Are Small-Log Processing Systems Profitable?
The handling cost is high per BF of lumber produced and the footage per saw cut is low compared to larger logs. This means that your lumber is more expensive to produce than lumber from larger logs. Only about 45% of a small log (or less) is converted to lumber. This means lots of waste. Small logs can be profitably sawn into pallet lumber if highly automated and the mill is well designed. Usually, a fairly high production rate is required. Remember that the pulp mills will not run out of logs, so you need to get logs that they are not competing for. Low log costs will be key.
From contributor S:
Yes, I agree that low log costs are one of the key components for small log systems to be profitable. Low labor costs would be another important factor to consider. How much are the labor costs per thousand feet of lumber or per ton of logs, and per thousand feet of lumber produced?
If you had a small log system set up in an area that is relatively flat, then forwarders and skidders with grapples could get to the small timber. Another helpful factor would be government supported thinning of small trees, and yes, the competition would be tough against the big pulp mills. The bigger trees are generally more profitable, so a small log system could be an added value to a bigger mill where all of the factors favoring the small log system are met.
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