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things that make you go HMMMMM

Started by ehp, March 01, 2021, 09:00:00 PM

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ehp

Guy I know phoned me today saying he was looking for a skid of 2 by 4 by 10 feet long , he phoned the lumber yard here are for spruce they were just over $12 a piece and if I cut spruce I get $200/1000 of doyle scale on landing , these numbers are just not fair in my eyes lol  , we get nothing and the others get rich

ehp

that means they are getting roughly $1800/1000 on lumber scale and everyone knows that 1000 feet on doyle scale cuts out over a 1000 feet of lumber and more than just abit

kiko

The logger is the only one that does not get to decide the value of their product.  

quilbilly

My brother and I had a good laugh about this just the other day. Cedar is going for over $2 right now, and though we are getting paid near $2 the overrun on cedar is between 35-50% most of the time, DF is going for more than twice what's paid, it's gone up every week since October at the lumberyard but we have been getting paid the same for months. 
a man is strongest on his knees

nativewolf

Liking Walnut

mike_belben

Quote from: quilbilly on March 01, 2021, 09:17:49 PMDF is going for more than twice what's paid, it's gone up every week since October at the lumberyard but we have been getting paid the same for months.
And until loggers quit bringing it in the price will remain low.


Its the same exact story with truckers, brokers and shippers.  Everyone takes their profits when they can, because they can.  


Call the mills you sell to and tell them youre parking it until they spread some of that gravy.  Thats the only way to get a raise.. For lots of loggers to hang it up and leave the mill out to dry.  If they want wood for a pittance let them go cut it themselves. 
Praise The Lord

barbender

Same story up here. The lumber and OSB mill are running full tilt, gate price at the OSB mill have came up a bit. Why? They weren't getting enough wood. The lumber mill has not had to raise prices, they've been stuffed to the gills with wood since Covid hit. The paper mills got slowed down by Covid, loggers that supplied them (like the company I work for) didn't want to sit home and go broke, so they switched to cutting pine for the lumber mill. It's pretty simple, there is an over supply on the wood side, mills can get all they can process at the current prices.
Too many irons in the fire

Haleiwa

Logs get priced on multiple factors, but the three biggest are supply, present demand,  and projected demand.   A surplus of logs to the capacity of the mill will hold down the price no matter what the demand; a mill cannot handle more than its capacity,  no matter how much it may want to.  A mill will vary its price sheet based on demand; provided it has capacity it will process what the market wants.  Mills don't generally sell directly to the consumer from the saw.  Lumber is dried, planed, shipped to the dealer, and stored in the dealer's yard until it goes to the construction site.   All that takes time in addition to money, and the mill has to anticipate what the market will do in the future.   Unless you are delivering to an empty yard, the logs you haul in today could very well be sawn in a significantly different market from when you sold them.

The market never loses, never.  Even under communism the market wins.  The USSR failed in great part because there was no incentive for production.   Eventually the reality of a manipulated market trumped ideology.   The reason most people misunderstand how markets work is the time frame.   You need to make decisions in the short term; anywhere from how to pay this month's bills to expecting to live for another 50 years.   The market works over a much longer time,  and just as importantly,  a much larger area.  You probably don't want to haul logs much more than a few hours, but the market for retail lumber moves products worldwide.   The contractor in Arizona doesn't care if his framing lumber originated in Nova Scotia or Oregon.   The supplier buys based on grade and cost delivered to his yard.  The bank only cares if the finished home appraises high enough to cover the mortgage.   All that takes time to work through the supply chain.   Your price for logs today wasn't just based on what the mill got for rough lumber yesterday.   It's based on a whole series of past events and best estimates for the future.
Socialism is people pretending to work while the government pretends to pay them.  Mike Huckabee

Ed_K

 "You Can't fight price" there's always going to be the big boys bringing in 30 loads a day. The little guys will have to get together and get laws past where they can sell direct and NOT have to pay $2500. a yr for a stamp.
Ed K

Dave Shepard

Quote from: kiko on March 01, 2021, 09:09:25 PM
The logger is the only one that does not get to decide the value of their product.  
Or the dairy farmer.
Wood-Mizer LT40HDD51-WR Wireless, Kubota L48, Honda Rincon 650, TJ208 G-S, and a 60"LogRite!

quilbilly

To the idea that we park our stuff, no way. Gotta have a good sized nest egg first. Second you have gotta have some power over the mill, which we don't. For reasons that have been discussed in other threads, PNW is almost all industrial or state timberland which means production will never be cut off. We produce 1-2 per day most times. The nearest mills are SPI and Interfor, they just laugh at small guys not giving them wood. SPI mill takes 250+ per 8 hour shift. When we called for a PO they said they couldn't take any more wood for two months. 
.
.
As for market dynamics, what you say is true but doesn't change the facts that mills are making money hand over fist since about July out here and log prices have not gone up even close to the same. It's not that they couldn't go up, it's that they don't have to. There is only 1 middle man between my bros company and us in most, but not all, cases. I know what his lumberyard buys lumber from the mill for and what we sell the logs to the exact same mill for. It's pretty simple math to come up with the difference. 
a man is strongest on his knees

mike_belben

Not being able to say no is the universal result of debt financed operations.  In business and in our private lives.  


I didnt claim that loggers would stop or could stop.  I only stated the prices will be set by the mill until the loggers park it.  If they never do, price never rises.  Very simple. 
Praise The Lord

curved-wood

Part of the equation is that people are buying it even at those high  prices. According to a big bank report, since the beginning of the covid , Canadians have increased their savings by 100 billions of dollars !!!  So there are enough buyers to support the price. But that is not solving the logger share

Firewoodjoe

This is one reason I'm cutting for mills. If you can't beat them join them🤷🏼‍♂️ 

PoginyHill

Echoing what others have mentioned, there are really two different markets at play. And they operate somewhat independently. One for logs and one for the finished product. I've seen it go the other way too: when mills are barely scraping by or operate at a negative margin, they cannot simply opt to pay less for logs if they want to continue to operate. From my seat, log prices have remained rather consistent during good times and bad times for the finished product.
Kubota M7060 & B2401, Metavic log trailer, Cat E70B, Cat D5C, 750 Grizzly ATV, Wallenstein FX110, 84" Landpride rotary hog, Classic Edge 750, Stihl 170, 261, 462

Trackerbuddy

Everyone up and down the supply chain knows things are looking good for Mills.  Even people outside the industry know the facts. Lumber is trading above $1000/Mbf yet SYP sells for $24/ton virtually the same as the $23/ton it sold for in 2012

https://www.wsj.com/articles/lumber-prices-are-soaring-tree-growers-miserable-11614177282?mod=hp_lead_pos5


Ed_K

 A month ago spf on the stock market was $980. this morning it's running $836.10 . So it's starting to come back down. The lowest back last late spring got down to $230. Somebody has figured out the run is over, hopefully it doesn't just crash like the housing bubble.
Ed K

WV Sawmiller

EHP,

   I will vary from many others here. Are you making decent wages now? If so, keep doing what you are doing and don't worry about what other people make off the product you provide. They have expenses and stresses you don't have and probably don't want. There are millionaires all over the world I admire but I have no desire to live their lifestyle. They take risks I will not. They work hours I don't want to do. They worry about things I don't. They treat people in ways I won't do. I don't have the personality for those things.

    If you are not making a decent return on your time and investments you will either have to cut costs, work more efficiently, raise your prices or change careers. 

   All my life I have seen others "advising" other people to demand more money or go on strike or refuse to sell except for higher prices. More often than not the person being advised ended up out of work or losing money while his "advisors" went merrily along their way. 
Howard Green
WM LT35HDG25(2015) , 2011 4WD F150 Ford Lariat PU, Kawasaki 650 ATV, Stihl 440 Chainsaw, homemade logging arch (w/custom built rear log dolly), JD 750 w/4' wide Bushhog brand FEL

Dad always said "You can shear a sheep a bunch of times but you can only skin him once

PoginyHill

Quote from: WV Sawmiller on March 03, 2021, 10:51:52 AMI will vary from many others here. Are you making decent wages now? If so, keep doing what you are doing and don't worry about what other people make off the product you provide.
Great perspective. Reminds me of the parable of the vineyard workers in Matthew chapter 20.
Kubota M7060 & B2401, Metavic log trailer, Cat E70B, Cat D5C, 750 Grizzly ATV, Wallenstein FX110, 84" Landpride rotary hog, Classic Edge 750, Stihl 170, 261, 462

moodnacreek

Quote from: mike_belben on March 01, 2021, 09:48:59 PM
Quote from: quilbilly on March 01, 2021, 09:17:49 PMDF is going for more than twice what's paid, it's gone up every week since October at the lumberyard but we have been getting paid the same for months.
And until loggers quit bringing it in the price will remain low.


Its the same exact story with truckers, brokers and shippers.  Everyone takes their profits when they can, because they can.  


Call the mills you sell to and tell them youre parking it until they spread some of that gravy.  Thats the only way to get a raise.. For lots of loggers to hang it up and leave the mill out to dry.  If they want wood for a pittance let them go cut it themselves.
Well there you have it, nobody sticks together. I'm not big on union's but that's how it would start.

Cedarman

12 to 15 years ago we sawed 95% commodity items.  Margins small, always fight for logs. In about 4 months I was shut off and had to market my wood like crazy.  Internet came along and any customer wanting cedar could find  me quickly.
I doubled my prices at that time and keep raising every few years. Very seldom told no. More money less stress, and plenty of logs.  Bottle neck now is finding labor.
My point is that if you are selling a commodity, prices are dictated to you, if you are selling custom work, you get to decide prices.
What I get out of our lumber does not determine what I pay for logs.  What other mills pay for logs determines what I must pay for logs.
Work on the things you can control. Be as efficient as possible, research all areas of sales.  Build relationships with buyers. The logging business and sawmill business is much more that cutting trees, hauling to mills and making lumber.
Do not begrudge the mills making money.  If they were losing money would you offer to sell for less to help them out.
I am in the pink when sawing cedar.

dustintheblood

"If they were losing money would you offer to sell for less to help them out"

It's a cyclical industry - we all know that.  If you wanna be part of the ups, better buckle up to be part of the downs.
Case 75C, Case 1494, RangeRoad RR10T36, Igland 4001, Hardy 1400ST, WM LT40HD, WM Edger, ICS DH Kiln

moodnacreek

Haleiwa, that was quite a post.  May I ad this: When mills don't have quite enough of some item they will raise the price they will pay [for that item] to get enough to make a run and then drop [the price] right back down. I only figured this out when I caught myself doing it.

quilbilly

I don't think anyone is begrudging the mills making money, it's more that the sentiment of a rising tide raises all boats doesn't ring true in this situation, where I am the competition is so fierce between loggers that people are logging for less than what my friends company did 20 years ago. I would be perfectly happy riding the ups and downs with the mill, we in fact try to work on a percentage as much as possible. Fair for us and the landowner, but the mill isn't involved in that except for initial pricing. 

Where we are we absolutely catch the ride down, always. They will not honor the purchase order, cut off wood at the drop of a hat, etc. It might take a 3 month lag for us to catch the up in prices but a 3 day lag for us to catch the down. 
a man is strongest on his knees

Hilltop366

A article I heard on the radio may apply here to part of the equation, it was talking about the long term effects of automation in manufacturing and the direct correlation between automation and income disparity. The more automation the more income rises to the top.

In logging could it be that automation has increased production and decreased cost per unit for harvesting. Doing more for less creating a flat in log prices?

barbender

I don't know if I'm repeating myself, but there's too many loggers. It's as simple as that. And many of them are willing to run a million $ plus in equipment to make a $40,000 personal income. We are way heavy on the supply side up here,  and either some folks will have to cash in their chips, or some new wood consuming mills will have to start up, before it ever gets better. 
Too many irons in the fire

Firewoodjoe

I feel like everything is that way now. Spend more to make the same. I know lots of loggers. Most have the buy millions to make a wage attitude. What about dairy farms. Lots around here too. Used to be 100 head family farm now it's 1000s of head. Semi trailers rather than a bulk tank. But the mills are that way too. One down the rd from me was a mom and pop start up. Now it's computerized thousands of feet per day. Most hardwood mills around her saw 50,000 a day. Now on another note I have people calling me to cut there oversize trees. That's because there million dollar equipment can't or at least save fiber. And, in turn I charge accordingly 😁. Am i the bad guy now?  There's no equal no matter what we do. The scale has to have a heavy side to make the world go round. That's the way I see it anyways. 

quilbilly

It probably depends on region. We have way fewer loggers than we used to, my whole town used to be nothing but loggers and oystermen. Mechanization has definitely run people out of jobs, specifically the buncher and processor. 

However overall volume of wood cut has gone way down as well, and in turn the amount of mills. Basically more mills and more private timber would help the most, smaller state sales would also help, if you look at the bids on our state wood you'll see very little competition. 2 reasons, only a few mills you can sell to with the export restrictions and they're often sales in the millions so it's hard for small and medium outfits to come up with money. The industrial timber side of things has hurt also, they cut on rotation and shareholder dollars and you can guess who sets the rotation and who wins on how much timber needs to be cut in a down market. Gotta keep them shareholders happy. REIT killed everything. 

One way folks where I live used to make money was federal sales. With the forest circus all tied up though that has gone down the drain as well and the resulting mills with it. The state and feds are the largest landowners on the eastside of the olympic peninsula.
a man is strongest on his knees

WV Sawmiller

Firewoodjoe,

   Bad guy? I'd say no. You have found and are filling a niche market and supply and demand will determine the pricing. If you are charging too much people won't buy your service. If you can't keep up with your backlog you might consider raising your prices or expanding with more equipment or more help if you want to chase those extra jobs you may be missing now. Or not worry about them if you are happy now. Stay safe.

   BTW - when I hear somebody say "he charged me too much" IMHO that means someone either charged more than agreed upon or did not provide the material or service he promised. If someone else would have done the job or provided the material cheaper does not mean you  were overcharged.
Howard Green
WM LT35HDG25(2015) , 2011 4WD F150 Ford Lariat PU, Kawasaki 650 ATV, Stihl 440 Chainsaw, homemade logging arch (w/custom built rear log dolly), JD 750 w/4' wide Bushhog brand FEL

Dad always said "You can shear a sheep a bunch of times but you can only skin him once

dustintheblood

"run a million $ plus in equipment to make a $40,000 personal income"

Now that's the downside to automation/mechanization.  That's a boatload of risk for not much return. 

Folks, I don't have the answers.  I imagine 40 years ago these same questions were being asked around a table in the local coffee shop.

For now, I keep risk low (been there, done risk), do the right thing in the forest (always have even when I didn't have two dimes to rub together), and enjoy what I do (even though it's hard as heck each day).
Case 75C, Case 1494, RangeRoad RR10T36, Igland 4001, Hardy 1400ST, WM LT40HD, WM Edger, ICS DH Kiln

dustintheblood

"If someone else would have done the job or provided the material cheaper does not mean you  were overcharged"

Ahhh, the "race to the bottom" as I say.  I have not, and will not, be the cheapest in town.  No way, no how. 

Get what you pay for - nuff said.
Case 75C, Case 1494, RangeRoad RR10T36, Igland 4001, Hardy 1400ST, WM LT40HD, WM Edger, ICS DH Kiln

BAN

Keeping up with the the next guy has put guys into so much debt that they are stuck working cheap for the mill or timber companies around here.  We are small and haven't really had to look for work in years but when a load of Ponderosa pine is worth $1400 gross and have to haul it 60 miles there isn't much leftover.  I've gotten disgusted and have started being more diverse doing excavating, storm trees, and fighting fire. Its the only way I can pay the guys a good wage. 

moodnacreek

Quote from: BAN on March 04, 2021, 12:22:26 AM
Keeping up with the the next guy has put guys into so much debt that they are stuck working cheap for the mill or timber companies around here.  We are small and haven't really had to look for work in years but when a load of Ponderosa pine is worth $1400 gross and have to haul it 60 miles there isn't much leftover.  I've gotten disgusted and have started being more diverse doing excavating, storm trees, and fighting fire. Its the only way I can pay the guys a good wage    
Price taker vs. price setter.  

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