Looking to start a 25,000 to 50,000 MBF per day sawmill

[Southside]

Guys are delivering SYP sawlogs for $30 / ton? Wow. 

[SawyerTed]

Sawlog prices are well above $30 per ton for pine.  $30 per ton is for pulp wood.  A production mill will not survive trying to make framing lumber out of pulpwood logs. 

There aren't many pine tracts around that produce lots of 16" sawlogs within a reasonable distance of our mill.  We wouldn't survive trying to saw pine framing lumber on the quantity of pine sawlogs around this area.  We concentrate sawlogs and sell to other mills. 

[longtime lurker]

At 15000 BF a day: The wravor would be worth a look, also the Mebor and I really like the look of the Resch&3. I have no idea on the prices of these things, just that the equipment has a good rep and appears to be able to do the job. The Select out of Canada also well worth a look, though the general consensus is that they're best regarded as a single cut band rather than a double cut unless you're got a really good saw shop close handy. I don't know if Sanborn are still in business but they do a handy mid sized carriage band mill.

For circles the Kara or Laimet systems will get you there, as will a US style carriage mill like a Hurdle, or any of the others. Plenty of them out there second hand and they're cheap horsepower. An overhead end doggier will do it easier and makes a better board if you know how to use one properly but they like neither low grade nor oversize logs, however in logs they like they're hard to beat. My preference is always for a circle headsaw of some sort: circles can cop a beating and cut deep better and faster than any of the mid sized bandmills, and headsaws are all about cutting deep fast.

Behind that you want a resaw. Circle gangs are fast but not super efficient unless you have state of the art shifting saw designs. You can look at the multi head thin band setups like woodmizer etc, or something like a West Plains 500 system. (If you're already running a mid sized band headsaw the wider band resaw like the west plains makes a lot of sense.)  The West Plains is a castoff from the 25mBF mill that can't compete anymore, but it's still awful effective with a lot of spare capacity in a 15mBF mill. Sash gangs are going the way of the dodo but in the right operation they are a dead set moneymaker and need consideration. A PRP-58 is a lot of bang for your buck if the resource is straight and consistant
You'll also need a single cut resaw circle or band for resawing stuff from the resaw that goes out of grade and needs ripping, plus a board edger.  A lot of efficiency comes from not clogging up the production equipment doing clean up work when it should be busting down cants, but it also needs to be integrated into the line to get the material to and from it effectively.

These are just the big components, it's all the stuff around them that really costs money and that will make you or break you. Debarker at the front if you have band headsaw, all the transfers for sawn materials and waste processing and handling lines... most of which you'll have to custom fabricate to make your machinery choices fit your buildings. Kilns are expensive but pretty much plug and play, and drymill lines to rougher header stage aren't complex. But it all adds up to a lot of coin. Auto stackers and stick placers can be got secondhand and save a lot of  dumb labour on the back end.

Best advice I can give you is to start logging miles looking at sawmilling operations near and far. You're looking for ideas, you're looking for potential suppliers, you're looking for takeover targets, you're looking for joint venture partners. Remember that your goal is to get consistent supply at a fair price, and that setting up your own mill is just one way to do that. As a businessman and a sawmiller I'd give my left ball to have the right guy with what you have -  lump sum cash and a guaranteed outlet - walk in the door. Be open to options is what I'm saying.

One thing I will say is that yanno... if it was easy anyone could do it... applies in this business probably more than any other I know of. Or as I tell guys when they ask about setting up to cut a few boards: be careful you just might like it. It's a tough business and it takes a couple generations (or a lot of startup capital) to build a good one from scratch.

[mike_belben]

theres a few used hurdles for sale in tennessee on fb marketplace.  two in jamestown.  

bestway south up in stony point NC is the pressure treater for all the knoxville region lowes and homedepots.. a pretty insatiable market.  i sure wouldnt try to build my own treating facility based on how much capital is tied up in that operation. 

[Crossroads]

Guys are delivering SYP sawlogs for $30 / ton? Wow.

I can't even get oversized blued pine for that. I tried when a logger called me asking if I was interested in it. Now he doesn't even give me a chance to buy from him. 

[OwenOren]

I run a mill in northern Europe.

We have one of wravor's competitor Slovenian mills which is let's say is "semi" auto - it has a website refering to 28m3/~10MBf (of logs per 8hr shift). We have all the additions to get to supposedly that number (log deck, hydraulics, outfeed conveyor to waste, product and a semi auto stacker) - even when cutting large spruces in large dimensions we can't get to anywhere above 95% of that number quoted at a run rate for more than a couple of hours.

We don't need to get to that number because we run the mill for quality chalet beams, but out of curiosity we have run it as hard as we could before. Still couldn't get near the number quoted for a full shift.

Say we tried to get to 80% of that number consistently - there would always be "something" that would cause a stoppage. Snowfall, delays in log delivery, power outages, mechanical parts needing fedexing. Unlike most on this forum, labour is the least of our issues (reliable, unionised, educated, sober) - they relished the challenge and worked like horses.

Budget

Back of the envelope I'd suggest a budget of more like $5-10mn is needed for this at the low end. That assumes a well prepared site and no auxiliary spending.

I think in your first paragraph you note that pricing Vs cash costs would imply profitability - but the misery of this industry is the capital investment costs to get the point of being able to achieve those cash costs is horrifying. I don't not know of an industry with such a high pre-production capex to in production opex (ex log cost) ratio. Production is cheap, once you have a massive mill with lots of bells and whistles...

My personal experience, as an engineer, accountant and a business owner is that the returns on sawmills are really hard work. The capital investment is huge and the variability in profits due to it being a process industry where your key input and ouput prices are rarely within your control... So all you can do is keep process efficiency and be willing to halt production in bad times.

My advice would be to get a turnkey operation designed and priced by one of the big players for midscale sawmills, from log through to reprocessing. Kara or similar in the Nordics do such things.

I'd be very curious about where this is planned for.

This is really helpful - sorry 1.5mm was just for the equipment, not the land and buildings.
I got quoted a Wravor 1250 w a 750 multi rip and hydraulics , operator cab etc for 600k...seemed like a decent deal. Knowing that you're getting roughly 10k MBF per shift, do you think averaging 15k Is more doable with a Wravor 1250. I was thinking if I went straight to 20" softwoods and ran 6 inch cants after slabbing through the resaw I could get the logs through in 6 or so cuts.

Lastly, the published rate on Wravors website is I think 24k MBF per 8 hour shift -  are you saying that 80% of that is probably more in-line with what to expect...or do you think even that is too aggressive?

I'd say even that is too aggressive. I'm conservative, so I'd aim for my base case production to be at 50% of quoted capacity. The companies just put their max capacity "in theory" on website. Just like woodmizer - I'm yet to meet anyone who can get close to what the LT70 can do (consistently)...the issue is the waste handling and maintenance. 
I guess the best way would be to ask to visit someone using this wravor setup in Europe and see what they get to. I'm sure a lot of polish/Eastern European "commodity lumber" mid-scale mills run these on 3 shifts 24hrs and run them hard as possible with cheap labour.
I'm not a big producer - but my inclination would be to get one of the Finnish made commercial scale ops to quote you a turnkey line. Less labour, less faff. All connected up and ready to turn on. Hewsaw make lines which I see in Sweden for this sort of scale.
I made my mill from curiousity with a non-milling background. I rapidly downscaled my intentions when I researched the market and instead found my niche and we produce c. 1000m3 (400,000bdf) per annum of finished product with a c. 1.5man full time equivalent operation.

[customsawyer]

I've been approached a few times in the last year to year and a half to set up a operation doing the same thing that you are talking about. I've had the guys fly into the little town of Dublin, GA. and come look at my operation and try to hire me to set up theirs. Not a one of them have done anything that I know of. It's not easy to make it all work and you will need good folks in every step of the process. I wish you the best of luck.

[Peter Drouin]

It's a lot of work. And $$$ up front. I think about that when I have 10 of thousands $$ sitting in the yard. Less and fewer loggers. 
Now my lull needs $4,000 in work. {my log mover and lumber]
It will be a week or two to fix, Using the John deer now. Production is cut in half. I have some lifts of lumber I can't lift with John. Or get to. The 1044 will lift 10,000lb. I have loads of logs coming in today too. It will be fun. : : : :
Good luck
 

[slowmiller]

We run a very small, vertically integrated mill in the northeast and frequently drive ourselves crazy thinking about getting bigger and more efficient. It seems to us like there are certain sizes you can be and make things work, smaller and production cost is too high, larger and you get into a whole new set of problems without the production to cover the added cost. Visiting other mills doing a similar thing may help you figure out what size works for your area.

Around here the pine mills seem to shoot for 100 mbf / day and they do it with a headsaw or two (circle or band) feeding a gangsaw or multi head resaw then an unscrambler, optimizing edger, and trimmer, grader, sorter, and stacker. A log scanner / positioner / optimizer is very important in these set ups. These mills run 10" to 24" logs in 12' and 16' lengths. Below 100 mbf a day I dont think you can justify and capital cost.

For the output you need I would be looking at set ups to produce say 50mbf / day to give room for low grade, optimistic production numbers, and break downs. I would look hard at scrag mills and look into finding a 8-14" diameter log resource to feed it (small logs, small defects). The kilns will need to be fired with sawmill waste unless gas is really cheap. Wood waste boilers are really expensive. I would want a minimum of 3, 50 mbf kilns to have a chance of keeping up with the 25 mbf / day output.

Can you do it? Sure but not for the given budget. But I think you have some advantages here that can make up for the over budget on the mill. For example, you will need a grading and trimming line but if you can use the trimmers to precut studs and cut the #3 stock into blocking or upgrade it by trimming it down for things like jack studs then you have a definite advantage compared to the commodity mills. Stable markets for the waste products are huge and a lack of trucking to the panel shop is very helpful.

good luck

[Ron Wenrich]

When I sawed white pine for cabin stock, I could saw the 15-20 Mbf per day.  The size of logs were normally 12" and up.  But, the output was mainly in 6x8 cants with the side cuts in 2" stock.  The clear lumber was kept in 4/4 stock.  1x4 and 1x6 were turned into T&G for paneling.  We would only saw a couple of weeks a year in white pine, mainly due to the limited availability of pine in our area. 

In hardwoods, to get to 15 Mbf, I had to be cutting tulip poplar or long oak into either bridge timbers or switch ties. 

I also worked in a mill that did a consistent 20 Mbf/day on a hand carriage.  But, we were cutting long tulip poplar and heavy thickness to get to that kind of production.  We had no kiln or planing mill.

15 Mbf of logs is about 3 trailerloads per day on a consistent basis.  We had 2-3 logging crews to produce that volume, as there were also veneer logs that came out of that as well as firewood and some pulp.  We had crews that could produce the wood.  We also had 3 truck drivers that would haul that wood, as well as lumber.

We would produce about a truckload of bark every other day, a load of sawdust every other day, and a load of chips every day.  We had a market for everything that came out of the mill.  Nothing on speculation.  Timber was bought mainly from consulting foresters, which means they were paying top dollar on bid sales.

What brought them success?  Every manager was a working manager.  No one sitting in the office.  The owner drove truck, and when cell phones came out, he was on that while he was driving.  The owners also spent 60-70 hrs per week working.  They farmed their maintenance out as well as any other to keep labor costs down.  They had years of producing top quality lumber and veneer logs which resulted in good, solid markets.  They didn't borrow money, but started small and built into the operation by paying in cash.  They had a workforce that worked well together and got the job done without needing to micro manage.  There were also tons of experience in all their workers.

I also did some work for a guy that had all the answers.  He borrowed $6 million to put in a mill that utilized urban logs with a $0 input for logs.  He went bankrupt.  His plan looked good on paper.  He was in a high end market area with few to no mills.  He was going to put in kilns, and sell lumber and make a ton of money.  But, his failure was in unfamiliarity with the business, a workforce that wasn't productive, and the need to micromanage.  He overestimated his selling price and underestimated his production costs. 

I'm not sure where you fit on that spectrum. It seems that you already have a market for the wood you use in construction.   I think if you start out small scale and get some experience producing and using the wood you produce, you would be further ahead than walking into it with little experience in the trade.  If you can't profit by producing your own wood, you won't profit by trying to match market conditions where there is more competition and people with a lot more experience.

[blyons11]

When I sawed white pine for cabin stock, I could saw the 15-20 Mbf per day.  The size of logs were normally 12" and up.  But, the output was mainly in 6x8 cants with the side cuts in 2" stock.  The clear lumber was kept in 4/4 stock.  1x4 and 1x6 were turned into T&G for paneling.  We would only saw a couple of weeks a year in white pine, mainly due to the limited availability of pine in our area.  

In hardwoods, to get to 15 Mbf, I had to be cutting tulip poplar or long oak into either bridge timbers or switch ties.  

I also worked in a mill that did a consistent 20 Mbf/day on a hand carriage.  But, we were cutting long tulip poplar and heavy thickness to get to that kind of production.  We had no kiln or planing mill.

15 Mbf of logs is about 3 trailerloads per day on a consistent basis.  We had 2-3 logging crews to produce that volume, as there were also veneer logs that came out of that as well as firewood and some pulp.  We had crews that could produce the wood.  We also had 3 truck drivers that would haul that wood, as well as lumber.

We would produce about a truckload of bark every other day, a load of sawdust every other day, and a load of chips every day.  We had a market for everything that came out of the mill.  Nothing on speculation.  Timber was bought mainly from consulting foresters, which means they were paying top dollar on bid sales.

What brought them success?  Every manager was a working manager.  No one sitting in the office.  The owner drove truck, and when cell phones came out, he was on that while he was driving.  The owners also spent 60-70 hrs per week working.  They farmed their maintenance out as well as any other to keep labor costs down.  They had years of producing top quality lumber and veneer logs which resulted in good, solid markets.  They didn't borrow money, but started small and built into the operation by paying in cash.  They had a workforce that worked well together and got the job done without needing to micro manage.  There were also tons of experience in all their workers.

I also did some work for a guy that had all the answers.  He borrowed $6 million to put in a mill that utilized urban logs with a $0 input for logs.  He went bankrupt.  His plan looked good on paper.  He was in a high end market area with few to no mills.  He was going to put in kilns, and sell lumber and make a ton of money.  But, his failure was in unfamiliarity with the business, a workforce that wasn't productive, and the need to micromanage.  He overestimated his selling price and underestimated his production costs.  

I'm not sure where you fit on that spectrum. It seems that you already have a market for the wood you use in construction.   I think if you start out small scale and get some experience producing and using the wood you produce, you would be further ahead than walking into it with little experience in the trade.  If you can't profit by producing your own wood, you won't profit by trying to match market conditions where there is more competition and people with a lot more experience.

Thanks for your feedback- Yes I do not have all the answers and am really green in this space so this helps. Knowing more about can make you go bankrupt is way more important than swagging at profit so very well said.
Regarding the micormanagment, you couldn't be more right. This is early on but knowing this a 12 month + project my gameplan is going to be to find the guy to run it and give him a slice of ownership with room for more upside. I've had success with that structure in the past.
I'm starting to gather that 15K MBF per day is much more achievable earlier on than 20K - 50K. I do think the gameplan on not trying to be in retail sales but rather just trying to produce what we're going to use internally has a lot of benefits and makes life way easier. I.E not having to worry about AR and less lag time between purchase and cash flow.
What kind of saw were you using if you don't mind me asking?
Also I'm basing my assumptions on around 250 working days per year with 8 hour shifts - 4 on 1 lunch and 4 on.
Did the mill you operate run more days per year than that? If industry standard is closer to 300 days / weekends etc than my daily output could be a little less.
90% of what I'll need to produce are 2 x 4's & 2 x 6's with half of those as studs and not needing to be #2 or better.
If there was a way to buy logs, contract cut and contract Kiln - I'd much prefer that but don't see that being a reasonable option for current market dynamics. 

[blyons11]

We run a very small, vertically integrated mill in the northeast and frequently drive ourselves crazy thinking about getting bigger and more efficient. It seems to us like there are certain sizes you can be and make things work, smaller and production cost is too high, larger and you get into a whole new set of problems without the production to cover the added cost. Visiting other mills doing a similar thing may help you figure out what size works for your area.

Around here the pine mills seem to shoot for 100 mbf / day and they do it with a headsaw or two (circle or band) feeding a gangsaw or multi head resaw then an unscrambler, optimizing edger, and trimmer, grader, sorter, and stacker. A log scanner / positioner / optimizer is very important in these set ups. These mills run 10" to 24" logs in 12' and 16' lengths. Below 100 mbf a day I dont think you can justify and capital cost.

For the output you need I would be looking at set ups to produce say 50mbf / day to give room for low grade, optimistic production numbers, and break downs. I would look hard at scrag mills and look into finding a 8-14" diameter log resource to feed it (small logs, small defects). The kilns will need to be fired with sawmill waste unless gas is really cheap. Wood waste boilers are really expensive. I would want a minimum of 3, 50 mbf kilns to have a chance of keeping up with the 25 mbf / day output.

Can you do it? Sure but not for the given budget. But I think you have some advantages here that can make up for the over budget on the mill. For example, you will need a grading and trimming line but if you can use the trimmers to precut studs and cut the #3 stock into blocking or upgrade it by trimming it down for things like jack studs then you have a definite advantage compared to the commodity mills. Stable markets for the waste products are huge and a lack of trucking to the panel shop is very helpful.

good luck

It's funny you say that because I originally started looking at scragg mills or chip and saws but it looks like you can't give bigger than 16" diameter for most of the stuff that I see online.
I've talked to a couple consultants who swear that I CANT produce quality 2x4s #2 or better or just regular studs. Is that true? Or do people do that all of the time? If scragg or chip and saw is viable - I would much prefer that route from a cost standpoint. 

[SawyerTed]

Let me start out by saying I'm a crazy entrepreneur and have started multiple successful businesses without industry knowledge...I'm very ignorant in this space but In assessing the current lumber prices, I can not be convinced that timber is being bought, sawn, dried and sold for a cost basis no more than 40 cents per MBF but the market is paying 85-90 cents currently that I believe will be the new norm price going forward after a spike to 1.5-$2 in 2022.

A company like Weyerhauser makes 4.6 billion board feet of structural lumber annually according to their 2020 Annual Report.  Their production is high and margins are low per unit.  When they sell that many board feet at +/- $0.50 a board foot they aren't seeing the $.80 to $.90 plus per board foot that the retailers are getting. 

This video is of Weyerhauser's Mississippi mills.  Look at all the other stuff that is not a head rig sawing lumber.  This is what a small operation trying to saw graded and stamped construction framing lumber is competing against. It is very difficult to be competitive sawing framing lumber when the competition cuts as much lumber in ONE HOUR as you can cut in EIGHT HOURS.
  
https://youtu.be/d27YY0e32Q8 

I think in the end the OP would be better off trying to buy the 1.9 million board feet per year of framing lumber directly from Weyerhauser than make it himself.  Fewer headaches and better protection against the changes in the economy.  The big mistake when you use 7,500 board feet of lumber a day is paying anything near retail for it. 

[Ron Wenrich]

I was running a Morbark 4 headblock automatic 42" opening using hydraulic over electric circle mill.  I also had a veritcal edger and a computerized setworks.  We ran 4 9 hr days and 1 4 hr day.  The 4 hr day was set up so that maintenance could be done without guys working on the weekends.  Lots of preventative maintenance that kept the mill running during the week.

We had a mill foreman that ran the debarker, unloaded logs, loaded trucks, moved lumber piles, and jockeyed trailers.  He also did the Friday maintenance.  I was a contract worker and got paid to saw by the Mbf.  There was one man who marked boards for end trimming, and graded lumber.  He also tended the chipper when needed.  We had 2 guys stacking lumber.  The workday started at 7:00 and the saw stopped at 12:00.  During the 45 min lunch, I got to eat, then get the saw ready for the 12:45-4:00 run.  I got the saw ready for the next day's sawing after 4:00.  There were no breaks.  I geared my sawing to get the most out of labor without wearing them out.  Too cold, they could go in and get warm.  Too hot, we had fans.  But, the speed of sawing was paced not to overwhelm the help.

We didn't have a resaw.  That would have upped production, but then there's more stress on the logging crews, timber buyers and truckers.  Sometimes being big isn't as important as being comfortable. 

I'm not real versed in the softwood end of things.  If you're looking to make 2x4 & 2x6 lumber, why do you want to concentrate on 16" logs?  Seems those stud logs would be cheaper to buy.  A scragg or chip and saw would produce lumber probably quicker than a traditional circle mill carriage. 

[moodnacreek]

Your the man Ron, good post.

[WDH]

Ted,

I worked for Weyerhaeuser and worked on the log supply side on projects at that mill in Magnolia.  Normally ran two shifts per day but at times it ran 3 shifts per day.  Production capacity at three shifts full out was one million bf per day.

The mills at Plymouth, NC and Greenville, NC are similar sized.  They use up to 180 tractor trailer loads of pine logs per day.  

[longtime lurker]

On one of my trips I got a look at Hampton's Willamina operation, back when it was in the world's top ten by volume. I had one of those moments of supreme clarity as I was watching logs suck into the quad; there's no way to compete with that, so don't even try.

Still, as a buyer of pine framing lumber rather than a producer, with freight and distribution costs and everyone making a markup along the way... yeah maybe there's a business case for sawing your own. My business runs on the same principle... I can't match the big guys here on cost of production, but cost of production + freight+ lumber yard margins and I can make a decent living at it.
Logs are the issue, those big guys will outbid you just to make your life hard if they want to, particularly now with demand high.

[Dave Shepard]

I haven't made the call, yet, but I hear ewp is back up. Not only do I have to compete with the export market, but they will take anything that looks like a log, even if it's from the tree services. I'm not paying a premium for barb wire, four nails in the layout of a posted sign, and clothesline pulleys. :-\

[Southside]

Don't forget about ceramic insulators, horse shoes, crescent wrenches, and small children. 

[Dave Shepard]

Ceramic is the worst. You know it's ceramic before you even shut the mill down. 

[mike_belben]

I think in the end the OP would be better off trying to buy the 1.9 million board feet per year of framing lumber directly from Weyerhauser than make it himself.  Fewer headaches and better protection against the changes in the economy.  The big mistake when you use 7,500 board feet of lumber a day is paying anything near retail for it.

That sounds like a much better way IMO.  Idaho timber gets railed in on the spur at nichols street in henderson NC.   Its probably a lot cheaper to get a few moffet trucks and a warehouse building and just be a volume buyer who supplies himself and the other builders.  
Strap only, no tarp lumber is the cheapest open deck freight to have moved. It may seem high when you are paying the bill but as the driver i can tell you few loads paid less than coming out of there. 

[blyons11]

I think in the end the OP would be better off trying to buy the 1.9 million board feet per year of framing lumber directly from Weyerhauser than make it himself.  Fewer headaches and better protection against the changes in the economy.  The big mistake when you use 7,500 board feet of lumber a day is paying anything near retail for it.

That sounds like a much better way IMO.  Idaho timber gets railed in on the spur at nichols street in henderson NC.   Its probably a lot cheaper to get a few moffet trucks and a warehouse building and just be a volume buyer who supplies himself and the other builders.  
Strap only, no tarp lumber is the cheapest open deck freight to have moved. It may seem high when you are paying the bill but as the driver i can tell you few loads paid less than coming out of there.

Yea thats a great idea but I wasn't sure it could save much money...Any idea what this would trade at? Or how to find out? I agee this would be a way easier scenario
I also thought just buying green and planing internally could work, I just have no idea on pricing
It seems like large lumber brokers like weston forest don't provide much of a discount.

[mike_belben]

Become a lumber broker yourself then. Start calling the manufacturers direct.

 You could also spin off a freight brokerage pretty easily to get trucks to move your lumber, with just a one room office and desktop, a broker MC# and a bond.  Its a physically easy job.  Mostly shuffling paper, emailing and lots of short phonecalls with strangers trying to book the cheapest truck.  


The way trucking is i think youd need to be a load broker to get high volume moved.  If you arent a load broker then youre paying retail on trucks hauling the lumber you buy at a terminal. If you are a broker youre getting to buy deckspace on open market trucks sorta wholesale, that are in the zone where your loads are and want to move.   You post a load and the trucks call you.  You set the rate (within reason, and with fluctuation)

If you call a trucking company to move your lumber order, they set the rate.   


This scenario could give you a lot of access to lumber with almost zero invested in physical assets, and the means to make a commission on lumber you sell to others (lumber broker)and commission on transport of that lumber to others(freight broker).  The bulk of cost would be attorney setting up a protection structure or two, and govt filing fees for broker license.   A few young gals in a rented office could easily do this for you m-f.  I say young because its a computer literate, techy, texty sort of job on the freight broker side.  I got loads dispatched by all sorts of soccer moms with a 2nd cel phone.  The ability to speak spanish, russian or hindi are huge plus. 

[stavebuyer]

I think a rail siding would be critical if you lean toward stockpiling. Since you actually are a consumer of the product you also could actually utilize the lumber futures market for the purpose for which it was designed. You could be building the rest of the year with lumber you locked in last month at $500/mbf and not buy a stick more than you need today when the market is much above historical margins. 

We probably will see a "new normal pricing" post Covid inflation bumped base but don't be seduced with pre-covid production costs. What cost you $200 to do last year will be $300-400 this year. I will be shocked if the big players aren't back to sawing at margins that will leave you no incentive to join them before you could possibly get any mill built and operating.

I am familiar with a family-owned local supply house that supplies much of the local wholesale market by unloading railcars. They supply most of the regional independent wholesale market and do a significant volume. 

The other realistic option is to "saw small". Sawing for your own needs at a trailer load a day is a completely different equation. You could never trim the sawing costs to compete with the mega-mill but you could guarantee your own supply at reasonable cost without the price drama.

The mega mill doesn't buy little tracts and while they will outbid you on every available log in Feb., they will have every logger in the state shut off or on a starvation quota after 2 weeks of sunshine in May. Vertical integration could set you apart as the only builder that can guarantee to deliver on time and on budget and builds with better lumber. The "better" being within your control especially from stump to stud. Only uses slower growth short-leaf etc.

 

[WDH]

Random Lengths is a weekly publication that lists the price of structural lumber sold by the mega mills F.O.B mill.   That means freight on board and is the price loaded on a truck or rail car at the producing mill.  It does not include freight.  You can subscribe to it.