Sawmills
This group is a discussion for all things related to milling logs into lumber.
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Economics of milling for money
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Economics of milling for money
I figured I’d start a discussion on milling for money. As a background, I’ve been a small sawmill owner since 2017, I have a mind for math and processes and made a career out of creating projection and management software system mostly for poultry industry. Doing cost quoting on larger scale software projects and creating projection and estimation systems gave me a good head for figuring out basic business models and plans.
I can fill this up with a lot of estimates and figures and I may just do that later on but I figured I’d give a summary here for anyone thinking of getting a mill or curious if you can make a business out of it.
It depends.
There’s a lot of things to take into account to give a proper answer but basically you will not compete with home depot is the short answer. That may sometime change, there was a massive cost hike in lumber a few years ago that made it competitive to mill wood to compete with home depot but that didn’t last too long and its rare.
If you want to make money milling it needs to either be big wood (long 6×6 or custom wood) or 2x8x10ft+ length boards or you need to do speciality wood, cedar or hardwoods that are much higher in cost.
So the biggest question about if you can mill for money is: do you have a source of valuable wood that can be profitable. This would mean either large diameter softwoods or specialty hardwood species.
The next question you need to ask is do you have a market. If you, like myself, live 100km from any large population center then you have challenges to surmount, finding and providing to your market might require transportation of your products and a location closer to your clients to sell.
Anyone can make a go at things if you have the chutzpah to do it but you still have to overcome those challenges.
My personal calculations for time and money and equipment payoff and a VERY modest wage (by my local canadian inflationfest standards) of $20/hr means, at the speed I mill, of a break even cost of $1.49/bf. Thats because I consistently do about 168bf/hr for milling. the problem is that you’re only milling about 1/2 the time if you’re harvesting the wood and not all the time is spent milling, there’s transportation, stacking, maintenance and so forth.
If you’re selling your milling time to someone else and they’re all setup for you to just roll on the logs and go then its a bit different but you still need to charge at about a minimum $60/hr. You have to account for your travel time, your fuel, your mill fuel, your mill blades, mill maintenance and mill replacement cost over x amount of hours of use (to pay itself off). Every about 2 hours of blade milling time you should be swapping your blade, and trust me that really needs to be done and if you do it regularly then you can sharpen and maintain those blades longer but thats still a hefty expense, either in time or equipment to maintain those blades or in replacement cost. At 168bf/hr thats about 14x 2x6x12, they’re going for $10 at the nearest home depot. So thats $140 right? for $60hr charge for milling time? Except these boards aren’t kiln dried, aren’t dimensioned and planed precisely so are they worth the same as a dried planed board with consistent dimensions? What I mean by that is that when you mill pine and spruce, all the larger knots, especially as your blade gets duller, tend to pull your bandsaw blade up and down and not give perfectly flat cuts, for many things its immaterial but if you’re doing final wall studs then you might need to run them through a jointer and especially if you’re doing any finer finishing work.
In addition these boards aren’t graded and stamped, in some areas this can be an issue for construction with local inspectors and the like. Why would you value the board at the same prices as a graded and stamped, kiln dried and planed and dimensioned board? So maybe we drop the real value of those boards from $140 to $100, rough milled wood isn’t quite the same value as finished after all. The customer is still ahead $40 though per hour right? Except where did he get the wood from? Did he go out and do backbreaking labor to get all the wood in a good setup? Or did you show up and the logs are all laying on the ground. See to get a good milling speed you need either a loader or method to put the logs onto the mill or a log deck setup at the right height so you can just roll your logs into place and mill away. If you’re winching logs up a ramp onto your mill you’re going to slow that 14 boards per hour WAY down to probably 10 or less. So basically its really only worth it for that customer to bother hiring you if he’s got this wood down for his own reasons and needs to do something productive with it anyways.
The only real exception to that is once again, specialty woods, say he has a massive maple to do, or cedar, or he has an enormous log and wants custom slabs out of it, or needs a 16′ long 4×8.
But this is a smaller market. Except for someone that hasn’t really done the math, or someone with special wood or plans for large size lumber, there isn’t a huge demand for custom milling if its just attempting to save the dollars it would cost to go to home depot.
For those interested in more specifics numerically I have that stuff all down in spreadsheets and could crank out more numbers.
All of this being said. If you have your own wood and you are time rich, a mill is a great investment, you have autonomy, the ability to construct as you will when you will. You can always come up with more projects, it lets you manage the wood on your land in a useful manner. If you’re into finer carpentry or building products out of wood, the mill and the wood it provides just removes another market level of cost to your creations and you value add your products saving and making more profit for every level you skip.
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5 Replies
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Level 2: Pulpwood
I have been wondering about that myself. I do a lot of intermediate thinnings lately, and I feel horrible whenever I have to remove small blackwalnuts because they are either to close and competing with each other, or they are not in the best health to last until the final harvest. I have been thinking lately of starting a website for my business and would like to include a section that allows people to place orders for those smaller specialty woods I might come across in the forest (like musclewood, dogwood, small black walnuts, honeylocusts, etc.) and make small sales with those specialty woods as I am harvesting instead of just turning them all into firewood. Any thoughts? Does anyone else have experience with how to connect to local wood workers to sell directly to them with raw logs of specific sizes and lengths?
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Level 2: Pulpwood
If you don’t have a mill yourself and aren’t necessarily planning on getting one, you might want to check and target anyone in the area advertising milling. They’d probably be prime targets for selling raw logs to, and from personal experience, being able to get your hands on some nice hardwoods definitely opens up their options to advertise and sell some quality woods, and they may already have clients asking for some specialty wood.
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Level 2: Pulpwood
That is a great idea! thank you 🙂
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Level 1: Seedling
Great write up Sean. I have found some success with milling redwood decking and fencing materials for my own use and occasional sale. I run a Lucas 8-30 and cut mostly 12ft+ 2x & 4x material. Retail price is $3-4/bf in my neck of the woods and I am able to source a lot of logs from storm salvage or residential tree work. I will also hire out for mobile milling and sometimes come back with extra wood. Even with the high price of redwood I need to be cutting big logs and big beams to be profitable. 16″ logs are the minimum for it to be worthwhile,
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Level 2: Pulpwood
Kip,
Yea I have a minimum size for people here of 14″ to be worth milling. I do smaller myself just for personal use because I have more time than money for that sort of thing, but its not worth doing anything smaller.
The redwood sounds wonderful, I have wood envy haha. It gets cold enough where we are that sometimes it will even kill cedar so we don’t have very much cedar here and its almost all exclusively pine and fir. Its fine for cheap construction wood and crafts but I really wish I had more species here for variety and some hardwoods for certain projects.
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