heavy Lift Helicopter Mech
Helicopter and Fixed Wing Pilot

moodnacreek

I would predict that common softwood lumber will [is] drop dead and many small band mill owners who has discovered how much work it is will sell their machines thus hurting the sales of new ones.

Crusarius

Since people continued to buy wood at insane prices like it was going out of style, I have a hard time believing that the big box stores are going to drop their prices very much. Guarantee they will never be back to pre-pandemic pricing ever.

Funny how the consumers drive everything without even realizing it.

YellowHammer

I bought 4 different species (packs) of hardwood lumber last week, one dropped, one stayed the same, and two were higher.

I bought a pack of 8/4 soft maple today, it went up since last time I bought it, fairly recently.  

I'm getting some 8/4 walnut tomorrow, same price as last month, nearly $9 per bdft.

I don't do much softwood, but the hardwood and exotics I have to buy are still painfully high.

I have my second truck from Canada coming in next week because I can't get decent exotics at wholesale prices in the States.  It's less expensive for me to bring it from Canada to Alabama, than from North Carolina to Alabama.  Go figure.



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

stanmillnc

I bet most of the new sawmill owners that bought during the low interest, easy money days will be selling soon. It's becoming more obvious that there are a lot of new mill owners that don't know what they're doing and think there's easy $ to be made running a sawmill operation. Just look at the FB pages and FB Marketplace....I'm thankful to be able to come here to the Forum for 'real deal' information and to interact with professionals instead of posers. 

Speaking of posers - I decided to sell my truck recently and listed it on FB Marketplace. 90% of the inquiries were from those looking to buy it solely for their image. It's a big black diesel RAM 3/4 ton, like in the popular show Yellowstone. Most of these keyboard cowboys did not have the $ to afford it (said they could get the loan, but ultimately couldn't) and none had a construction business, or anything to pull / haul that would necessitate having a 3/4 ton diesel truck. After dealing with these time wasting posers for a couple weeks, I relented and just traded it in to the dealer.

Bruno of NH

Log prices haven't gone down.
I haven't be able to get hemlock logs
Just found some 300 to 490 depending on size and no shake.
I'm still very busy.
You won't see retail prices drop that much.
Lt 40 wide with 38hp gas and command controls , F350 4x4 dump and lot of contracting tools

Southside

I doubt that any of the recent rush in sawmill purchases produced enough commodity framing material to build a single home.  Between rules prohibiting the use of ungraded lumber to the rest of what is needed to run a sawmill business.  Somewhere there is someone who did buy a mill and will build their own place, but the majority bought mills for reasons other than to produce commodity framing lumber.  Think about it - spend $50K on a mill to avoid paying $8 for a stack of 2x4's to build the shed in your back yard that houses the riding mower?  

New mills on fire sale will be a result of inflation, fuel, etc eating up the disposable income budget and the time the wifes car broke down with the kids and dogs in it at the worst possible spot.  Time for the toy to go.  
Franklin buncher and skidder
JD Processor
Woodmizer LT Super 70 and LT35 sawmill, KD250 kiln, BMS 250 sharpener and setter
Riehl Edger
Woodmaster 725 and 4000 planner and moulder
Enough cows to ensure there is no spare time.
White Oak Meadows

barbender

I feel kind of guilty for waiting like a vulture for my coming mill upgrade😂
Too many irons in the fire

bigblockyeti

Quote from: barbender on September 28, 2022, 03:37:12 PM
I feel kind of guilty for waiting like a vulture for my coming mill upgrade😂
Don't be, I'm doing the same.  I don't want to sell my stationary mill but an LT40SH or LT50 would compliment it nicely.  Now if I can just keep the money I've set aside from burning a hole in my pocket, I'll have my pick.  My brother finds it amusing to send me deals on guns (that aren't cheap) as he knows I have a weakness, so he's mt biggest enabler when it comes to non-focused expenses.  .338 RUM rounds are pricey.

peakbagger

Sad to say but if the fed slows down the economy like they are trying to there are folks who may have been okay financially that will get in over their head and a sawmill is good thing to sell if someone needs the bucks. I know a lot of contractors that have been working all the hours they wanted since things opened up after the early Covid shutdowns. They earn a lot of bucks but they also spend a lot of bucks in a hurry. if there is a construction slowdown next year they will burn up the savings this winter and be looking for cash by the spring. 

longtime lurker

The lean times are coming: It's always been a boom and bust industry and we know what has to come next.

That said I'm not expecting a price crash across a lot of sectors so much as a sideways slide... prices will stay around the new normal. But input costs will keep going up and chew into the margins and tough is tough no matter how you get there. I read an article the other day that suggested it might take 7 years to fill the housing oversupply in China, and that's bad news for the world economy, and a lot of construction materials suppliers who will be looking to dump product into the international market - commodity lumber might take a big dive.

A 9.3x 62 makes more sense than a 338 RUM IMHO, all the thump that's needed without burning out barrels.
The quickest way to make a million dollars with a sawmill is to start with two million.

terrifictimbersllc

Quote from: barbender on September 28, 2022, 03:37:12 PM
I feel kind of guilty for waiting like a vulture for my coming mill upgrade😂
Some shadows passed over me today when I was outside, I thought of you.  :D
DJ Hoover, Terrific Timbers LLC,  Mystic CT Woodmizer Million Board Foot Club member. 2019 LT70 Super Wide 55 Yanmar,  LogRite fetching arch, WM BMS250 sharpener/BMT250 setter.  2001 F350 7.3L PSD 6 spd manual ZF 4x4 Crew Cab Long Bed

SawyerTed

I suspect that orders for mills will or are being cancelled now. Or a little selfish piece of me is hoping so.  I'm just waiting on mine with the cash in the bank.  Depending upon interest rates at the time I'll decide whether to use my money or OPM (other people's money). 
Woodmizer LT50, WM BMS 250, WM BMT 250, Kubota MX5100, IH McCormick Farmall 140, Husqvarna 372XP, Husqvarna 455 Rancher

bigblockyeti

Quote from: peakbagger on September 28, 2022, 05:36:31 PM
Sad to say but if the fed slows down the economy like they are trying to there are folks who may have been okay financially that will get in over their head . . . . .
If fixing the economy places them in over their head, they were never okay financially, they just thought they were.

bigblockyeti

Quote from: SawyerTed on September 28, 2022, 08:28:32 PM
I suspect that orders for mills will or are being cancelled now. Or a little selfish piece of me is hoping so. 
If I were a Wood-Mizer financial exec, the order policy would change to 3% (or $500 whichever is greater) non-refundable upon placing an order.  The only exception to a deposit refund would be if buyer's remorse kicked in within 48hrs of placing the order.  Such a policy would help cut down on the folks placing orders for 4-6 mills (big ones) at a time.

SawyerTed

Is that really a thing?  Orders for multiple mills?  Knowing what lead times are, that's some serious speculation.  The only way that could work is if "resellers" had contracts from buyers.  That's some major money (at least to me) $250,000 to $500,000 on speculation to make 10-15 percent?  That's assuming demand stays up. 

I get what you are getting at - Woodmizer isn't discouraging speculation of this sort by their refundable deposit if the order is cancelled.   

My gut tells me Woodmizer is counting on some pre-pandemic equilibrium returning.  Between waning interest and increased interest rates the sawmilling craze will lose its shine financially. 
Woodmizer LT50, WM BMS 250, WM BMT 250, Kubota MX5100, IH McCormick Farmall 140, Husqvarna 372XP, Husqvarna 455 Rancher

Southside

It's not like they built a new facility to keep up with orders, they were going to build those mills one way or another. The question is how long will folks have to wait and can the dealers get some inventory as a result of the dust settling.
Franklin buncher and skidder
JD Processor
Woodmizer LT Super 70 and LT35 sawmill, KD250 kiln, BMS 250 sharpener and setter
Riehl Edger
Woodmaster 725 and 4000 planner and moulder
Enough cows to ensure there is no spare time.
White Oak Meadows

bigblockyeti

I started shopping for an LT28 after having my stationary mill for only a few months and lead times had already grown significantly.  I backburnered the idea for a few months to concentrate more on sawing and learning, upon contacting WM earlier this year lead time had gone way up again and prices too.  I worked with the same sales guy a few times and he told me he just had a customer place an order for 6 LT35 and such orders were becoming increasingly common.

Magicman

I have never had any indication that any of my sawing has ever been related to the price of commercial/store bought lumber.

The majority of the "extra" calls that I have gotten has been from folks wanting to buy lumber, which I do not sell.  Those "buying" calls were a direct result of high lumber prices.
Knothole Sawmill, LLC     '98 Wood-Mizer LT40SuperHydraulic   WM Million BF Club Member   WM Pro Sawyer Network

It's Weird being the Same Age as Old People

Never allow your "need" to make money to exceed your "desire" to provide quality service.....The Magicman

taylorsmissbeehaven

It seems they are gonna strangle that easy money. Its gonna hurt a lot of people before its over Im afraid. Im glad I got my LT 35 when I did. Sure I would like to have two pumps to increase speed and a wide head for those bigger logs, but at the end of the day it covers my needs. My grandfather told me when I was a kid " Son I always had everything I ever wanted, I was just real careful what I wanted". Took some years for me to understand those words. Wish I could thank him for that wisdom now. Brian
Opportunity is missed by most because it shows up wearing bib overalls and looks like work.

Tom K

I mentioned this on another thread, but my thoughts are we are at least 1 year away from any price correction and possibly 2-4 years. There is just way too much money floating around in the economy right now for prices to go down any. I'm guessing a 10% reduction in some pricing in 12 months due to demand, with that only growing if the economy worsens. All that extra money needs to land somewhere first. I don't think a lot of prices will every be back to "normal". There will be a shift in how certain things are valued.

Using WM as an example, even if they have some canceled orders there are still plenty to fill those cancelations. Let's face it, most Americans are not good with budgets and living within their means. People will finance every toy they can until someone tells them they can't, we aren't there yet. Most businesses are still pretty flush with cash and will easily cash flow payments or just pay cash. A softening economy isn't going to change this equation very fast, but a hard drop would. My opinion, some deals may come up, but the true deals are 3-4 years out.

I know we're bouncing back and forth from wholesale/retail & hardwood/softwood prices in some of these comments. On a retail framing and sheathing stand point prices are significantly lower now then they were a year ago. Locally at least framing lumber is 50% lower then a year ago, OSB 75% lower, and plywood 50% lower. 1/2" OSB is $15 sheet, 1/2" CDX is $32. Steel 29ga liner panel has dropped from a high of $3.70/LF down to $2.85/LF.

YellowHammer

I went to order a 23 Ford Platinum 350 yesterday and the salesman said Ford hasn't even opened the season yet, but said prices would go up about $10,000 on the truck I was looking to order, to a little over $100K.  Right.

So I went by the Chevy dealer, and there was not a single 3500 on the lot and they told me many orders had been canceled by Chevy leaving the customers hung out to dry.  Ok, moving on.

Then I went to my Kubota dealer ready to write a check for my mini excavator but it had been delayed.  Maybe it will come in later this month.  Well, poop.

While I was there, I tried to order a mulcher head for the mini excavator and the manufacturer said they were 6 to 8 months out, and what used to be $24K is now $36K.  Well, ain't that a shock? Who didn't know that was coming, so I left.  

Basically, I was ready to spend a quarter million bucks yesterday and all I came home with was a headache and a $20 chicken finger combo with cheese bites from Zaby's.

I got a unit of of KD zero defect walnut from one of my wholesalers delivered this morning at a comforting $9 per bdft, wholesale plus a hefty delivery fee and fuel surcharge.  I used to get it for $4 a couple, 3 years ago.  

Ain't no prices going down that I'm seeing and whatever is about to happen, it's about to get worse.

Yet I have a load of exotic lumber coming from Canada next week at pre pandemic prices and free shipping.  From Canada to Alabama.  I couldn't even get these species in the US except for criminally high scalping prices.  Figure that one out.

The world used to be crazy, now it's just getting stupid.  I feel like I'm in a Twilight Zone movie.  Hey, is this real?????? or just a bad movie?

I'm ready for it to be over.
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

Old Greenhorn

Your Momma probably told you there would be days like that.

OTOH, you could try clicking your heels and repeating "There's no place like home" (works best with ruby slippers on your feet I am told.)
Tom Lindtveit, Woodsman Forest Products
Oscar 328 Band Mill, Husky 350, 450, 562, & 372 (Clone), Mule 3010, and too many hand tools. :) Retired and trying to make a living to stay that way. NYLT Certified.
OK, maybe I'm the woodcutter now.
I work with wood, There is a rumor I might be a woodworker.

bigblockyeti

Quote from: YellowHammer on September 29, 2022, 09:41:50 AM
While I was there, I tried to order a mulcher head for the mini excavator and the manufacturer said they were 6 to 8 months out, and what used to be $24K is now $36K.  Well, ain't that a shock? Who didn't know that was coming, so I left.  

There's an ~80hr Prinoth M450E-900 for sale an hour from me for $18,2.

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