Why mills don't think the price of lumber is too high

By Marlr Junklns Mill Sales Manager McSban LumberCo.

CIINCE the buyer and the seller are often at odds over the \Jvalue of any product in any market, the complaints we often hear about the "high" price of lumber are understandable. The saying "where you stand depends on wbere you sit" applies to mill sales people and lumber purchasers. We rcalne you place a value on our product based on how much profit you can make ftom it. We place value on our product based on what we can get for it, but we are also very much aware of what it costs to make iL

Lumber to some people is something you talk about over the phone or numbers on a computer screen. For those of us who see it made every day though, it is a tangible item with a lot of work, sweat and capital in it. This is our story. Allow us to outline, in an abbreviated version, the steps involved in making a piece of lumber.

(l) First and foremost, a tree has to grow for 25-30 years to make a saw log or 50 years to make a good grade log.

(2) A tract of timber has to be located. It is either offered to us or we approach the landowner.

(3) The timber then has to be cruised to detennine the volume. This means someone has to walk over every acre of the Eact whether it's 40 acres or400.

(4) Once the volume has been determined, a price has to be negotiated, eittrer directly with the landowner or through a sealed bid. Then timber is actually purchased - often with a large lump sum payment. The interest clock starts ticking.

(5) Next a logger has to be contracted to haul it. Then the timber is cut, limbed, skidded to a loading ground, sorted by species and grade, loaded and hauled to the mill. If you've ever been in the woods in Alabana on a July morning, you have some appreciation of what this requires.

(6) At the mill logs are weighed or scaled and unloaded by some type of large, expensive equipment. They will either be stored or sent directly to the mill.

(7) In the mill the logs are precisely sawn into lumber by bandsaws, edgers, resaws and rimmers that are controlled by lasers, optimizers and computers which take a tremendous amount of energy to operate.

(8) Next the green lumber is sorted by thickness and properly stacked to go into the dry kiln.

(9) Drying lumber is a fairly basic procedure but keep in mind that it requires more energy to make it happen.

(10) After the lumber is dried properly it has to be taken off sticks. Then it must be hauled to a storage area to await dressing at the planer mill or it is taken directly to the planer mill.

(11) At the planer, the lumber is surfaced and graded. It's easy to forget that grading lumber meiu:ls someone has to look at every piece.

(12) After it is dressed and packaged for shipment, Oe lumber is sometimes held in inventory for a while, costing more interest. Then it is finally picked up one last time by another piece of expensive equipnent, loaded on the truck and invoiced, and credit is extended to our customer for a few days before the lumber is actually tumed into cash.

Please indulge the mill sales people when they complain about dimension lumber prices falling. We're not a grouchy bunch by nature. We've probably just talked to a logger who had to spend $1,500 for a skidder tire or heard from the timber folks about how we were beat by $50,000 on a tract of timber.

You rny not agree, but maybe this will put our side into penpective: at $520&I, a{2 2xl2xl6 will cost you $16.64 per piece. This lumber would probably be cut from one of those 50-year-old logs we mentioned. In a decent restraurant, a good steak, which would probably be cut from an 18monthold steer, would also cost you around $16.64. Which should have the most value?