Speculation on next years market?

[flotek]

I guess it's a matter of what you value in life. I don't particularly care much for the newest cars, and the biggest house. If I could pay off a skidsteer while clearing out my undesirable trees (300 cords should do it), then this is a cash-positive proposition. I have 84 acres that need thinning. I have about 5 acres of that which need to be clear cut. So should I give away the equity on my land to a logger or should I cash in on it myself? To me, that's not even a question.

In all honesty, my dream job would pay 50K a year and give me 9 months off. Since I happen to abhor offices, and like working with my hands, getting into alternative forest products is a nice hobby along side my specialty manufacturing operations.

I have no desire or intention of ever getting rich. I wouldn't reject a good income, but it's a byproduct rather than the goal. IMO people who live for money don't have a life worth living. If I ever came into a chunk of money, I'd buy more land.

I would wholeheartedly agree with you
It really depends on what standard of living you desire in life . Firewood can produce. Income but limited to supply and demand and obviously very labor intensive . I love it but we'd starve if it was up to me to offer wood to the public for money . If you have the access and ability there's always some money in it and to some definitely worth it I know in my region We have a big logging and sawmill industry in my area . Bundled slab selling as little as 10$ a 3/4 cord bundle and triaxle loads of 5 cords for 350$ Delivered it's all.so cheap that you'd be hard pressed to get 60$ a full size pickup load at least here.

.

 

[Jim Timber]

I don't expect to make a lot of money with firewood, I just know that I can sell enough of it to make getting the equipment pay for itself. Remember, this is a side line to making high value lumber products.

If I produced 100 cords a year, and the average user consumed 3, that's only 33 customers drawn out of a market of hundreds if not thousands. If the market were as saturated as yours, it would be reflected in the prices. The wood itself isn't the value, it's the labor cutting and splitting it people here are paying for.

 

[dingeryote]

Jim,

Something to keep in mind.
A crapload of people were caught short on wood this season. Every seller is OUT here, and after two nasty storms last spring had them stocked up to an excess.

Propane nightmare is ongoing, and pricing wont return to sane for years if it ever does. Retailers will overstock to avoid problems and jack prices to compensate for fluctuation losses.

Oil isn't getting cheaper, and people have been dumping oil for Propane heat.

Obongo has essentially shut down Coal fired generating plants, and rates are climbing.

Plan on more customers than you expect. Especially once the snow is flying.
Folks always wait too dang long, and the sellers get limited by weather.

Your steady supply of raw product is an advantage.
When the other guys are out and folks are scrounging, they pay more.

Be prepared to sell the operation at the drop of a hat...you might just get sick of it taking up too much time.

 

[chuckwood]

Jim,

Something to keep in mind.
A crapload of people were caught short on wood this season. Every seller is OUT here, and after two nasty storms last spring had them stocked up to an excess.

Propane nightmare is ongoing, and pricing wont return to sane for years if it ever does. Retailers will overstock to avoid problems and jack prices to compensate for fluctuation losses.

Yeah, and it ain't over yet by a long shot. There's still lots more snow and cold coming! We just got a break down here in TN with a warm spell, and I'm getting depressed, I hate mud much worse than snow. But the forecast says we got more cold weather on the way so maybe soon I can go out and cut without gettin' stuck.

 

[Jim Timber]

It'll be interesting to see how the LP situation works out. I already have one buddy who put in a CB Classic yesterday. LP was sucking him dry. Too bad he's south of the metro a ways yet, or I could add him to my growing customer list. lol

I'm to the point where as soon as I have hard numbers on my basal area and some calculations on how much wood I want to take out, I'll have a solid basis for approximated P&L and should be good to go on financing. Unless I discover I have a lot less wood on the stump than similar stands average, there's no way I can't make this work.

Now if it'd only stay above 15 for more than a few hours at a time, I could roll up north and get to hugging my wood with a tape measure.

 

[spike60]

The demand is certainly going to be there next year. Many of us who cut our own obviously cut ahead, but people who buy wood seldom BUY ahead. They typically buy the same number of cords each year. If they ran out this year, they'll be sure to add a cord or two. And a winter like this hits the reset button on how many cords a person will need vs the last few mild winters.

As far as prices go, there's so much wood in this area that it never changes very much. It's always around the $200 mark. Never seems to go below $180 or above $225.

 

[autoimage]

last year I could scrounge off clist 3 days a week if I wanted. this year if you don't answer an ad within 20 mins its gone

 

[kodiak]

Being able to produce locally grown "green" (yes, I giggle with Dr. Evil laughs using that term) products has a certain appeal to these people, and they'll pay accordingly.

Don't forget to use the term "organic" in your advertising. That automatically raises the value of the product by 50%!!!

 

[Jon B.]

Ran into a fellow who owns one of our bee yards land. Has a 2000 SQ FT home and heats with propane. Said the propane company wouldn't deliver any to him till he was down to 20% and then they would only bring him up to 50% at over $5.00 a gallon.
told me he priced a Central boiler at a local dealer and they quoted him $6000 for it and the install and accessory's would be extra.

I swear that is way high, Seems like my best quote for a OSWB was 6000.00 installed.

Al

My CB 5036 was, if I recall correctly, around $6700 for just the boiler. With heat exchangers (3), ThermoPEX, inside PEX, fittings and such, I have around $10k in the whole system. I did everything but build the new furnace plenum, which was $300. The quote your guy got wasn't unreasonable, I think.

Five-dollar propane shortens the ROI from 5 years to 4, I think. That's a good thing.

If my source of firewood doubles his price, I can still afford it. Two times zero is still zero!! Having a neighbor (1.5 miles away from my place) with a tree service is a blessing! He dropped 4 trailer loads in my yard this fall.

Jon

 

[Sandhill Crane]

Pulled a dumb move last week loading a trailer. Lifted a rack, 1/3 cord over a 16" high rail. Then tipped the rack and all on it's side in the trailer. Sweet. The whole 1/3 cord, 4' h x 8' l x 16" lengths, was on it's side. The rub... I had one foot on the forklift tire and the other on the trailer rail. Dropping 1500 pounds 18" to 24" bounced the trailer and my foot slipped off. I caught the rail hard with my hip. Point being, things can change in an instant... and if I borrow money, it is not going to be a lot at a time that can not be covered else where. To move volumes of firewood I'm finding is no easy task in summer, let alone winter. My son is in banking. He asked me if my forklift has a title. No, just a bill of sale. Which is why equipment is seldom considered an asset that can be borrowed against because it is easy to sell and difficult for the bank to track. Anyway, numbers are just numbers. Process your woods without the equipment the first year, then you will know the market better and also your needs. Say you only do 30 to 50 cords. Not much money, but a lot of knowledge to be gained from cutting, processing, marketing, and delivering. Rent a machine with tires or tracks and see if it is really a fit. I have a piggyback forklift. Lifts 3/4 cord with ease, and hardly moves in the snow with industrial treads. I thought it would be a great fit. Now I'm not so sure. A bobcat would lift less but prove more versatile for me. And, it will be years before firewood pays for it, and the other equipment. A couple kids pulled a trailer in for a cord of wood. Didn't stand on the rail this time. Tipped three 1/3 cord racks on, in maybe ten minutes time. He says, "You have all the toys!" What he didn't see is the four years preceding that ten minutes.

 

[Coldfront]

Not sure what is going to happen but I know a lot of people who burn wood are going to stock pile plenty for next winter. Then if we have a warm winter there won't be much sales next mid winter. As far as propane prices go people are going to start switching to electric heat if prices don't come down and quick. My electric co. is already advertising off peak electric heating plan that comes out to about the equivalent of $1.80 Gallon propane. I will be expecting a warm winter next year, this year is just a fluke.

 

[zogger]

Several contrarian scientists and researchers have been saying for years now we are headed into a new mini ice age, not generic warming. Who knows...we will when we get there

This winter has been nasty, with some dashes of brutality to it.

I say,l stack, stack, stack some more. If you can't sell it this year or next, the year after. We still have access to affordable liquid fuel, and this big propane shortage/price gouging episode is for sure freaking people out. We can't get propane here to run the farm! There is some at the distributors, at inflated prices, but no means to transport it, all the big trucks are up north/midwest.

My boss has been clucker farming since the 50s, said this is the first time he couldn't get bulk propane, and he buys quite a bit. The big clucker company, who also have their baby bird growers, the hatcheries, are having to cull brand new hatched birds by the zillions, because no place has the propane to heat the floors to allow the bitties to live. The packing house will be slowing down laying off soon, as the last flocks get brought in.

Polar vortex economic disaster. Seriously, at least around here.

I asked him, hey, I can go on secret double time cutting wood, mass quantities, using the big equipment here, loaders.excavator, like that there, combined with litter you produce, maybe we can do some wood boilers for heat? He said he already penciled it out, doesn't have a spare million bucks right now to do that.

 

[flotek]

The high oil and propane prices have finally hit our rural area there's rationing and doubling of the cost . Not sure if guys will sell more firewood but it's probably a safe bet People are going to be buying up woodstoves and chainsaws that never burned before . Imagine if you were a older senior citizen and living on 900$ a month off your social security and your bill to heat your place Is 550$ a month now for the first time You have to decide if your going to eat and get medications ..or heat your house. . How sad that's happening in a rich country full of resources . I thought that's why we have an energy department in this country to monitor these things . I know a 65 yr old lady who can't even find fuel oil in her area to buy ..and she's almost out

 

[Jim Timber]

How much heat do the chicks need?

 

[zogger]

The high oil and propane prices have finally hit our rural area there's rationing and doubling of the cost . Not sure if guys will sell more firewood but it's probably a safe bet People are going to be buying up woodstoves and chainsaws that never burned before . Imagine if you were a older senior citizen and living on 900$ a month off your social security and your bill to heat your place Is 550$ a month now for the first time You have to decide if your going to eat and get medications ..or heat your house. . How sad that's happening in a rich country full of resources . I thought that's why we have an energy department in this country to monitor these things . I know a 65 yr old lady who can't even find fuel oil in her area to buy ..and she's almost out

This is a serious question I don't know the answer to. Can you burn like filtered waste oil in an oil furnace? I have seen a modified drip burner that added to a wood burner before, a real redneck job but it worked. Just wondering if waste oil might be an option for folks like your old lady friend there.

 

[zogger]

How much heat do the chicks need?

Floor temp around 90 something before they are brought in. They use crank down brooder heaters for that. Now there is big heat loss because you have to run vent fans as well, else not too long and all the air is used up and they start croaking. There's really no money raising them in the winter, they just do it because there is a year round demand for birds and they need to keep the farmers they hired working. The farm owners sorta break even sometimes summer and winter, because the two extremes cost more in energy, and make some during low energy demand spring and fall, so any year the net profit is on that spread. Ongoing and incidental costs are hugemongous sometimes. he just had to have two diesel gennies repaired, small five figures. Stuff like that, incidentals.

 

[Jim Timber]

^ It's stuff like this that makes me ask what some folks on this site seem to think are dumb questions, and then mock me for not going full-blown industrial complex on what's effectively a zit on the landscape of the market.

Deep pocketed established operations that barely make it year in and year out.

I'd rather "slum it" and get by, than go whole hog right down the bankruptcy toilet.

 

[flotek]

The bigger the operation the bigger the risk and bigger the headaches

 

[zogger]

^ It's stuff like this that makes me ask what some folks on this site seem to think are dumb questions, and then mock me for not going full-blown industrial complex on what's effectively a zit on the landscape of the market.

Deep pocketed established operations that barely make it year in and year out.

I'd rather "slum it" and get by, than go whole hog right down the bankruptcy toilet.

It's primarily run as a cartel, and the farmers over the years had no choice but to go along with it. There's only like I think five? big outfits that hire farmers as the contract growers. they all pay almost identical, take it or leave it. it costs a huge amount of money to have processing facilities and run them, so only a few can afford it, for individual farmers it is wayyyy too expensive. . Then you have the buyers cartels who ultimately buy the birds from the big processors. There are about a grand total of six big buyers in the nation, they dictate prices, kinda sorta almost like how walmart dictates to their producers. That's the huge supermarket chains and the fast food buyers. And that's it, all the other poultry biz is small potatoes.

I think it is like firewood (which is ag), stay real small, or go huge, that's the only way to make coin with any sort of ag stuff.

 

[Jim Timber]

Yep. I just want to go big enough to not break myself in the process.

Does a firewood buyer care that I used a shop-built processor worth $3K in parts instead of a cord king for (not even sure how much those things cost)? I doubt it.

Does a timber buyer care that I used an atv to skid the log instead of a forwarder? The log is still worth the same either way.