# Rates for custom milling

An extremely detailed look at different systems of charging for custom milling. May 30, 2001

Question
I just finished building a bandmill, and I am already getting requests to mill logs. What are the going rates for cutting lumber? Should I be charging by the hour, the linear foot, square foot or board foot?

Forum Responses
Small-timers around here charge me about 15 cents a board foot to saw. I like that because I know how much it will cost for a certain amount of material. Some people work by the hour, and as a consumer I have seen a tendency to not work as diligently as they would otherwise. It's usually a trade. Work too fast, your quality suffers; work too slow, your profitability suffers.

Check the local market and then do a job or two based on a flat rate per foot. Keep track of your time and expenses to compare what you would have charged per hour and see if they are close. Then, if a customer wants you to mill for a flat rate, you can adjust that number up (or down), if necessary, to equal what you figure for the hourly cost.

I have a formula which works for me.

When a customer has a number of logs which are required to be boards, the site is good and there are no complications, I charge £4 per board (that's about \$5), up to 200mm x 100mmx 6 m. Over that, it's £6 (about \$7.50) per board.

I find that any discussion on the length is just a bun fight. So at the end of the cut, no matter what length, the client and I both count the ends and multiply. It means that the clients have a reasonable idea of the total cost and they can compare it to the cost of buying timber at the Co-op. At this rate, compared to even fairly low value construction timber, producing a board using my service costs 1/3 to 1/4 of the price.

Where there are any complications or special requirements, I charge my customers £65 per hour (about \$80). This includes Value Added Tax (VAT). If there is a large volume of timber to cut, it's by volume and, again, it's £65 per cubic meter.

I was thinking .15 to .25 bf, depending on what is sawed. Around .15 if the customer wants softwood 2x's. Up around .25 if they want hardwood 4/4, or somewhere in between depending on whatever.

I sawed some pine for my first customer last week, at .12 bf, but he was right here taking boards off the mill for me. That's worth something!

Here in the commonwealth, I charge 50 - 60 cents per bd ft plus extra for handling, foreign objects, muddy logs, etc. I'm a big proponent of giving them good value--so far I've been getting callbacks. They're getting excellent lumber for a fraction of retail, plus there's big emotional value on urban trees.

Too begin with, rates vary by location.

I charge \$35/hr + \$.10/bf (plus some travel and blade cost, if I ruin a blade due to foreign objects, mud, etc.).

When I was setting up my mill, I found that peoples' log piles really varied. Some people have the logs in a nice stack and I just pull in and start milling, and others require quite a bit more work, like moving logs around and such. One of the biggest variations is in log size. It takes me almost as long to cut a 12' log as it does an 8', so just charging by bf would hurt me if they are all shorter logs. Same with diameter--a log that yields 100bf takes almost as long as a log that yields 200bf. I have gotten pretty good at estimating costs for the customer.

Some customers also have small loaders that they can use to help get the logs on the machine quicker. I expect the customer to take the boards and slabs off the mill (otherwise I charge to bring someone along to do it).

I like the combo of hourly and bf rates, as they create a good incentive for both of us to work quickly and produce as much wood as possible.

The only exception is when cutting large timbers--the bf rate doesn't completely make sense, so I adjust it.

Here in central PA, I charge by the hour. Right now I'm at \$30/hr. I think I'm going to \$35-\$40/hr in the near future. I used to cut by the foot. That was okay when the logs were straight and good sized. Small and crooked logs take too long for the amount of lumber you get. By the hour is fair to the sawyer and the customer. At \$30/hr it usually works out to 12-15 cents/BF. My mill is stationary, so I offer hauling of logs and/or lumber for my customers. I get all the custom work I want, with many return customers and I've never had to advertise. I've found that quality work is more important than cheap work.

As a customer, I have paid from \$0.12/bdft to \$35.00/hr. Both methods work, and now with the purchase of my own mill, I will use an hourly rate of \$35-40 on their lot and \$30-35 if they bring the logs here.

Now all of this can go out the window if you cut on shares. That way, the landowner feels like he got your services FREE, and you have valuable stock to sell at far greater prices than you could have ever charged them.

Also, straight dimensional framing lumber is tough because this is relatively cheap to buy at the lumberyard, so you really have to give them a great deal--either lots of boards fast or a cheap price. Remember, they can sell their logs off and take the cash and run, but they called you.

Do any of you relate the end product cost to the retail purchase cost for the customer? For example, "I am saving you \$15 per board." From my experience, the customer gets really mean when you talk hourly rates, because he compares that with what he earns, and he doesn't want you to earn more than him.

I too have a 'cut for timber deal'. We take every second board off the saw. That is very popular. Sometimes a customer will sell us one or two logs in the cut to soften the blow.

My pricing structure is a little more complicated. The basic charge for clean straight logs with a sed of 10" or greater and 8' or longer is .25/bd ft for hardwoods, .20/bd ft. for softwoods. My hourly charge for logs which don't fit the above is \$35. That is also what I charge to debark, split logs, buck logs, etc. If I quartersaw a log, there is an additional charge of .15/bd.ft.

My present mill is stationary, but when I was doing on-site sawing, I charged for mileage for one way. Because of the many variables, I only did an hourly charge on site. That encouraged the customer to have his logs, etc., ready for me and it covered me if he didn't. I also had a minimum charge for the time spent on site.

One of the things that is not mentioned in these discussions is what type of mill and accessories you have. A manual mill cannot saw as much per hour as a fully hydraulic mill.

For example, a Woodmizer Super Hydraulic could saw 400 bd ft per hour and if you charge \$35 per hour, you would be working for 8.75 cents per bd ft. Also, if you charge by the bd ft and edge on the mill, you do not get paid for that time.

I have a Woodmizer Hydraulic with a 33HP diesel and decided to charge \$50 per hour with a 3.5 hr minimum plus blade costs if necessary. That way, there are few hassles and I even help stack boards if they need help on long logs.

I charge .28 cents for any lumber, with the exception of one inch thick boards, when I charge .31 cents per bd ft. I have a \$25 minimum set up fee with a dollar per mile one way, extra for overnighters. \$70 per hour if you want. I have charged \$40 per hour for cleaning, bucking, skidding logs--on top of the bd ft price, this encourages the customers to have things ready. I always go out and look before I set the saw up to get small problems fixed. Really dirty logs I'll go half the blade sharpening and \$10 per blade when I hit foreign matter. And \$20 if I ruin the blade. I run a fully hydraulic Woodmizer.

You all work REALLY cheap. Fuel here is £0.70 per liter. I think that is about \$3.50 per gallon. A laborer's wages are £30-£45--that's about \$55--and my insurance is £8,000 per year (\$9,000) and I still think the market forces indicate that I'm undercharging. How are you guys making a living charging half the price?

I'm not sure what was meant by the comment that manual feed equals low volume. I routinely saw 10 cubic meters per day (that's 370 cubic ft). Just the benefits of swing blade, I guess.

It takes nearly as long to set up and saw a 2 meter log as a 6 meter log. I still can't see the sense in tying price to length. Try pricing per board--they will agree just as easy. Count the boards, multiply by 4. The arithmetic is so much easier, for the client too. Simple is good.

Getting the client to agree to meet the saw damage costs is a very important point. Most of the farmer's logs are edge trees, which will at one time or another have been used for fence strainer posts--nails, wire, bolts, even rocks are imbedded.

Prices are a little different on this side of the pond.

A gallon of gas costs me about \$1.55 and I can hire help for about \$15/hr. I don't have special insurance, so no cost there.

I run an all-manual mill and can do between 100-200 bf per hour, depending on the log size and what the customer wants. At \$35/hour labor charge and \$0.10/bf charge, that means a cost to the customer of between about \$0.25/bf to \$0.50/bf. There isn't a lot of competition around my area, so if I had a full hydraulic mill, I would raise my rates. But because of the lower production and lower capital costs, I keep the rate lower. Also, as I gain more experience (only been doing this for a year now), I will raise my rates a bit.

My crack about manual mills was only comparing rates with Woodmizer's manual mill with an average output of 140 bd ft per hour to a Woodmizer super hydraulic with an average output of 419 bd ft per hour. To talk about charge rates without knowing the capacity of the mill is meaningless.

You are right that we do not charge enough and I do not doubt that with your costs, you do not charge enough, either. But we all have to remember we are obligated to provide a service to the customer at a value they can afford and that value will be different for different people and in different places. It is the competition from the other guys that keeps us from charging more.

The only thing that makes sense to me is to work by the hour. If the customer provides the help, they get a benefit. If I work alone, it costs more per board foot. There is always the problem of trying to figure out how many board feet got sawn. Often the wood is taken off to be piled before the job is done. I don't always have to look at a job before I take the mill. And it is so easy to say \$38 per hour over the phone. If they aren't ready, or things aren't organized when I get there, it costs them. \$38 per hour may be a little cheap, but 1500 a week is about what most people get on a \$30,000 investment in this area.

Why no insurance? All that investment, marketing, effort--it comes to nothing if you have an accident and get sued, or worse, can't work.

I don't have insurance because I do milling as a side hobby and not a full-time job.

Competition (a good thing) keeps the prices low, and the Woodmizers of the world market a "buy a mill and get rich" type attitude. I'll wager that within 15 miles of my shop there are some 20-30 portable band mills.

If you are not able to take your time, maintain your equipment and stay current on the technology so you can do good work, why try to eke a living out by working long hours at lower rates?

Insurance is vital! What if a blade shatters when hitting hidden hardware and blinds the landowner's son, who is sitting 20 feet away? I can take chances with myself at the helm all by myself, but if someone is even just watching, I get a bit cautious.

From the original questioner:
I have a manual mill, and the next closest mill is 60 miles away. My customers will be farmers and people cutting down city trees.

I am thinking of charging in the following way:
\$25 setup / job fee (covers maintenance, fuel, etc.)

Pricing will be as follows:
# of boards X length (inches) X width (inches) divided by 144 inches/sq foot X \$0.30 for 1x stock or \$0.40 for 2x, per square foot.

I imagine I would measure the width of the board right after finishing the cut, and write it down on a tally sheet. At the end of the day, do the calculations and determine the charge.

By my calculations, I figure to be making close to \$40 an hour. Or, roughly, \$20 for an average log. That is at a rate of two logs per hour. If I can get the rate to three logs, I would be around \$60 per hour. I don't want to tell the customers I am charging \$40 an hour when they are making around \$10. They probably would turn the log into firewood. This way they feel they are getting value for their money.

I also plan to charge \$20 per blade damaged, and an edging fee of \$0.30 a board edge if I have to remount the boards on the saw.

-or-

I can charge the setup fee and the damage blade fee if needed and take every third or fourth board off the stack. The price of lumber out here in Kansas would easily pay me for my efforts.

Working by the hour can really be a mistake, especially if you're only working for 35 to 50 bucks per hour. Multiply your rate by the time worked and then divide that by the number of bd ft you cut, and if your average is around 2 to 3 thousand bd ft per day, your customer is getting lumber for a lot less than he should per bd ft. That's not fair.

I want to make a fair profit and give the customer excellent lumber for a fair price. I've had some \$1000 dollar days cutting good timber into 4x6 and 2x6 boards. That was an 8-hour day, including travel time. The customer got great wood for .28 cents per bd ft and was very happy. Needless to say, I was very happy also. If I had charged by the hour, my rate being \$70 per hour, that would have been less then \$560 dollars for the same work, including travel. I prefer to cut by the bd ft. It's not that difficult to keep track of what you cut each day and then you know you got paid for your work.

I charge the customer for anything that slows down production and he is educated to this prior to the job.

If you're in this as a hobby or just for the fun of it, do it for free, don't pull the market price down for those of us that want to put kids through college. Be safe!

When someone inquires about milling logs, one of the last things we talk about is price. Half of my customers don't even ask until later. Most people who want logs milled have never had it done before. They're excited about the possibility of acquiring lumber out of trees from their land or logs they were given.

It is a disservice to mill a pile of lumber and walk away. I make sure they understand at least something about proper handling, stickering, and drying of lumber, depending on what type it is. I also look at where they will place it and if they're capable of all the work it takes to handle heavy boards. I will also talk some people out of milling their logs, when I see that this won't fit into their type of lifestyle, with all the mess and work and expense.

I also make sure they all get a copy of Air Drying Lumber, so they can learn for themselves how to do it. I usually supply kiln-dried planed oak or maple stickers. There is another value-added product I sell from my trimmings.

I also run through all the actual costs they are likely to run into. If they want to get it dried, they'll have to haul all the heavy wet lumber across town to the nearest kiln, then haul it somewhere else to machine it into flooring or paneling. All these things add up and people don't think about it. I could sell a lot more milling if I didn't tell them, but by teaching them something about the process and letting them in on the decision-making, they are much happier because they at least understand what is going on.

10 years ago, a mill pulled up to my place to mill my logs and the mill operator didn't ask me much of anything and just started milling. I wanted to know more about how to mill a log. These sawyers, if you can call them that, didn't even tell me that I had a pile of rotted, bacteria-infested, stained, wormy logs. They either didn't care about me and were in it for a buck, or they were ignorant.

If they have a budget, I won't lower my fees, but I work with them to save them as much money as possible. I have even been given a truckload of near-perfect hard maple logs from a well-off couple because I told them straight and talked them out of milling their logs.

I charge \$65 an hour and drive time. 25 bucks a blade, every nail I hit. If the first question someone asks is "how much?", I don't spend a whole lot of time with him or her.

I charge .35 bd. ft., quarter sawing .45 bd. ft.

I charge a straight board foot rate as long as I am sawing, and a per-hour rate for any time I am doing anything besides sawing (cleaning, moving, stacking, setting up again).

That way, I have the incentive to be productive, and the customer has the incentive to keep me busy sawing, not engaged in tedious chores.

As for charging on a by-the-board basis, how about you come and do some milling for me? I want some 4"x14"x42' boards, white oak, say 5 dollars each?

The guys who charge 15 cents or less should reevaluate their costs. By the time you get by blade, fuel, food, transportation, and mill repair funds, there cannot be much left.

In LA, the current stumpage is somewhere in the region of 20 to 25 cents a foot, adjusted for the better recovery of a band mill. The lumber you will mill the customer would only get about 16 to 20 cents a foot for, so if you charge 30 cents a foot to mill it, he now has 46 to 50 cents in each foot, plus 7 to 10 cents a foot logging, if he paid someone. So, total cost of 53 to 60 cents a foot. The last time I checked at the local mega store, any grade construction lumber above "po-boy stud" was bringing between 80 and 110 cents per bf, plus tax! So 86 to 119 cents a foot out the door, and you may still have to pay for delivery if you don't live close. Sounds like the customer is getting a good deal at 30 cents a foot. He is getting lumber for half of what he would get it otherwise. And much of it is probably better grade material.

I got some prices out of the "weekly swap or sell-it guide" we have here in Maine. These prices are as listed in the guide from the major suppliers--they are the lowest prices I found and probably the lowest grade.

Pine 1x3x6: .49 bf in 500 ft quantity
KD econo studs 2x4x8: .22 bf
Dressed hemlock studs 2x4x8 and 2x6x8: .28 bf
A cabinet builder buddy just bought some clear 1x4 Oak, KD and dressed for 4.70 bf.

So, there's no way I could charge .30 bf or higher for milling softwood 2x's, when it can be purchased cheaper than that.

I never compare my prices with the lowest, shortest grades available. That's not what my customers end up with when I leave. The oak is a good example--if I had milled it, they wood have gotten it for .31 cents per foot. For 1x12, pine #3 runs around 1.20 or more per foot and it is not real good wood.

If the logs are low quality, I usually talk the customer out of milling or explain to them what they're going to get. If they still want it and want me to mill it, I do.

Remember, I said "small-timers". They mill at their place so there is no transportation, set up, tear down, etc. They obtain the material and charge me separate for that, so it really doesn't matter to me if they have it hauled in or cut it down from their backyard. 15 cents is not a standard I suggest everyone set, merely a point of comparison. If their cost goes up, so does mine. If my cost goes up, so does my customers'. If they go too high, things can get real slow. I'd rather make a couple percent profit off of many orders than a large percentage from only a few. It would be illegal, I think, here in the US, to "fix" a price on anything (except gasoline, I think, because all the vendors within 50 miles are within 1 or 2 cents of each other) rather than look at the profit margin. If they can turn 10-15% profit "net", that sure beats the current stock market. Bottom line is, I like the quality and, if necessary, I would pay more for it.

In San Luis Obispo, CA, I have a small sawmill/material business. We do approximately \$120,000 a year. I charge \$60 per hour. This works for us for a number of reasons. We have to assume that people can see that we are diligent and have good work ethics. If not, we will lose business. Another reason not to go with board foot on custom milling is the dimensional difficulty. It's easier to cut big stuff than small stuff. Also, the metal issues, dirt and handling issues--it's hard to get it all lined out, money-wise, with the consumer. I tell them it will cost approximately .50 per board foot and that is the target we try for. I warn them about metal and blade costs, etc.

I continually see reference to guys sawing 400 to 500 bd ft an hour with a super hydraulic mizer. I own one (42 hp Kubota with all the bells and whistles and a damn good tail man). We do this full time. Unless you have perfect logs and a customer who wants 2x6 or larger, those figures are greatly overblown. I am a good sawyer and on a good day of 8/4 material sawing, we may get 2000 to 2600 bd ft. With 4/4 sawing somewhere between 1700 and 2400 with good logs. 400 ft an hour is a very rare event. A typical day of average to above average logs and a mixture of 4/4 and 8/4 sawing usually produces around 1900 ft. We work 8 to 9 hours--that works out to about 250 feet an hour for all your efforts. I'll take that every day. Think in terms of real job sites, not ideal situations that rarely arise.

I agree--your numbers are very realistic. That's why charging by the bd ft is so good--you get paid for what you cut, you don't short yourself when you get a big day in and the customer always gets a good deal when you compare to the lumber yard price.

Starts at 25 cents a bd/ft
\$1 a mile, one-way setup fee with a minimum of \$25
\$20 for blades that hit foreign material

Since we run a LT25 (all manual) Woodmizer it wouldn't be fair for the customer to charge by the hour. But we tend to pay more attention to quality instead of quantity.

We did some production sawing and got over 1200 bd ft in a 10 hour day. We prefer sawing for grade and can do about 75 - 100 bd ft an hour, using a backhoe to load logs onto the mill.

Everything is negotiable and subject to conditions.