Pricing Rough Cut Lumber

      and gets plenty. June 23, 2005

Question
I am looking for help on how to price my rough-cut, air-dried hardwoods. I have to put a business proposition together for an investor, and he wants to see numbers. I have a sheet for a local lumber yard and prices for rough-cut dried lumber. Does anyone have any suggestions?

Forum Responses
(Sawing and Drying Forum)
From contributor C:
I take wholesale kiln-dried prices, and cut them in half for green lumber.



From contributor B:
I set my retail kiln-dried prices by benchmarking with other wood retailers within a 75 mile radius of me. I try to put my prices in the middle of the pack. I sell the air-dried lumber 20% or so far, 33% less than the kiln-dried price. Some feel that's high, but I had to sit on it for awhile to dry it, so I feel it's justified.


From contributor A:
I have a price list of what my local green wholesaler pays for lumber. There is a national list for each area and what those markets are paying. I price mine by what I pay for - the log + sawing cost + handling fee = the cost of the wood. You may lose some on the lower grades, and hopefully you will make it up on the higher grades.


From contributor D:
To contributor A: You mentioned a list, I have been looking for something like that myself. I saw for myself and do a little custom sawing as well, but lately people have been coming by wanting wood. I have a growing pile and I didn't know how to price it, so I just added a dollar a board foot to what I paid for the log. I also pay $300 mbf for oak, or 30 cents a bf. If someone wanted a couple of 1 x 6 x 10, I charged them $12.50. That sounds high compared to your rates, but they aren't buying bulk, just a few boards.


From contributor S:
When I first started, I was really torn about AD prices. I knew from my limited experience in brokering what wholesale prices, i.e. Hardwood Market report prices were, but I also knew as a cabinetmaker what retail was.

My first sale of AD material was a couple hundred feet of 5/4 black walnut that I thought was poor quality. I had put it in too breezy of a spot and it had a lot of end and surface checks. The customer had asked prices over the phone before coming, and I had quoted $2 a board foot before dissembling the pile. When he came, before I could open my mouth to lower the price, he said he'd take it all. Here is a picture of what he built out of "poor quality" walnut.




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