is your wood pricing viable, with increased fuel cost's

[STLfirewood]

We are going to take another price increase for orders placed after April 15th. We are going to raise it to 150 a cord delivered for all our wood. If gas goes up so will our wood prices.

Ok I'll take 40 cords delivered to the St. Louis area. When can I expect delivery?

Scott

 

[indiansprings]

Sorry your outside the 10 mile no charge delivery area.
We've quoted several guys that always spout off they will take a tractor trailer load, but never have had any actually bite the hook.
If a person will have a trailer dropped off here at the farm we would sell them oak at 125.00 a cord stacked/loaded on the trailer.
Really don't need anymore business than we have though, this is the first year that at this time we are as of today over 25 cords behind, it's a good thing but everyone is griping, they are sick and tired of cutting wood, they are ready for haying to start. We've been planting sweet corn by hand, it's going to be a 3 acre patch, I'm about to have a mutiny.

 

[Como]

So how many gallons of gas does it take to produce a cord?

Under a gallon to process, say another gallon for 'free' local delivery.

The other variable is the logging side which would be difficult to average.

So lets say 3 gallons, if the price of fuel doubles then that would be an extra $10 a cord.

In Colorado to compete with Natural Gas you would be at $160 a hardwood cord, realistically less than that as NG is a premium product.

 

[redprospector]

Well, I'll probably get argued with on this one, but what the heck.
The price of fuel isn't your biggest concerne as a firewood producer.
Let's say you blow the engine on your splitter. I know you can get one from Harbor Junk for $99, but if you're selling firewood for beer money you have to take that $99 away from your family now to keep yourself in beer money.
Free delivery? Hahahaha! No free rides here. Somebody's got to pay for it, might as well be the guy getting the wood.
We used to get an auto tranny in a pickup rebuilt for 5 or 6 hundred bucks. Not any more. Try $1500 to $3000 now. Better figure it in, or you'll be making those free deliveries in a wheel barrow. Don't forget those $200 tires you bought to carry the extra load. They ain't gonna last forever.
Labor............Now that's a touchy subject. If most people's day time boss asked them to work as hard at that job as they do cutting & splitting firewood they'd throw a fit. But they'll do firewood for beer money. Personally, I think that if you figure less for your labor cutting wood, than you get at your day job..................Well, you're not being fair to your boss.

I've got more but I'm afraid my login will time out again.

Andy

 

[redprospector]

Ok, let's try some more.
Back to those free deliveries. I don't think you can deliver a load with a gallon of gas, unless you're taking it next door. But even if you can, you can't do it with the same truck forever. So you better figure in something for replacing that truck.
My saw's cost $700 to $900 each. Yeah, they last quite a while, but when one's got to be replaced you either pay for it with the money you figured into your price for saw replacement, or you put it on the credit card and make monthly payments out of the check for your day job, or you figure out some other way to take it out of your day time pay check. Or last but not least, you go out of business and quit selling firewood.
I said yesterday that I figure a little under $3.00 an hour of saw use just for maintenance & replacement. I won't burn near that much gas, and bar oil in an hour.

I see a lot of people say, "I just can't afford a processor", and they never will unless they start planning to make money.

Andy

 

[Junkrunner]

Man! You guys wouldn't be in the "firewood" business here long, with setting your own prices without seeing the competors. As far as lookin at the cost of "what if this would break" that's just part of it. I repair, fix & modify all my own stuff. I ain't got time to think about "what ifs"
All the processors I see are a joke. First off, you gotta have straight wood, Around here all the loggers are gonna sell their wood for, cross-ties, mill lumber or pulp. The only thing left for firewood is tops and dead stuff. And the one fella I know who has one, sells his wood for 50 bucks for half a cord (you pickup). And he buys all his logs and he's bin in business now for 10 yrs.
It must be different in the other parts of the country. Like I stated before there is ALOT of wood here, ALOT of customers here, and ALOT of people sellin.. That's what keeps it competitive. You talk to any one of them and they'll tell you the same.. Everybody here who sells has a good customer base, I have no reason to "low ball" anyone.....

If I see a need to raise the price, I will. But for now, I REFUSE TO JUMP ON THE BAND WAGON... Things are hard enough on people as it is......

 

[Circle B MN]

It's not that I don't know what others are selling for, but more that I don't let their price influence greatly the price I set for my own product. I have no doubt I could be profitable in your region, just as I am here. It's all a simple business matrix that applies to wood the same as it applies to apples, hay, horses, etc.

"Things are hard enough on people as it is...... "

This idea can sink your ship fast. It's great to to care about your customer base, and your community, but don't let your business suffer because of it. If you are not operating at a profit, it's not a business anymore it's a charity. Nothing wrong with either, just be sure you know which one you want to be.

 

[Swamp Yankee]

If you are not operating at a profit, it's not a business anymore it's a charity. Nothing wrong with either, just be sure you know which one you want to be.

Very well put.

One exception, if operating at a loss for a couple years you can play a few games, and with the help of a good tax accountant, drive the IRS nuts.

Take Care

 

[Como]

The thread asked about the impact of fuel costs on wood prices.

Fuel it would seem that everybody agrees is a very small component, less than 10%.

It is however a good excuse to raise your prices

From someone trying to make a full time living one of the big issues is that it is an easy business to enter, or to do as a side activity.

 

[Circle B MN]

Very well put.

One exception, if operating at a loss for a couple years you can play a few games, and with the help of a good tax accountant, drive the IRS nuts.

Take Care

Very true. Key pieces of any business are good equipment and a great accountant.

 

[Wood Doctor]

Economizing...

...I said yesterday that I figure a little under $3.00 an hour of saw use just for maintenance & replacement. I won't burn near that much gas, and bar oil in an hour... Andy

I think you may have to refigure that. At 20 minutes per tank, 3 tanks in an hour, and suddenly you've run through $3 worth of gas and bar oil. So now you better think in terms of $6 per hour of saw use to handle the fuel, bar oil, maintenance, & replacement.

One way to save on replacement is to recondition used saws that may have rather few hours on them. I can usually do it in 6 hours or less of shop time and an average of $30 worth of parts. That's how my little 010 AV came on board--great limber and small bucking saw. However, I seem to have a knack for servicing and repairs.

 

[RAMROD48]

So how many gallons of gas does it take to produce a cord?

Under a gallon to process, say another gallon for 'free' local delivery.


.

I will take 3 of these trucks....sorry but you DONT HAVE A CLUE....

$70 to fill my truck and I get about 3-4 average deliveries....

 

[blackdogon57]

$70 to fill my truck and I get about 3-4 average deliveries....[/QUOTE]

I filled my truck yesterday. Cost was $142.00. If I have to haul more than a few miles the fuel cost adds up real fast. When I tack on the fuel cost to process and load I am beginning to wonder if it is worth the effort.

 

[redprospector]

I think you may have to refigure that. At 20 minutes per tank, 3 tanks in an hour, and suddenly you've run through $3 worth of gas and bar oil. So now you better think in terms of $6 per hour of saw use to handle the fuel, bar oil, maintenance, & replacement.

One way to save on replacement is to recondition used saws that may have rather few hours on them. I can usually do it in 6 hours or less of shop time and an average of $30 worth of parts. That's how my little 010 AV came on board--great limber and small bucking saw. However, I seem to have a knack for servicing and repairs.

Everyone needs to do their own cost annalisis. The $3.00 figure I used dosen't include gas, oil, or labor. That's just the cost of owning the saw. If I were using your figures of 3 tanks an hour, just off the top of my head I'd say you'd better figure closer to $7.50 an hour.
If I have to cut firewood I use a processor, so I won't burn 3 tanks an hour in a saw. While thinning small diameter trees I'll only use 1.5 to 2 tanks per hour. But I also get to figure the cost of owning and operating a skidder, and the processor.

Reconditioning equipment is a great way to save a little. But one thing you have to consider is can you make more cutting than wrenching? I've been in both situations. I've seen times when I had to recondition something to get the job done, and times when I couldn't afford the time off of production. Then you replace it, and maybe save it to recondition later. That's one of the key's to keeping a good profit margin. Figure your price based on replacement, and if you can figure out ways to save a little here and there it's money in the bank.

Andy

 

[redprospector]

Man! You guys wouldn't be in the "firewood" business here long, with setting your own prices without seeing the competors. As far as lookin at the cost of "what if this would break" that's just part of it. I repair, fix & modify all my own stuff. I ain't got time to think about "what ifs"
All the processors I see are a joke. First off, you gotta have straight wood, Around here all the loggers are gonna sell their wood for, cross-ties, mill lumber or pulp. The only thing left for firewood is tops and dead stuff. And the one fella I know who has one, sells his wood for 50 bucks for half a cord (you pickup). And he buys all his logs and he's bin in business now for 10 yrs.
It must be different in the other parts of the country. Like I stated before there is ALOT of wood here, ALOT of customers here, and ALOT of people sellin.. That's what keeps it competitive. You talk to any one of them and they'll tell you the same.. Everybody here who sells has a good customer base, I have no reason to "low ball" anyone.....

If I see a need to raise the price, I will. But for now, I REFUSE TO JUMP ON THE BAND WAGON... Things are hard enough on people as it is......

That is my point, exactly! Why would you want to be in a business long that wasn't making money? I can find something else to do with a saw if I just want to run it for fun.
Up until a few years ago firewood around here was selling for $75 a cord. I figured out that I wasn't turning a profit until I hit about $110 retail, so I raised my prices. No I didn't sell as many cords retail that year, but what I sold was at a profit. The guy's that were selling the cheap wood saw that I was selling some at $110 so they went up to $100. Then my sales went up.
I don't sell wood retail anymore, but when I sell wood wholesale I get $100 a cord for it, but I may sell 50 or 75 cords at a time. There's not much profit in it, but a little. Like I said earlier in the thread, I just gave away 100 cords of tree length logs to get them out of my way. It wasn't worth the time lost thinning to process it.

As far as processors being a joke................To each his own.
I've got a small processor, and can do about 40 to 50 cords a week with it by myself. How much can you do with a chainsaw and splitter by yourself? Volume has a lot to do with pricing too.

Andy

 

[Junkrunner]

It's not that I don't know what others are selling for, but more that I don't let their price influence greatly the price I set for my own product. I have no doubt I could be profitable in your region, just as I am here. It's all a simple business matrix that applies to wood the same as it applies to apples, hay, horses, etc.

"Things are hard enough on people as it is...... "

This idea can sink your ship fast. It's great to to care about your customer base, and your community, but don't let your business suffer because of it. If you are not operating at a profit, it's not a business anymore it's a charity. Nothing wrong with either, just be sure you know which one you want to be.

My business is just fine. But if you think you could come in this area with a 200 dollar cord price or even 150, and make it, you would be disappointed. I just don't see how you can say that you don't let other peoples prices affect yours..

If i'm buyin gas and it's three cents cheaper across the street. guess what?

 

[Dalmatian90]

In Colorado to compete with Natural Gas you would be at $160 a hardwood cord,

1) Based on the Jan 11 prices, that's spot on.

In Connecticut the equivalent price is $265/cord.

2) But how many folks live where NG is available AND primarily heat with wood?

Around here it's only the more densely populated areas that have NG service.

Oil & Propane would be what you're competing with primarily in areas folks are more likely to be heating with wood.

(Conversely, in the NG areas folks are mostly using it for ambiance and possibly a backup heat source...it's the areas with widespread NG availability because of large areas of high population density that you start to see prices > $300/cord because there more people then trees. The value to folks starts to come not from how to keep warm, but that they want to get some nookie in front of the fireplace).

 

[redprospector]

My business is just fine. But if you think you could come in this area with a 200 dollar cord price or even 150, and make it, you would be disappointed. I just don't see how you can say that you don't let other peoples prices affect yours..

If i'm buyin gas and it's three cents cheaper across the street. guess what?

I'm glad your business is doing well. I really am. Just some of our thoughts don't mix and I'm trying to figure out why.
Do they charge less for a.......let's say Ford F-250 there than they do everywhere else?
Is gas cheaper? Are groceries less expensive? Saw's? Splitters? Labor?
If so I can understand what your saying. If not, I'm still at a loss.

On another note. If gas is three cents cheaper across the street, that's one thing. But if ya gotta go across town to save three cents a gallon, you might be chasing nickles & passing up dollars.

Andy

 

[Wood Doctor]

Everyone needs to do their own cost annalisis. The $3.00 figure I used dosen't include gas, oil, or labor. That's just the cost of owning the saw. If I were using your figures of 3 tanks an hour, just off the top of my head I'd say you'd better figure closer to $7.50 an hour.

If I have to cut firewood I use a processor, so I won't burn 3 tanks an hour in a saw. While thinning small diameter trees I'll only use 1.5 to 2 tanks per hour. But I also get to figure the cost of owning and operating a skidder, and the processor.

Reconditioning equipment is a great way to save a little. But one thing you have to consider is can you make more cutting than wrenching? I've been in both situations. I've seen times when I had to recondition something to get the job done, and times when I couldn't afford the time off of production. Then you replace it, and maybe save it to recondition later. That's one of the key's to keeping a good profit margin. Figure your price based on replacement, and if you can figure out ways to save a little here and there it's money in the bank.

Andy

Good discusson, Andy. I've often wondered about chainsaw costs per hour. It also differs from one brand to the next, from one size to the next, and from one operator to the next. You have to match the saw up with the log size being cut before you start the saw. Cutting little logs with big saws makes no sense and vice versa is also true.

There's also the famous ideal log size when it comes to firewood. Wrestling ernormous logs takes more time than they are worth. The ideal log for me is one that I can lift onto the truck myself without injuring my back. Lately, I've started noodling more logs with the MS 361 so that I can lift them on board. Figuring out ways to build stairs or kill myself to get huge logs onto the tailgate is pointless. Taking time off to recover from a back injury is more expensive than fuel used for noodling. opcorn:

 

[Dalmatian90]

What's the a rule-of-thumb design life for chainsaws?

For heavy equipment, I've seen 10,000 hours often as the magical number before a piece with ordinary use and maintenance is no longer fit for front-line use and is relegated off as a spare piece or sent to someone who only occasionally needs one.

Clearly I'd expect a pro-quality 360 to cut more wood in it's lifetime then a homeowner-quality 290.

And I'd expect a Dolmar 7900 to cut more wood then the 360, if only because it takes fewer hours to cut the same amount.

But I'm not sure I've ever seen any expressions in cords-per-saw for Joe Ordinary who does the normal maintenance, but isn't out tearing it down and rebuilding for fun every winter.