According to the U.S. Forest Service, there are many factors influencing the value of timber, from acreage to the number of bidders. Indeed, lumber calculations can be vexingeven for veteran woodworkers. Fortunately, Forest2Market provides great resources to help you chart calculations. The following tips can also help you decide what prices will work to make your sawmill profitable.
Free quote Send messageWhile prices in the state or region reflect the typical rate, local market conditions are more consequential. Case in point if the timber you39re looking at grows near several mills, it may command a higher price than if your mill were the only one nearby.
The value of a timber depends on the species, size, and qualityof the trees. It also relies on the amount of timber sold in a single sale, as well asthe type ofharvestingdone. Quite often, the larger the sale, the lower the price per unit of wood. Conversely, it39s usually more costly to cut down just a few units.
Timber prices alsodependongrowing conditions, which affect the cost to remove and transport timber to a mill. Variables include the distance from the stand to the nearest road, slope degree, and soil wetness.
Getting an idea of the prices most mills are charging for finished lumber can help you work backward to determine a rough estimate for timber costs. Try calling other sawmills in the area to learn what they charge to get an idea of what they charge for finished lumber.
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Sample Calculation Say you wish to determine timber prices for red oak on the stump. You call area sawmills and determine the average price for red oak grade lumber is 800 per thousand board feet. You also learn that harvesting cost is 100 per thousand board feet, trucking is 100 per thousand board feet, and milling is 250 per thousand board feet. Your equation would be.
Before offering 350 per thousand board feet for standing red oak, you have to factor in your profit. For a rough idea, start by adding 50 to 70 to your cost figure excluding timber of 450. You can then subtract that total from the estimated price you can charge for lumber 800 in our above equation.
Therefore, the price range you can pay for red oak on the stump is 35 to 125 per thousand board feet, based on your cost figures 800 minus total costs. This is called your return-to-log RTL calculation.
Many considerations go into calculating the value of a log. The mill factors in total revenue, variable costs, and fixed costs to determine net return. Forest2Market offers sample calculations that break down the numbers, which are generally driven by the following factors.
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