At what point ................?

[timbco68]

Just musing on how the prices on iron and everything else have gone up over time. At what point does the cost of a new machine exceed the rate of depreciation and become no longer possible for even the big producers. I just can't see how logging can keep on with worn out iron and loggers year after year . This winter, the price of fuel has been a real burden and trucking has gotten out of hand. What are your thoughts?

[BargeMonkey]

 I was watching a video that the next round of "on-road emissions is going to send new trucks thru the roof. The fuel, insurance, lack of help. I think the plan is all set to eventually force the rest of north America just like they did in California, set a certain date and you can't register it, but do it with ALL diesels from a certain date forward. Again the head of the world economic forum said it, "They will own nothing and be happy"  Only loggers left will be company slaves, easier to control and extort taxes from. 

[Firewoodjoe]

Production is all that makes it work. The price of the equipment does work if you can constantly all out produce for 60 months. Yes the machine price has double but it's capability to produce has doubled to. But it's getting hard to do that with all the restrictions, weather, employee problems machine down time the list goes on. As long as there's a want they will keep building bigger better and more expensive. I'd like to know how many new harvesters have been sold in Michigan in the last decade. Loggers didn't spend money like that 30 years ago. Must work for someone. Also around here anyways the guys that are buying new have multiple crews. So I'm guessing the crew that has the new machines don't make any money. Essential the other crews are. 🤷‍♂️

[Firewoodjoe]

Now trucking cost has went way up. Across the board and by a lot. But I'd say mostly for the owner of the truck not as high of percentage for the guy paying. 

[rdobb13]

Like firewoodjoe says, production makes it work. When the money is thin you just have to produce more. It's getting harder locally, the paper mill has been down two weeks and quota on top of that. 

The rising input costs from hydraulic oil to bars and chains leaves no room for error or sometimes as much as bad luck. I have equipment or wood in three different jobs trying to stay in the wheelhouse of what is open at the time. Next week I hope to wrap two of them up. I'm just glad I don't have a lot of payments. 

[Firewoodjoe]

The payment is actually quite easy if you have the wood and a productive operator. Once you mentally get past the dollar amount. What gets you is keeping it trucked and sold and on jobs that allow all of that to happen. It's all possible just have to choose how big a headache you want. Then times like now with tight markets and inflation on parts/oils it can get you in a pinch really quick do to those low error profit margins. 

Also I'm referring to my state. And ctl equipment. But I'm sure it's comparable everywhere. 

[rdobb13]

CTL isn't really common practice in southern Ohio. I have always wanted to watch it first hand in hardwoods. I try and keep it Johnny Cash style...one piece at a time payment wise. I keep getting curious on what a forwarder would do for me. 

I try to stay out of trucking my own but it is getting really hard to do so. Might be something I need to revisit. 

[Firewoodjoe]

Yeah trucking is always on my mind. Always have to be ready to get my own truck just because contractors come and go. I hope it never happens though. I personally think a forwarder would help you southern guys a lot. 8 wheeler with tracks would really help on those wet jobs. 

[nativewolf]

Yes we worked on sites this winter where our main forwarding trail had 3000 tons move down it.  I mean I had mud on the belly pan, cord wood laid in many spots.  However, dragging logs through that would have been, I think, impossible.  It was special mud.  River bottom stuff. 2 forwarder trips and soft spots had opened up 100' across the trail, lots of pulp in there, I think I put 4 loads of pulpwood logs in 1 400' section in February :D.   Forwarder fully tracked..groaned.   Took me 2 days with a very expensive rental hot pressure washer to clean the machines in March.  Moved the tonnage though.  We spent a week fixing that trail with a PC210. 

Anyhow, just about the wettest site muddiest site ever and we still got it done.  When it's just wet and rocky the forwarder footprint is lighter, ruts are much reduced, less work fixing sites.  You could drive around the borders of a hayfield and not really have to worry to much about days of fixing damage.  Hit it with a skidsteer and it would be bushhog ready.  

[Ken]

I started buying new machines in 2014 to increase production, keep employees happy, etc, etc.  The price of new machines are up basically 40% since that time.  All other operating costs are up considerably with the price being paid at the mill gate not keeping up.  I'm really glad that the banks and/or industry does not have me by the short and curlys anymore.  Time to speed up my exit plan as it's not getting any easier.

[timbco68]

This winter was pretty cooperative for not being too cold to work yet  Sappi ,West Fraser and PCA  didn't fill their yards by any means. I'm just wondering if the pulpwood business model for loggers around here has finally hit the wall with all the increased costs with not enough compensation from the mills.

[Firewoodjoe]

Understood. For sure. My mill income has gone up 20-25% in the last four year. Cost have gone up 30-50%. All we can do is sharpen the pencil. Again. I can't just retire at 35🤷‍♂️  Put more hours in🤷‍♂️ 

[Firewoodjoe]

Were the pulp mill quotas wide open? Our pulp mills and another mills. Have went on quota in the last few months.  

[timbco68]

Yeah,  they raised prices 2 weeks ago at West  Fraser  even.

[timbco68]

They raised aspen pulpwood 15 $ more 2 weeks ago

[timbco68]

per cord that is

[Firewoodjoe]

Wow that's interesting. There dropping it here again soon. But they raise sit a few times in the last year. 

[timbco68]

2 weeks ago I talked to the trucker that used to haul for me and he claimed that the Sappi satellite yard over here was 14,000 cord short of being full.

[Firewoodjoe]

That's good for you guys. And 15 a cord is a lot. That alone would pay half our trucking cost. 

[timbco68]

I guess that Sappi in Cloquet burns through 2000 cord per day. Yeah ,per DAY

[Firewoodjoe]

Yeah I can believe that. That's only 100 of our truck loads. There's a pine mill. Sawing lumber here that uses 60 of our loads per day. We have Weyerhaeuser pca and aruco for pulp mills. 

[barbender]

 I think Sappi goes through 2000 cords on a slow day, I've heard they can easily hit 3000 if they want. 

 Sappi is a real cutthroat operation as far as I'm concerned. You can have a contract with them, say 2000 tons a month for instance. You can come in halfway through the month with 1200 tons left on your contract, and they'll just inform your truck that's the last load for the month at the scale shack. So the only purpose for the contract is for them to have enough supply under contract, and they must contract about double what they actually need. The end result is guys try to stuff all of their Sappi wood in there as soon as the contract opens up at the beginning of the month.

 I was told by the guy I work for that the day after the cancelation of the Huber project (that's another subject entirely🤬) was announced, Sappi pulled the fuel surcharge they had been paying. 

 If Sappi didn't get their yard full, good for them as far as I'm concerned. 

[Firewoodjoe]

A lot are pulling the bonuses and word is more is to come. 

[ehp]

for me to buy a new skidder things would have to change here alot, first the amount of wood it would take to pay for a 1/2 million dollar skidder would be hard to keep up as we just donot have the acres of bush here . To many fields , next could I count of the mill taking woods all the time when I have it to go , that might be a maybe as they are having a hard enough time to get wood these days . The tree bylaw would have to change to where you could run the bigger machines cause as of right now that is a strong NO . And like I said before the only people I see making the money would be the skidder company and most likely the mill cause they would drop the price cause your producing so much more wood  but you as the skidder owner would just be like the donkey that has the golden carrot hanging just out of your reach in front of you but you keep chasing it 

[JonathanPace]

Trucking costs have skyrocketed recently. Across the board, and by a wide margin.:-\