Cost of Sawmilling: Renting Versus Owning

      A lumber consumer who's renting a mill to make his own wood wonders which side his bread is buttered on. April 24, 2014

Question
I need around 20 mbf of fas poplar monthly, so I decided to saw it myself. It took me four weeks with the help of one person. I don't have a sawmill yet, so I got one from a guy I know. Itís a WM L35 and he is charging me 15c/bf, for the FAS and 1f that I saw. So itís costing me $3,000 a month plus gas. I know that the best way is to buy my own mill, but right now I am a bit tight with cash flow. Am I being overcharged? Is it better to hire someone with his own mill?

Forum Responses
(Sawing and Drying Forum)
From Gene Wengert, forum technical advisor:
The price seems fair. Why not get a bank loan for a LT40? They will finance hardware and interest rates are low. Pay the loan back at $2000 per month. Plus maybe even do some custom sawing for others.



From Contributor M:
It's costing you $3k/month in rent only on the mill. Plus your guy for a month, your time, blades, gas, and so on. At a mere $500/week per man you have another 4k in labor - maybe 40 blades? Thereís another $1200. That's over 10k? Is my math off? What is FAS poplar in the market report right now?


From the original questioner:
I know that the best is to buy my own. My helper cost me $300/week because he does not work all day and I do not pay for the blades, and after I saw it I kiln dry it in my own kiln. Last that I checked the price was $700/mbf but they were asking me $800 and over for green because they said that they have a strong market for FAS poplar. Selling price for kiln dry is $10.50 for 4/4 and $10.60 for 8/4.I know that I have to work harder to make a decent profit, but thatís how it is now a days.


From Contributor M:
Well, I wasnít saying that buying your own mill was the best option but the fact that you donít have to supply your own blades and provide for maintenance and upkeep of the mill is a big plus. I was just wondering what FAS green was selling for in your local area. It seems like in your location itís on the high side so that and the blades make the endeavor a bit more lucrative. It just seems that often times on smaller scale sawing many donít factor in all the true costs as compared to simply buying green and drying yourself. Around here itís just not cost effective to saw anything other than prime material with a smaller mill. The cost of locally sawn lumber is low enough that itís a very tight squeeze.

From Contributor Y

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I assume you already have the support equipment (loaders, chain saws, trailers, etc.). That's often greater than the cost of the mill itself. I think the more important question is do you make anything above your expense (including your labor)? If you can put a pencil to the numbers and use black ink on the bottom line, then it is worthwhile. I agree with Gene, though. I can't imagine sawing that much lumber without owning a sawmill. What happens when you and the mill owner need to use it at the same time? At $3k/month, in a year's time, he will have enough to buy himself a new sawmill!


From Contributor M:
The 3K/month sounds like it includes all blades, sharpening, oil changes, maintenance, wear and tear, hydraulic hoses/oil, and so on. Just doing some rough math on 20mbf I'd say at least half of that 3K is out the window in true expenses if not more. Still not bad at $1500/month clear to the mill owner if that's what it works out to and if he is sawing as well itís a real bonus.

I don't mean to sound like a skeptic but owning a Norwood mill myself and already owning all the support equipment I found very quickly that sawing bread and butter material I can buy at the big mills is simply a losing proposition. By the time I calculate the cost of felling, cutting up, skidding (perhaps 2-3 saw logs at a time not 2-3 trees or more like the big guys), stacking, sawing, stickering, cleaning up the chips/slabs, along with all the expenses above, I have to devalue my labor and machinery overhead into the negative. Forget about cutting a tire down in the woods, breakdown, tear a couple hoses off the tractor, all inevitable.

In my area for bread and butter 4/4, framing, etc., green lumber prices would have to exceed 1k/mbf to make it even remotely cost effective to run the mill. I tend to keep the mill to wide, odd, high dollar sawing only and buy the rest but in this case the pricing is a bit different though owning all this equipment myself I still think paying the rent on someone elseís responsibility isn't too awful.



From the original questioner:
All the wear and tear and all other expenses are paid from the owner, but still, I would rather buy my own mill. I work hard to keep the expenses down. I do not have conveyors, everything is handled manually. I'm hoping within a few months I buy a Lt 70 3phase with conveyors. There are a lot of good used ones for sale at the moment.


From Contributor P:
Youíre in the place I was a while ago. I stopped beating my head against the wall and started going from log to finished product. What about taking some of the low grade and making it into flooring at $3.00/bf or wainscot and caps at $1.60/bf? Set up a website order/pay link and cut $10,000 a month and still make a good living. I hope everything comes together for you and enjoy the new mill when you get it.



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