Question
We traditionally purchase FAS lumber only to produce our product. I have outlets for lower grade as well but the majority of what we manufacture is long length red oak mouldings. We've been considering the purchase of a bandmill in order to reduce cost but other mill owners have cautioned me as to the availability of logs. If I offered a premium for butt logs only, would I get predominately FAS material? I will only need to saw around 2,000 bdft. per day.
Forum Responses
(Sawing and Drying Forum)
From contributor A:
How much product do you need a day? If you saw 2,000 bdft you may at best get only 1,000 bdft of product. And part of that may not be best for your application. If you bought a 20" 12' veneer log you may produce 100 bdft of fas lumber and some of it will be 12" wide. You will have a 64 bdft core of 2C or worst and some 1C. But you will pay $1.50 to $2.00 bdft for the log. A few logs of this type may produce 150 bdft of FAS but with sawing cost included you would have $2.25 per bdft in green product. Now the problem will be the 75 bdft or so of low grade that you also have $2.25 bdft which is selling for less then $600 mbdft right now.
Here you can buy good butt cuts that do not go veneer for $600 to $800 mbdft and get 40% high end product. But if you needed to buy just them logs the cost would go up because they would get less for the rest of the log since you have taken the cream of the load. Other mills need them as well.
So if you are getting 40% product and need 2 mbdft a day then you will have to saw and move 5,000 bdft a day to reach your goal (about 30 tons of logs). Can you stand to lose $0.55 or so per bdft on the other 3,000 bdft to make what you want? Now the dollars will vary by region but for the most part the rest will remain very close to form.
Your idea of making a tie (oftentimes 7"x9") is a good way to avoid lower grade lumber, in part, but the centers of a tie must be solid and some butt logs may fail in this regard. As our U.S. energy crisis continues, we will see rail transportation grow and this means increased demand for wood ties with increasing prices as well.
(Note: Most of the No.1 Common will yield very well for your moldings. In fact, I would encourage you to check the yields when buying No.1 Common from a good lumber company as your yields might drop 11 percentage points but the price will drop 40% or more, compared to FAS. You need a good lumber company, as you want to make sure that the best No.1 Common is not pulled out and sold to someone else, so you only get the lower grade No.1 Common. There is also the "net" and "gross" BF issue for some mills).
Nevertheless, you will find that sawing your own lumber, if you have a good market for all grades, will be attractive financially. However, the management and operation of a sawmill is quite a bit different from managing and running a molding operation. For example: Loggers like to get paid promptly (not 30 days), employees may not appear every morning, bad weather can limit production, breakdowns can occur even with good maintenance, the sawing operation is fairly "dirty" with about 40% of the log volume being sawdust and bark, and green lumber cannot be stored for more than a few days before quality loss can occur in warm weather. All in all, it is rare to see a hardwood sawing operation tied in closely to a secondary manufacturing operation.
I have a customer who makes ash rocking chairs. For a long time he was buying ash 2x sawn through and through log run for $500 mbdft. One day he showed up to get a load and had a flat tire on the trailer and we had to wait while it was fixed before loading. So we got to talking. He was taking the 2x stock and ripping it down on a band resaw so that he could produce 5/4 qsawn boards for the rockers of the chairs. The rest he used for the backs and seats. Some loads he said that he did not get enough rocker stock from the logs. After our talk he buys 7/8" thick flat sawn and 5/4 qsawn and even though he pays $200 mbdft more he makes more chairs for the same money. Never hurts to ask.
If you do get a sawmill, make sure you run it under a different company than your molding company. Have considered a lower grade product, such as kiln stickers for your lower grade pieces? The yield tables are for 1-1/8 green thickness. Thinner lumber will have lower overrun as there is more sawdust. I would guess that overrun would drop by 12% for 5/8 thickness.
Yes you may gain a board or two in the process but on most logs it will be in the low grade area of the log. Over run is a very miss stated term. Like with a 12" 8' log it scales 32 bdft and even with a circle mill I can get 50 bdft. With my band mill I can squeeze out 55 or maybe even 60 bdft, but the FAS count will be the same either way. Yes you may produce a bit more then scale and a bit more than a circle mill if you get more then 5 cuts on a face. But it will be in the lower grades of the log when dealing with hardwoods. In SYP you get about the same price so it does not hurt when you gain that board in the middle of the log.
Most of the time the over run between a circle mill and a band mill cutting all 18 inch 8' logs will be at 20% given both have good sawyers. But a band mill given the same log will produce 25% to maybe even 30% over Doyle scale. Given that size log I most often produce 95 bdft on a circle mill taking a 7x9 tie out. With the bandmill I will not be happy with anything less the 120 bdft from the same log. So I make at least 22 bdft above the scale and 25 bdft above the circle mill. There is no way to take a 100 bdft log and saw out 200 bdft of lumber which is to say you have a 100% over run. All mills should beat the Doyle scale by at least 5 to 10% average and a band can add another 10 to 15% to that. After that things should be called into question.
Perhaps you are aware that Select and FAS1Face is really No.1 common lumber that is sold at FAS prices. That is, the worst side of the lumber grades No.1 Common for Select, FAS-1 Face and No.1 Common. So, for many products, the yields of product from Select and FAS 1-Face are the same or very close to Yields from No.1 common. It is very common for mills to put FAS and Selects and FAS 1-Face together.
Perhaps you are aware that Select and FAS1Face is really No.1 common lumber that is sold at FAS prices. That is, the worst side of the lumber grades No.1 Common for Select, FAS-1 Face and No.1 Common. So, for many products, the yields of product from Select and FAS 1-Face are the same or very close to yields from No.1 common. It is very common for mills to put FAS and Selects and FAS 1-Face together.
Keep records of each log and what the yield is and you will soon find out if this is a worthwhile and profitable idea. My hunch is that all the hassle of getting good logs, owning and running a mill and then selling off the low grade will be more of a headache that a profit center for you. Note that what species of log you are sawing has a big difference on yield. Not all prime butt logs are going to open up the same. A nice northern red oak butt log will saw out plenty of clear material, but do you know what to look for concerning mineral in the logs? Cherry is far less reliable, and white oak is extremely variable. If you are making poplar moldings you are way more ahead buying the lumber already sawed.
In some aspects, it seems like a sawmill makes more sense for my operation since I already have the market. I don't have to sit on material and guess where it's going to go. It's anybody's guess as to what's going to happen to our economy within the next couple of years. I feel more comfortable gearing up in such a way that it doesn't necessarily take large (low margin) volume to stay in business. The only way to accomplish this is to reduce material cost as much as possible by controlling every process from log to finished product.
I can run all of the low grade into flooring. A state of the art fingerjoint system is very expensive and the older Industrial finger joint lines are too labor intensive to consider. I still think 5/8" boards will yield more over run even though more cuts are being made. Yes there will be more sawdust but there will also be more possible cuts. My product width is only 3/4" so any board wider than 1 1/2" will work as long as it's knot free. I wouldn't be sawing for grade so I wouldn't be counting my 5/8" board as 4/4 material. I'm speaking of actual board footage.
What will you do with the non-lumber waste: about 11% of the log volume is coarse sawdust (too large and too heavy for a normal dust collector); about 8% is bark; about 25% or more is waste wood pieces that are not lumber? What about 40% to 60% of the lumber that is not FAS?
Regarding overrun: If you produce more sawdust, then you cannot have higher overrun (all else staying the same). Overrun is lumber volume (BF) divided by log scale (BF). With more sawdust, there has to be less lumber.
Overrun examples: For a 16" x 12' round log we will produce 99 BF of lumber (9 pieces, 1-3/32" x 11" x 12'), plus a few pieces from the slabs if we saw 4/4. If you saw 5/8", you will produce 14 pieces 5/8" x 11" x 12' which is 154 BF on the 4/4 basis or 96 BF using 5/8" thickness. This is 3% less overrun. If you saw 5/4, you will get 7 pieces of 5/4 (and one piece of 5/8). That is 107 BF. If you saw 8/4, you will get 5 pieces of 8/4 and each is 22 BF for a total of 110 BF.
Do you pay workers comp? What about sawmill insurance - accident, liability, and hazard? Will you need another truck to haul away the below FAS grade material? Will you need another employee, in addition to mill employees to market your below FAS grade lumber? What about storing logs and a sprinkler? What about storing green lumber?
We might sometimes control costs by buying timber at a low cost, but because you say you need veneer quality logs to maximize FAS, you will have to buy logs on the open market. This will be tough, so you will end up paying a premium price for such logs; this will blow your material cost sky high and defeat your efforts.
Your main option for controlling costs is to increase the yield of product from the lumber you currently buy. As mentioned, this means no FAS 1-Face or Select, as these yields will be very close to No.1 Common yields. It also means quality drying is critical. It also means that finding markets for products that do not meet you primary product requirements (pieces shorter than 72", for example) is essential.
Costs can be controlled using No.1 Common instead of FAS. For your product, FAS will yield 55% 6' long pieces and No.1 Common will yield 43% (at about half the cost). If you were able to include 24" pieces and finger joint or make a different product with these shorts, yields would be 72% from FAS and 68% from No.1. In short, you lower the cost of your primary product by using No.1 Common lumber AND also at the same time finding a market for the shorter length pieces and other pieces that are not in the primary product.
You will also find that yield increases perhaps 20% if you use un-edged lumber (but have it graded and pay for it as though it actually were edged). With narrow pieces that you use, thin kerf saws are another option. I think you have heard from several very respected experts in our industry (myself not included even though I agree with them) that have serious doubts that your idea is profitable and workable. There are also some suggestions on how to get some actual numbers for your idea without a capital investment so you can prove to yourself that it will not work.
Gene, your illustration about how more of the log is consumed by sawdust when sawing thinner boards leaves a lot to the imagination. Would thicker boards not put more marketable wood into the waste slab as opposed to a thinner cut? At what point does the loss in kerf out way valuable 5/8" wood ending up in waste slabs? Thinner boards also mean less loss at the edger. As stated before, flooring will consume the lower grades. We have an ultimizer upcut trim saw with crayon sensing cameras.
To be honest, I'm not certain about the availability of logs and I'm not sure that veneer quality logs are the best option. I agree about most of the sawmills closing down because of lack of profit. What they do and what I'm considering are two totally different scenarios.. I would be sawing strictly for my end product. If Louisville slugger made all their bats from outsourced graded 12/4 rw rl kd material, competition would eat them alive! I'm sure you get my point.
Comment from contributor E:
Based on the situation you're describing, I would pursue two angles before making the transition to sawmill. Place accumulation orders with multiple sawmills for 4/4 select only red oak KD (random width x 6-7' as well as 3-5" x random length). You'll pay somewhere between #1C and FAS. In my experience, 95% of your boards will be clear 2 face. Your gang rip operator may gripe a little but for a 5/8" net size, you should pick up some noticeable margin. The second thing is to find a sawmill or concentration yard that will cut to 5/8" for you. If you can commit to some volume, it should be easy to find a company to work with. You should be able to reap added margins through negotiating for KD inventory. I'd exhaust those avenues before going the sawmill route.
