An overview of sawmill operations

Sawmill operators swap experiences, "war" stories, and ideas for production profitability. October 17, 2000

Lately there have been several questions posted about buying sawmills. Here are some ideas based on my experiences.

I couldn't find someone with time to saw some of my timber in 1994. I ended up buying a broken circular mill, which I rebuilt. Now that was a learning experience.

One of the key things I discovered was the general sense of pride people take in their sawmill operations, and the eagerness local sawyers have to share information. I now operate a portable bandmill for profit, along with several pieces of support equipment, including a log truck, resaw, edger, forklift, sharpener and more.

Some lessons learned:

Sawmilling is more work than it looks like!

You never have enough hydraulics, power, blades, or support equipment.

Circle vs. bandmills: There are a lot of differences. Kerf, speed, mill size, and safety just to list some. I'll only address a couple here.

- Kerf. Who cares, if you are not commercially maximizing the logs? A loss of a few board feet (BF) is quite reasonable, considering how much the average sawyer loses in the flitch.

- Safety: Bandmills tend to have less exposed belting and blade.

- Hydraulics: Bandmills often have good log-handling packages for a very reasonable price.

- Blades: Bandmills eat blades, especially in dirty wood; blades for them, however, are inexpensive. A bandmill blade runs from $10 to $25. A circle blade tends to run truer longer, you can power a dull blade quite effectively through a cut due to the strength of the blade. The circle blade will last a lifetime, but costs from several hundred dollars to almost $2,000.

No matter what you buy, someone has one a step bigger and better that you might be able to afford, i.e., you're looking at a $6,000 mill, then the $7,000 mill looks better... the next thing you know you will be looking at a $30,000 mill!

If you see a sawmill in your travels, STOP, say hello and if the sawyer isn't too busy he will surely tell you about his mill, what he might do differently, and why.

If you do stop by a sawmill in operation, take a few minutes to watch the operation and see what it takes.

Hire someone to cut some logs for you and give them a hand when off-loading lumber. This will give you a pretty good idea of the labor intensity of log/lumber handling!

ALL sawmills are repairable. So don't be too shy of a used mill. Manufacturers like WoodMizer, TimberKing, and Baker stand by their machines. Parts are available for the circular mills or can be locally manufactured at very reasonable prices.

Used sawmills are often available starting at around $1,000, and going up to your budget limit, with or without power. There are links to used sawmills like the Sawmill Exchange, North Carolina Agriculture Review, and the Machinery Exchange here on WOODWEB. I am sure there are many others out there.

What would I do differently? Maybe buy a larger-production, used mill; maybe look for something with a board return. I like my saw, but like I said earlier, there is always one that's a step better, no matter what you buy.

As for support equipment, it's great to have access to a tractor/loader or forklift. We started rolling logs to a trailer, then rolling them off onto the log deck! Now, that was a LOT of work! I now have a boom truck with a 7,000-pound boom (and it's not big enough!) and a 2,000-pound rough terrain forklift (and it's not big enough! We are going shopping this fall for bigger trucks.

Forum Responses
Very good overview. I started in late 1993 looking at bandmills and sent for information on a couple. There weren't as many available at that time. Then I spent a couple of months finding and interviewing mill owners, and looking for used mills.

My first choice was the WoodMizer LT25. Then I rationalized the LT30. Then the LT40. Each move up the scale required a new justification session with the family banker (my wife). Then I tried for an LT40HD. I couldn't get approval for that so we got the LT40G18 manual mill in the spring of '94.

Your point that it's more work than it looks like is very true. Anyone thinking about buying a mill should help someone out for a couple of days to get an idea of what it's about. Even with a lot of equipment and good organization, you end up putting in a lot of heavy labor.

To your advice about stopping in when you see a sawmill, I'd add to look for sawmills and talk to their owners. If you have narrowed your search to one or two brands or models, you can call the companies and get names of their customers in your area that have mills with the features you're interested in. Talk to as many owners as you can, because every one of them will do things differently and have good reasons for doing it their way. Find a forest industry show within driving distance and attend it, because you will learn a lot from your first visit.

Making a few boards for your own use is one thing, but sawing as a business is quite another. You have to know a lot about trees, logs, and lumber. You have to run the business, dealing with things like cash flow, taxes, recordkeeping, insurance, return on investment, and on and on. You have to work with customers, keep the ones you've got, and find new ones.

I've come to the conclusion that the profit in running a sawmill business is in not spending money doing something else. If I wasn't sawing, I could be out hunting in Colorado, fishing at the lake, going to a movie, playing golf, etc.

By the way, since '94 we have added to the LT40G18 the following: a Valley edger; a Dodge 3500 flatbed truck and a 16-foot trailer; and an Agco 4660 tractor with loader. We've built a 20-by-40-foot building with lights for the mill, and later added two 15-by-16 extensions.

We have a 30-by-60-foot building full of lumber, about 20,000 BF of logs in stock, and we bought a Blockbuster firewood processor and elevator to deal with junk logs. Other equipment includes a Grizzly's 20-inch planer and 8-inch jointer, along with additional equipment for secondary processing.

We've updated the LT40 with a 22 HP Onan engine, added a hydraulic turner and toe boards, and have run dust collection to that mill. We've also got a Jones debarker, and this spring added a WoodMizer LT40HD35G Super Hydraulic mill. I sure would like to have one of their LT40HD25E mills with all the toys. And an enclosed building to run it in.

My perspective is a little different because I bought my mill, a Lucas 8 Swingblade, as an experiment to see if I could produce lumber for my own building projects.

I figured out what I wanted, then saved up to buy it with cash. I didn't want the burden of a payment plan. I've been able to enjoy the learning process at a relaxed pace. It has been a great experience because I wasn't pushed.

The mill has performed beyond my hopes. I will probably never buy another unless this one wears out and then it would be another just like the one I have.

I have accidentally ended up sawing for others at good profit, but only because I can afford to pass up the lower-quality jobs.

Things I have learned:

You need a reliable log supply.

Power equipment is essential for moving logs and lumber. This is a large secondary investment that is often not considered by those in the market for a mill.

There is good income to be earned with a mill if you are honest and reliable. Your expectations should be limited to making a living only, but you'll work for it. If making money is your primary incentive, there are lots of easier ways to do that than sawmilling.

Don't go out on a financial limb to buy a mill unless you have experience. The work is demanding. Competition can keep your income low. More than a few millers have failed at this financially.

I might add one other perspective -- if you are buying a mill for more than hobby-type activity, get a business plan on paper. It is easy to do and there is plenty of free help (usually thorugh extension services or the Small Business Admininstration) you can get to write a good one.

Also, never use cash to buy a mill; rather, save the cash for log buying, groceries when sales are slow, etc. Borrow for the mill and then pay the bank back as you make money. If you use cash, you will likely run into cash-flow problems.
Gene Wengert, technical advisor

The biggest problem I've seen with most start-up operations is insufficient supply of logs at a reasonable price. The way I attacked that problem was to team up with an established logger. I even allowed him to furnish the land and the capital, since my cash on hand was rather low at the time. Instead, I worked on an x-amount per thousand board feet (MBF), plus commission, basis. I make well above average wages for the industry, and am still able to take on other clients.

We started back in '83, so portable band mills weren't even considered. We started with a reconditioned hand mill. I put that mill in by myself, and had technical input from some of the other local mill owners.

Since '83, we have had four different mills. Two were Jackson portable circle mills that we put in place. We always used 671 Detroits, and we run our edgers and blowers with hydraulic motors on these setups. Daily production was in the 8 to 10 MBF range. Costs were kept down by keeping manpower at a minimum, and keeping production at about 1.5 to 2 MBF per man-day. Industry rule-of-thumb in our area is 1 MBF per man-day.

The last installation was a Morbark mill. This is a heavy-duty mill, and our production is in the 2 to 2.5 MBF per man-day range. We're using a vertical edger, have our own generator, and use hydraulic instead of air.

Things you need to learn: How to maintain a saw and how to re-engineer your mill. We've been making constant engineering improvements on the new equipment. I've been lucky to have access to a top-notch mechanical engineer who can make any hydraulic system work. I tell him what I need to make a more productive mill, and he makes the adjustments.

What sells my lumber is quality. I have buyers coming to me for lumber, since I can deliver quality at a fair price. In some instances, I can name my own price, depending on the market. You must find a niche to fill. Niches will change as markets change. Casket lumber was a good niche, but too many other producers found it and it has dried up. Bridge timbers have remained good for us, often paying better than many grade markets.

What would I do different? Not listen to every salesman that has "just what you need." Most don't.

Should your sawmill be a toy or a business?

If you choose to make it a business it's hard work, but success does not just drop into your lap, no matter what you do. Running a business is not hard. If you are a responsible person and take pride in what you do, that's half the battle. Producing a good product at a fair price is the name of the game.

If bookwork is not your thing then sub it out. Many accountants do work on the side, "cheap."

I have had many jobs that were hard work with little pay. I think having at least some control over your destiny makes good personal as well business sense.

If you buy your mill as a toy, well you know... we all need toys!

The lumber company I worked for approximately 20 years ago specialized in exotic woods. This led to our involvement in local woods, such as valley oak, etc.

There was an "old timer" who was a city arborist and had an old mobile dimension sawmill that he'd use to whittle up local woods for us. We specialized in hard-to-find stuff and good pricing, so our customer base was O.K. About 18 years later I found myself purchasing a WoodMizer LT40HD, having put in over 500 hours on an LT30.

I had been in the lumber business for more than 20 years at that point, including four years running a moulding operation. So my expertise is in the end use of materials. I had a real bad partnership in the lumberyards and now exclusively manufacture exotic and some standard wood products.

My feeling is similar to the previous writers on this subject, in regards to the amount of work. I do believe there is a tremendous amount of money to be made. After running two lumber yards grossing over $6 million a year and netting less than 5 percent, the margins on the product and effort in small sawmill operations are extremely interesting to me.

It is imperative to have good sources for logs. In cities we develop an incredible amount of logs, some of which are useless for one reason or another. But many are perfect substitutes for many standard products, such as cypress for redwood, locust for teak, West Coast walnut for East, and radiata pine for any other pine. We then focus on non-standard sizes and specialty products. It works!

I think the perfect combination is a circular sawmill for production and a WoodMizer for its single mast (allowing for irregular-shaped log sawing). All the other information the previous people have offered is very true.

If you are buying a sawmill to operate for hire, take into consideration what the current sawyers' rates are for your area. If you are buying $20,000 plus worth of equipment and there are three or more saws operating within 50 miles of you, can the market bear another operator? And at what rate?

I started to price work by listing my rate of $150 per MBF and then adding for the cost of blades broken, tramp metal, dirty lumber, etc. But I was watching customer reaction. Now I simply tell them it's 150/MBF and $20/blade for blades damaged due to tramp metal or excessive dirt. Generally I don't even charge for blades, as they are a fair wear-and-tear item on the mill anyway.

My requirements for the customer:
- Nothing smaller than 8-inch diameter and 8 feet long.
- Logs staged properly.
- Provide a helper to stack the lumber.

Charge for mileage? Not me; nothing like putting off the customer just because he isn't your neighbor. Although I do prefer to have 2 MBF or more at a job!

My bottom-line opinion is that most of the sawmills are optimized for a particular market.

Determine the purpose for buying a sawmill, then set your shopping limit and buy what you want. I believe the used circular mills are the best buy for your money/capability curve. But they may not be optimized for your plan.

Then, it's off to the other end of the market. You watch the ads -- "Buy a sawmill and make money," and "Maybe a portable band mill is in your future" -- then you see the price of a fully equipped model.

WoodMizer, Baker, Timberking and a few others are in the $20,000 zone, and are optimized for a low-end commercial market. One owner, one-family operator, on-site service. Good for marketing to farms and individuals.

Swing blade systems are exceptionally portable and good for recovering oversized stock (logs), or going where no other saw can go. They're good for someone who has a bigger saw, or someone who may not be sawing for profit. But you can be limited by their capacity for dimensional timber production.

Then we have small circular mills (non-automated). Good for farmers and other persons sawing for their own benefit. They're hard to make a profit with because of the additional manpower and equipment needed for a small operation. However, in the used market, these are often the most saw for your money! I can surely tell you that a marketing director doesn't want you to add up the price of a used saw and loader and compare it to a new, top-of-the-line portable bandmill. If you buy a used circular mill and a used loader you will still have some money left over in comparison to the bandmill.

Finally, commercial circular mills: Good output, a serious investment and you'll need a good business plan. There will be a lot of support equipment, manpower, electrical/diesel, waste, marketing, and power issues to be addressed.

The circular saw is probably the best deal for the money. But...

1. They are generally limited to production sizes of 6 by 12 inches, maximum. With some adjustments and other equipment, you can go larger.
2. Small logs are not as easy to mill on these machines.
3. You are stuck with a circular texture on your rough-sawn materials. While this doesn't matter most of the time, it can in some cases.
4. You do lose in scale on the circular saw. The lizard, jacket board, flitch, or whatever you might be calling it, you mostly will lose. You will also have kerf scale loss in some cases. This is most apparent in cutting standard products like nominal 2-by-6s and such, where the extra 3/16 or so in sawdust and chips would be converted into saleable material.

All portable sawmills are semi-low production or small-operation based. This doesn't mean you cannot keep a cadre of five sawyers specializing in hard-to-find materials busy, or couldn't have success at converting low-cost, readily available logs coming from a city into profit. I believe a small mill can be a moderate-sized business supplying many standard and all the exotic and difficult-to-find materials.

With a bandmill you can supply a large variety of shapes and sizes of boards and timbers in short order. You can't really supply materials for a tract of homes by any means, but you can achieve gross sales of up to $500,000 per year in a five-man operation, I think, give or take.

I am from the middle of California. I purchased wood and ran a moulder and also had more than twenty years in the retail lumber business, owning two retail stores on the California coast. I also manufactured other wood products over the years.

We set up a WoodMizer Super Hydraulic, electric powered, 2-1/2 years ago. It has a breast bench and green table. It is stationary; we decided it gave us maximum production that way.

In New Zealand we cut radiata pine pruned logs. These have all the branches removed at a young age, so the outer sides give clear, knot-free boards. We have six staff and have just built a conventional kiln, made out of an old refrigerated container. It works well and gives us more marketing options.

We have found that the WoodMizer is O.K., but there's quite a bit of downtime with breakages. We are probably pushing it to the limit, though.

As stated, sawmills can just get bigger and you keep getting the next model up. We are looking at changing the mill in a year or so and would be interested in any comments people in the U.S.A. and Canada might have on bandmills like Logmaster or Timberwolf vs. WoodMizer, in terms of production rates and reliability. Down here, WoodMizer is all you can get.

There are a lot of small mills being run here, with five to eight men, full time. As with others, it's hard work but you can make a good living if you run the operation well.

I have seen the Baker products line. They have a video that you can get for free. You might look at that. There are other ways to go also, such as making cants on the WoodMizer and getting a resaw or gang rip for processing the cants.

The comments below were added after this Forum discussion was archived as a Knowledge Base article (add your comment).

Comment from contributor A:
After 19 years of milling exotic and very valuable lumber like Hawaiian koa, tsugi, teak narra and other rare woods, I think it is most economical to use a circular saw to square up cants quickly and then use a bandsaw mill to make the most economical use of the logs. I have a modified Foley-Belsaw circle saw - the dog board can be as thin as 1 inch and, with additions to the carriage, can cut logs as short as 3 feet for making furniture wood from short curving logs of Koa or narra, monkeypod, etc. Final cuts are made with a bandmill since some of these woods sell for as much as $20 per board foot in Hawaii.