Small Scale Forestry Economics

[dberrow]

Hi,

I'm based in South Eastern Ontario, and I bought an ~80 acre property, of which approximately 22 acres is wetland. The property is about an hours drive away from where I live.

The property was farm pasture until approximately 20 years ago and is now populated with an eastern white cedar (EWC) forest, woody shrubs (juniper, buckthorn, prickly ash) and a few acres of sugar maple, beech, and bur and red oak saplings scattered throughout the property. The soil is very shallow and rocky in many areas and is not very productive for agriculture purposes.

I bought the land for recreation (Hunting, Camping, Hiking, Fires, etc.), as I currently live in a large city and wanted a peaceful place to get away to with the family. Recently, I've been thinking about harvesting some EWC and wanted to figure out if it profitable to do this. There are a couple of EWC mills within 50km of the property, who pay $1/bf, delivered to the mill.

This is what I currently have for equipment:

• Hyundai Pallisade - Towing Capacity 5000 lbs
• Single Axle Utility Trailer - 1500 lbs GVWR
• Chainsaws
• Log Tongs
• Choker Chain
• D-Tape
• Logrite Junior Arch

The harevsting process is as follows:

• Drive to Property (1 hr)
• Cut (7) 10+" DBH EWC and limb them (0.5 hrs/tree = 3.5 hrs). I assume (2) 10.25' sawlogs out of 1 tree.
• Move Sawlogs from Woods to Trailer using Log Rite Junior Arch (0.25 hrs/log x 14 logs = 3.5 hrs).
• Drive to EWC Mill (0.5 hrs)
• Unload and get Paid (1 hr)
• Drive Home (0.75 hrs)
• Clean Equipment/Sharpen Chains (0.5 hrs)

Here is my estimate of the economics:
- I assume that each 10.25' EWC log weighs at most, 100 lbs, so trailer is maxed out at around 14 logs.
- Assuming Small End Diameter, Inside Bark = 8", I get an FBM = 21.87 bf/log.
- Gross Revenue for 14 logs @ 21.87 bf/log @ $1/bf = $306.13.
- Total Expenses per trip = ~$46.50 (Chainsaw Gas: $20 (I buy premixed, I could reduce this by mixing own), Vehicle Gas: $25, Fraction of Chainsaw Chains per trip: $1.50).
- Profit/Trip = ~$260
- Total Time per trip = ~11 hrs (8 hrs harvesting trees, 2.5 hrs commuting, 1 hrs unloading and getting paid, 0.5 hrs equipment maintenance)
- Hourly Rate = $23.34/hr

All of this is assuming that nothing breaks (including me!), and there is no downtime, so if I factor in Murphys Law, it will be a lot less, maybe around $20/hr. So my current set up is profitable, and obviously, there are non-financial reasons to be out in the woods, but cutting EWC trees with no heavy equipment is hard physical work.

If I were to scale up (e.g. have a tractor, ATV, bigger trailer, helpers, etc.) I don't think cutting EWC for sale to a mill is viable.

I've done an analysis similar to this one that includes the addition of a portable sawmill and the sale of EWC lumber, and that appears to be much more profitable. I can do another post for that if theres interest.

Do any of you who cut EWC in Southeastern Ontario have any input or ideas on whether its worth it or not?

[barbender]

My experience with logging is, having a day figured out like that ahead of time is a sure fire way to end up extremely frustrated. 

I think in a situation like yours, with minimal equipment and a willingness to put in labor, you'd see the most benefits by having the material sawn on site for your own use. A cabin on the property, maybe? Or have it sawn and sell the lumber? Maybe a small manual mill to produce the lumber yourself?

[dberrow]

Yeah. I think I'm going to do a Woodland Mills HM122 or 126 once I have the funds. I'm planning on building a hunting cabin out there in the next few years, so having some cedar will be useful.

[Ianab]

I'd suggest the commute is going to cost more that you are planning for.  For tax / reimbursement purposes they figure 72 cents (Canadian) per kilometer. That takes all the expenses of owning and operating a vehicle into account.

I'd be looking to saw and build onsite. First a small cabin so you can go to the property for the whole weekend or whatever days you have free. You might not be making cash income that way, but you are adding value / usefulness to the property.

[GAB]

If I was in your situation i would consider buying and setting up on the property a travel trailer to use as a shelter.  Then I would spend my spare time enjoying the property with a small chainsaw in hand just trimming, and if necessary thinning existing trees, and mapping out roads and taking inventory of the trees available for future building projects.  Properly trimming and thinning the existing trees could increase the future value of the stock.  This would not put any coins in your pockets immediately, however it might in the future.
Just a suggestion,
GAB

[Rhodemont]

What you have described is not recreation, it is a lot of work.  Your calculations are way over estimated.  All you will make with this plan is beer money and cheep beer at that.  So many things happen, equipment, your health, life, etc. that will cut into your plan.  I like GAB proposal that you spend time improving the stand and then have it harvested professionally.

[Big_eddy]

Sounds like a lot of work and equipment wear and tear for ~$20 a log.

[taylorsmissbeehaven]

I love a hobby that pays for itself.  I assume you have a regular job here, so this would be a great way to enjoy your property, get some good exercise, and play with some fun toys. A little money once in a while helps with fuel and buys a steak to cook over the fire. If you focus on the financial side of the coin its gonna turn it from being your happy place to a serious work out (my wife calls it "the has to") that could turn you off to the property. If possible focus on enjoying the woods and your family!! JMTC

[Kodiakmac]

I logged white cedar for years.  But, (a) I had a skidder, (b) they were really nice big mature trees and relatively easy to get to, (c) the mill owner came with his tractor and forwarding trailer and picked the logs up, and (d) he paid a premium price for the logs.

I probably wouldn't have started if any of those things weren't in place.

[dberrow]

Thanks for the responses!

I have a regular job, so this would just be a side hustle (if it had worked out to be economically viable). I've updated my numbers for the total cost of ownership of the vehicle, instead of just accounting for gas (using Ianab's suggestion of $0.72/km for the vehicle). I've also added +20% to my time to account for equipment/health failure, mistakes, relaxing, etc.

I also ran the numbers for 10.25' logs with larger average diameters, which returned the following results:

• 8" ($11.22/hr)
• 9" ($16.11/hr)
• 10" ($20.55/hr)
• 11" ($23.72/hr)
• 12" ($24.20/hr)

I think my current setup is really only worth it (to me) financially if I'm only harvesting 11D+ logs (maybe 12"+ DBH trees?).

I think its better to focus on enjoying the woods with my family and spending time improving the stand for now. I have plans for a hunting cabin, so I'm going to focus on that for now. I'm sure I'll revisit harvesting my EWC stands in a few years, but I think a bigger trailer and an ATV are needed before its worth harvesting myself. Also, I'll be looking into getting a small portable sawmill in the next little while.

[Ianab]

I think its better to focus on enjoying the woods with my family and spending time improving the stand for now. I have plans for a hunting cabin, so I'm going to focus on that for now.

I think that's sensible. 

That cedar is only grown as an ornamental here, so i'm not that familiar with it, although I have sawed a small one as part of storm cleanup / salvage. It's very light, not that strong, but it is pretty durable. I see that a common use is roof shingles (light and durable is good). It should work as weatherboards / B&B cladding, and interior wall lining. I guess you could even frame with it for a small structure, full size studs, and plenty of them?

Just thinking about how much of a hunting cabin you could build using mostly the materials on hand?