Are you out of sorts?
Then you're losing money.

Managing your forest to keep it as healthy as possible and to mitigate the risk of wildfire is backbreaking, expensive work. Most Tree Farmers in Colorado would, at the very least, like to make enough from the byproducts of their effort to cover expenses, but many of us don't plan our harvesting so that we can get the highest value from the wood we harvest.

Scott Golden, Tree Farmer, Logger, and Forestry Technician for Boulder County Parks & Open Space addressed this subject at a recent Larimer County Tree Farm meeting. Scott suggested a plan to help us not only increase the value of our harvests short term, but further increase their value in the long term by working together. His plan is based on the utilization of "sorts" and value-added processing.

Scott reminded us that by identifying the best possible use of logs in the field we can sort them into categories of products to increase the value of our overall harvest. For instance, potential products for most of us include firewood, posts, poles, saw logs, and, perhaps chips and shavings. The majority of the wood most of us cut may only be suitable for firewood. However, if we take the time to identify and sort out that wood that could be sold for posts, poles, and saw logs, we could significantly increase the value of our total harvest. Now, many of you with management plans generally understand this concept, but Scott approached it from a logical dollars and cents direction that should immediately send you out to your firewood piles searching for lost profit.

Here is how it works:

Say a Tree Farmer sells a cord of firewood in 8 foot lengths for on average $60 per cord.
If these logs averaged 6”–8” in diameter, there would be approximately 60 post-sized logs to a full cord (128ft.3). So, by selling the cord as firewood instead of posts, the value would be about $1 per post.

However, if a Tree Farmer sorted through his wood and pulled out those logs suitable for posts,
they could be sold to a post mill for approximately $2.65 a post.

If that Tree Farmer went farther and sorted out the longer logs suitable for 16' corral poles,
they could be sold to a post mill for approximately $3.85 a pole.

If that Tree Farmer then sorted out the logs suitable for saw logs, they might bring $0.28 - $0.30 a board foot! Utilizing the Scribner Log Scale (which is the most commonly used in the Inter-Mountain Region) an 8’ x 8” (measured on small end) sawlog would scale at 20 BF for a total mill value of $5.60-$6.00. Currently, local mills will not normally accept sawlogs smaller than 8”.

Say as little as 20% of the wood that a Tree Farmer harvests is suitable for a higher value product such as posts. Then, instead of selling firewood at the equivalent of $1 a post (60 posts in a cord divided by $60/cord) he would be selling 20% of that cord or 12 of those posts for $2.65 each, a premium of $1.65 a post, an increase in profit of 165% per post!!

It doesn't take much math to determine that this approach might significantly increase the value of your harvest with little increased time, effort or expense.

But, as they say in TV commercials, there's more!

Our Tree Farmer is selling his posts and poles and saw logs to a middle man who might add value by debarking the posts and selling them (at twice the price paid to the Tree Farmer) to a business that can pressure treat them . Or the middle man might cut the saw logs into planks and sell them to a consumer or a retailer at more than twice the price paid to the Tree Farmer. He might even turn around and, without doing anything to the corral poles. sell them to his next customer for twice as much as he paid the Tree Farmer.

That can happen because small individual Tree Farmers can't afford the equipment needed to add that extra value to their products themselves, and they don't produce in the scale needed to interest larger businesses.

But, what if a number of local Tree Farmers were to get together, pool their resources, invest in and share the equipment needed to add value to their product, and combine their products so they could transport and sell in bulk?. They might be able to bypass the middlemen and sell their products at twice what they currently receive. The value for the same products might then look like this.

To continue the TV commercial analogy,
call immediately and there is a bonus at no extra charge!

In addition to the increase in profits immediately realized by using sorts and further realized by combining resources with fellow Tree Farmers, there are a couple of new markets about to open for a byproduct of our harvesting efforts. That byproduct is slash, and, up until now, slash treatment has been increasing your expenses rather than producing profits.

Currently, many of us pile and burn our slash in order to mitigate the risk of wildfire by reducing the fuel load in our forests. That chore may be a benefit to us and even the community at large, but it is difficult, time consuming, dirty work that pollutes the air to boot.

What if we could turn that slash into fuel to heat public and private buildings instead of wasting a potential energy source? The opportunity to do just that is on the horizon (see The Best Thing To Do with Colorado's Greatest Sustainable Natural Resource -Burn It?) To take advantage of this coming opportunity, however, Tree Farmers must work together. The amount of fuel required by many of the heating facilities being planned will be considerably more than any one Tree Farmer can supply.

Then there is the potential of cellulosic ethanol. Corn farmers are currently organizing to take advantage of the demand for corn ethanol. But corn is also a food and its supply will always be limited. That is why there is a huge effort underway to utilize the cellulose found in all plants (including trees) to make ethanol. It is estimated that an economical method of producing cellulosic ethanol will be attained by 2012 if not before. When that happens, a huge demand for raw cellulosic material will be unleashed. Since slash is in abundant supply and its removal from our forests has the added benefit of mitigating the risk of, and also the cost to fight, wildfire, it should also be in huge demand. If Tree Farmers are already organized suppliers of wood products including biomass material, like slash in the form of wood chips, for heating, they might also become suppliers of wood chips for cellulosic ethanol plants.

Scott has shown us how to get started. If you aren't using sorts now, you are probably losing money. If you don't belong to an organization or co-op of wood product producers adding value to your products, you are probably losing money. And, if you aren't planning on how you can participate in the markets for biomass heating fuel and cellulosic ethanol, you will probably be losing even more money soon.

If you are a Tree Farmer, help organize your local group. If you are not a Tree Farmer, contact us at info@treefarmer.com and find out how to get involved. It will be worth your while.

 

Appendix A
STANDARD LOG QUALITY & DIMENSIONS REQUIRED BY MILLS

One of the most important considerations should be to give your customer, whether that is a processing facility (mill) or retail customer, a high quality product. Nothing will ruin your business relationship sooner than providing your customer with a less than optimal product. Conversely, if you have a proven good reputation with the mill, they will often take your product in lean times, even as they turn away other suppliers.

Posts, poles, & sawlogs need to be: clean, have minimal taper along their length, straight, trimmed flush (no staubs), bucked at a nice square 90 degree angle, and have the allotted overcut (see below). Also, there can be no decay or invasive defects like cankers, or extensive “end checking” on the logs from over-drying. Minimum diameters for material are generally as follows, measured inside bark, at the small end: 6 ½’ & 8’ posts - 4”, 16’ corral poles – 3”, sawlogs – 8”. NOTE: Currently in N. Colo., mills are not accepting pure loads of ponderosa pine for posts. They prefer lodgepole pine or Douglas-fir. Hopefully this will change in the near future or we can take the future into our own hands with the co-op and have a post peeler to utilize. The main reason the post mills do not want ponderosa is that they often have to send it through the peeler twice due to the thick bark. The end processor, preservative treatment plants, actually prefer ponderosa due to the fact that it more readily uptakes the preservative treatment.

It is very important to allow for a quality, uniform overcut on all dimensionally destined material. For example, an 8’ post at the retailer is a hair over 8’. At the mill after you deliver the posts and they are peeled, the operator consolidates bundles and then trims the ends. If you have not incorporated the standard overcut, the mill owner will reject your product, regardless of quality, and you have just gained another piece of firewood and lost significant income potential from that piece. In our region, an acceptable overcut, if the ends are cut clean at a 90 degree angle, is 3” for each 8’ of length. So, an 8’ log should be cut 8’3”, a 16’ log should be 16’6”, a 24’ log should be 24’9” and so on. Some sawmills will require a 6” overcut for each 8” length. The safest bet is talk to your mill before you harvest and make certain of their individual specs. Take home message; always allow for overcut so you do not become a victim of overpriced firewood.

SCALING (MEASURING) SAWLOGS

Scaling of forest products is either based on solid wood volume, stacked wood volume, or weight. Examples of solid wood volume would be CCF (100 ft3), Solid Cubic Meter, or Board Foot. Examples of loose volume would be a Cord (128 ft3), or Cubic Meter. Weight is measured by the Ton, whether that is short, standard, or metric.

For sawlogs, there are primarily two methods in our region for scaling; weight by the short ton and board feet. While several mills routinely pay by the ton to commercial loggers, I would strongly discourage small forest landowners doing their own harvesting from going this route. The reason is moisture content. Commercial Loggers commonly practice what is known as “hot” logging. In other words, a tree is cut, skidded, processed, and trucked often within a day or two. For a Tree Farmer, it may take a few weeks or months to accumulate enough sawlogs in your sort to justify a trip to the mill. During this time your sawlogs are continually drying and losing weight. When you arrive at the mill, the owner will not compensate you for the difference in moisture content (exception is biomass fuel). However, they will gain from decreased drying time required as well as increased volume and you will lose even though you are probably supplying a higher quality product from your sorts.

Most mills locally will pay by the board foot. A board foot is 1”x12”x12”. There are several different scaling models that are all based on the same mathematical principle of calculating the amount of dimensional lumber that can be processed from a round log, factoring in its length and diameter at the small end, inside bark. The most widely recognized scaling methods are Doyle Rule, International ¼, Scribner, and Scribner Decimal C. Scribner & Scribner Decimal C are the recognized scaling systems in our region. They are essentially the same with the exception being that say Scribner scaled 40BF, Scribner Decimal C would show it as a 4. In essence, you just drop a digit for Decimal C. 1000 BF in Scribner would be denoted as 1000BF, and in Decimal C it would be 100. Although the scale predicts the amount of recoverable lumber from a log, there is almost always an over-run. In other words, the scale may calculate that you can recover 100BF from a log, when in reality you may actually get 120BF of dimensional lumber. This typically can run as high as 15-20%. As another side note, the mill does not pay you for this over-run; it is considered as a “bonus” for them. These scales were also based on using typical circular saw mills. With band mills and the narrow kerf they produce, the over-run with a good sawyer can approach 35%! So…, another plus for a co-op if we have our own band mill to process our own logs, would be an increase in recoverable revenue of up to 35% in addition to the value-added figures referenced earlier.

When you go to the mill, they are going to want to scale the logs. That said, you also are going to want to have scaled your load before departing for the mill. By doing this, you will have an absolute value in order to be able to resolve any disputes over volume that may arise. You may purchase either a Scribner scale book or Scribner scale stick from a forestry supply dealer for just a few dollars. Vendors would include Bailey’s, Madsen’s, Forestry Suppliers, or Ben Meadows.

In conclusion; utilize sorts fully, know your markets, deliver a quality product, calculate an accurate volume, and constantly be thinking about value-added processes.