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Adding Value and ProfitsWood is good. We especially enjoy seeing high quality wood handled by a craftsman. I get to travel around and see all sorts of wood products, for example a shockingly nice birdseye maple end table, world class picture frame moldings, and a friend building a cedar strip guide boat. I myself made a fine curly-maple gunstock. Crafted products like this can go for hundreds of dollars per board foot, and we sell most logs for pennies, or perhaps a dollar or two per board foot. It is rare to go from trees to final retail products, but there is tremendous opportunity for adding value, and profits to wood products. Of course, if it was easy, everyone would be doing it. So, what are the opportunities in front of you? Which ones are you already taking advantage of? And what are the obstacles to doing more?At one time, Ford Motor Company owned forestland, and sawmills, to provide the wood products for their cars. Vermont Marble Company also had sawmills to make the lumber for crating their products. Paper companies had vast tracts of forest and company crews to provide a steady stream of fiber to keep the mills going. Today, instead of this “vertical integration”, we have more specialization. Large sawmills are specialized for certain groups of species, and sort sizes and grades for many dozens of markets. Even paper companies have found that they can sell off the land and purchase delivered pulp from the new owners. There is a mill near me that buys lower grade hardwood logs and makes various mid-value products, not just lumber. They make grade stakes, specialty pallets, apple and other crates. With lower grade hardwood logs, they produce no premium lumber, but have found markets to add value to poor quality boards and odd species. Most sawmills specialize in high production of commodity lumber. Sawmill and Woodlot Magazine is a great resource for this, and a basic premise is sawing your raw logs into lumber. There are all sorts of options for small-scale sawing. The questions remain, which logs do you saw and which do you sell? What products do you make? As a woodlot owner, you start with trees, and make some kind of lumber product. We will also go into other non-lumber products. In most cases, these will be trees from your own land. But it might make sense to bring in other logs, for example, if you want to specialize in something odd like locust. Another source is logs from arborists. Most arborists have logs they need to dispose of. This includes a lot of junk that might be best used as firewood, or trees with hardware hidden inside, but there are occasional premium lumber logs. Unless there is a commercial mill or broker nearby, a local arborist might be glad to sell these at a low price. You can saw lower grade logs that the market does not reward you for, and make something merchantable like miscellaneous lumber for local building, fencing or pallets. On the other end, you can saw high-grade logs into specialty products, like long timbers, odd dimensions, wide boards and slabs, or “quarter sawn” boards that are not part of the normal market. And then there are odd species like locust, cedar, persimmon and Osage-orange that make specialty products. Unless you are doing something fundamentally different from the normal market, it is difficult to compete at a small scale.Once you have a mill and logs, there are other things to consider, like markets, equip, labor, energy, permits, partners, and byproducts. Is this a hobby, an out-of-control hobby, a part-time or full-time business? What will it be in 5 years? Developing your markets is a good place to start. I know a fellow who retired from a nearby factory, and has a nice band-mill set up on his farm. He saws miscellaneous softwoods to make specialty crating for the factory. This is a part-time venture for his retirement, and he has sawn several batches of lumber for me as my house was expanding. I have to add that not everyone with a saw knows how to make lumber. He had a good eye for what products to make from each log. A logger friend had a batch sawn for his equipment garage. He wanted 12” boards, with 4” battens for a simple lumber order. The “sawyer” (to use the term loosely) would square up each log to a random square, with huge slabs, and then saw the boards to random width with almost no 12” boards. So, who needs lumber in your area? Better yet, who needs lumber that the normal markets do not supply? Is there a need for specialty crates or pallets? Are there craftsmen who want wide boards, unusual thicknesses, or odd species? You have to sell your product, and unless you have a giant barn to store an inventory, and labor to handle it, then it is best to saw for particular customers. I know on fellow who buys in beech logs to saw 3-6” thick blanks for glass-blowing. And there may be someone near you who needs something odd. What other equipment makes sense for your project? If you are harvesting from your own land, then you already have log-handling equipment. A farm tractor with a bucket is most versatile with forks to carry logs and all sorts of 3-pt hitch attachments for other work. A forwarder trailer is another great tool for log handling. There are small scale kilns to dry your wood, and adding a planer or “shaping” mill is another way to add value. Then there is the whole wood-shop to make retail products, all the way to modern CNC milling of final products. If you have a market, and a plan, then investing in equipment might make sense.If you are beyond the hobby stage, then you have to consider labor. There is only so much you can do yourself, and even so, you have to count the cost of your time. I have done a number of custom sawing projects, and am always impressed with the amount of labor involved in handling the wood, especially if it needs to be stickered and covered to dry. Merely sawing rough lumber with a portable mill, it is best to have a helper to haul off the slabs and stack the lumber. Many of the “value added” opportunities involve much more handling. Now you have to think about insurance like Workers Compensation. For a full-time business, you have to attract the right help and pay enough to keep them, including some benefits. This is a tremendous obstacle to growing beyond a part-time operation. And, you may need certain permits to operate in your area. Partnerships are another way to multiply your efforts. This can be friendly or complicated. On a simple scale, you might have a woodlot and tractor, and the neighbor has a sawmill. By cooperating, without the complications of an employee relationship, you have lumber available and he has logs. Again, it takes the right people to make this work. By-products are another consideration. Slabwood from a sawmill can be sold as log-length bundles, or cut it into firewood lengths. It usually does not need to be split. In our area, softwood is not considered suitable firewood, except for sugaring, or perhaps outdoor furnaces. For a small operation, it may be enough to heat your shop, or your house. At some point, it exceeds your personal needs. One option is summer “campfire” wood, sold by the armload. Our family has done some camping, and we often have to buy firewood. Of course, it is not appropriate to move firewood (with the potential of carrying invasive bugs) but I have mixed feelings about paying $5 for an armload of softwood slabs. In my business there are thousands of tons of scrap wood, but I am also glad to support some hobby-business. Other byproducts include sawdust and planer shavings. These are commonly used for animal bedding. Small amounts might be given away, but a consistent supply can create a market. Horse owners pay a decent price for good clean shavings, and I know one business that buys pine pulp logs merely to be processed into shavings to meet this demand. If you de-bark the logs, then the bark can be ground and composted for landscape mulch. On a commercial scale, these byproducts can be a significant part of the profit margin. On a small scale, they can be a liability.There are many wood products that do not involve a sawmill. Firewood comes first to mind, since there are probably more tons of this than any non-lumber product. Cutting your own firewood is the best bang for your buck, since you achieve your forestry goals and have your personal firewood as a by-product. Part of the economic benefit is that you did not have to pay for any trucking cost. Commercial firewood is usually trucked twice: Once as logs from the woodlot to the processor, and again as split wood to the customer. If you are selling firewood from your forest, you can process at your landing and only truck it once. There is plenty of information in Sawmill and Woodlot on your choices for firewood processing. I know a young man working a worn-out hill-farm, where the good timber had been whacked before he bought it. As a steadfast Vermonter, he makes a living doing a series of seasonal activities, including sugaring, hay, beef, firewood, and some logging. He currently cuts about 20 cords for his own house and his folks’ house, another 20 cords for sugaring, plus about 30-40 cords for sale. He does this with a strong back, chainsaw, skidder, and a hydraulic manual splitter. His woodlot is well suited to firewood production with a high percent of low-grade hardwood. With the labor involved, he is just at the tipping point to purchase a firewood processor. My advice is to increase his firewood production to about 100 cords per year, which would justify a mid-level processor. There is a shop in my town that carves wooden bears, up to the full-sized grizzly bear, and all sorts of “lawn ornaments” with a chainsaw, from low-grade pine logs. There is rustic wood furniture made from smaller diameter round stems, and other furniture made from split pieces. Split rail fencing is a product that does not get sawn. And baskets can be made from split ash. We can add Christmas trees and wreaths, but this goes beyond what we think of as “wood products”. So there are plenty of opportunities that do not involve a sawmill. There is a category of wood products made with laminates, that can be done at the small business scale. You probably have to buy the raw veneer, though. Burton snowboards started as a small shop in Vermont, and I have an original signed and numbered board. There is no limit to what can be made with laminated wood, but this takes a fairly sophisticated shop. Musical instruments are a specialty product, and can make your wood worth over $100 per pound. One of my clients makes wooden drums in a small woodshop, with customers that include well-known bands. Another repairs church-organs as a full-scale business. Both of these buy specialty lumber from regular brokers instead of processing wood from their own forest. Certain species leap out as specialty opportunities. Black locust and cedar are particularly durable and are seen as an organic alternative to ‘pressure treated’ wood for outdoor use. Fenceposts are the low end of the value, but I have seen garden trellises and outdoor furniture made with peeled roundwood. There are also opportunities with sawn lumber for outdoor use like decking. Basswood has specialty use for carving since it is soft and uniform. You can make a lot of carved birds from one tree. I once brought a pickup load to Connecticut for a pretty good markup. White birch has many specialty uses. The bark can be peeled and sold as a decorative covering, and smaller poles with white bark make lovely furniture and decorations. I saw one bridal trellis this summer made with birch. These do not last as long as locust for outdoor use though. Ash is another species with specialty use, for bent furniture, snowshoes, canoe paddles, and other products. Other areas of the country will have their own specialty species, like baldcypress, Osage-orange, persimmon, manzanita and juniper. What role do you play in the wood business? Is there something you can do to add more value to your wood products? Many of these ventures start with a passion, some originate by necessity, and some with wild imagination. I get to see a lot of interesting uses of wood in my travels. Perhaps there is someone you can hook up with that needs something you have, or could provide, or has the tools that would make for some opportunity.Wood is good. Robbo Holleran is a private consulting forester helping landowners meet their goals in Vermont and adjacent areas. His work has him outdoors about 150 days each year, plus play time. He is one of the authors of the new Silvicultural Guide for Northern Hardwoods. ................
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