New England Forestry Consultants, Inc.
P.O. Box 370
61 Penacook Road
North Sutton, NH  03260
  Summer 2008


Recently, I was standing on the landing of an active logging job with the landowner, who was my client.  This job was a little different than the normal timber harvest in that I was selling the logs to various buyers based on product.  For example, veneer logs were sold to a veneer buyer, sawlogs with certain specs were being sold to one sawmill, and other sawlogs and pallet logs were being sold to a different sawmill.  Essentially, I was marketing each product in order to generate the highest return.  As the landowner and I were discussing the operation, he turned to a pile of chunks on the landing and commented about the lost income of those chunks.  He felt that he was losing money because those chunks were not going to the mill and would reduce the total volume being sold.  Did that pile mean he was being short changed?

While I agreed with him that less volume was being delivered to the mill, I explained to him that in fact he was making more money removing those defects from the logs than if they were to stay on the logs and were delivered to the mill.  The result? - the "are you nuts!" look from the landowner.  How could it be possible to deliver less volume and generate more income?  The answer, it is all in the grade.

Table 1 illustrates the difference grade can play on the income generating potential of a timber harvest.  In this example, I am assuming the log to be sold is a sugar maple that is 20 feet long, and the inside bark diameter at the small end is 12 inches.  The heart size is 1/3 of the total diameter, and there are defects on two different faces of the log.  One defect is located at 9 feet and the other defect is located at 11 feet.

Table 1.  Cutting For Grade Comparision Table        
  Qty Clear dib Length Volume Mill Price Log Total
    Faces (inches) (feet) (bd.ft.) per MBF Value Payment
Option 1 1 3 12 10 55  $    700  $    39  $    160
  1 3 16 10 110  $  1,100  $  121  
Option 2 1 4 16 8 85  $  4,000  $  340  $    375
  1 2 12 12 70  $    500  $    35  
Option 3 1 4 16 8 85  $  4,000  $  340  $    379
  1 3 12 10 55  $    700  $    39  
Option 4 1 4 16 8 85  $  4,000  $  340  $    408
  1 4 12 8 45  $  1,500  $    68  

Option 1 would be the quick and easy way to cut the log.  Simply cut the log in half to create two 10-foot  logs, each with 3 clear faces, and load it on the truck.  The landowner will be selling 165 board feet to the mill and will receive $160 for the two logs.  That's not too bad, and all of the wood was sent to the mill.  But let's see what happens if we stop a second to think about where to cut this log.

The majority of the volume and value of a log is in the first 8 to 10 feet.  This section needs to get the most scrutiny.  If we were to cut the first log at 8 feet, we would be removing the defects and putting that log into a much higher grade.  In this case, one 8-foot log is now worth $340 because the 8-foot mark was reached prior to reaching any defect.  This amount is already twice as much value as the two logs were worth in Option 1. 

Now, we have to deal with the remaining 12 feet.  Essentially, we have three options.  Sell the 12-foot loge as it is, with 2 clear faces; cut off one defect and sell a 10-foot log with 3 clear faces; or cut both defects off and sell an 8-foot log with 4 clear faces.  The math is pretty simple from here.  The 12-foot log will generate $35, the 10-foot log will generate $39, and the 8-foot log will generate $68.  I vote for the 8-foot log and Option 4.

Cutting for grade as shown in Option 4 results in the chunk pile on the landing.  In this particular example, Option 1 would have delivered 165 board feet to the mill.  Option 4 would deliver 130 board feet to the mill, and 35 board feet left in the chunk pile to be used for firewood.  However, Option 4 would pay $408, while Option 1 would pay $160.  With Option 4, the landowner would essentially be paid $7 per board foot to leave that wood in the chunk pile. 

Additionally, cutting for grade is more important for some species than for others.  The importance will be dependent on the variability in price ranges for that species.  Sugar maple, black cherry, yellow birch, black birch, and Northern red oak usually justify cutting for grade; with ash, white pine, and red maple may be less productive.  For species such as spruce and hemlock, grade seldom plays a significant role and is more reliant on volume.

So, the next time you are on your landing and see a pile of chunks, don't automatically assume that there is a utilization problem.  That chunk pile may mean more money in your pocket.

Tony Lamberton


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- Last updated on 19 August 2008-
New England Forestry Consultants, Inc.
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