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Thursday, 31 March 2016 13:43

Elements of Hardwood Lumber Pricing

Do you know of all the different stages hardwood lumber goes in for manufacturing?  Many do not.  It can be quite interesting to think about how lumber goes from the forest to the manufacturing plant.   And when you add each phase together you can get a good picture of how the key elements that go into the hardwood lumber pricing.  Here is a good summary.

Timber to the sawmill –  From the time a forester is asked to visit a tract of land to be harvested and select the trees to be cut, to the time a logger fells, de-limbs and bucks the tree for transportation to the mill, costs are accumulating.  The prices for these types of activities vary, however, either a lump sum payment for the entire job or a price per unit harvested by volume, species, and grade is applied.

Logs to boards – At the sawmill hardwood logs are transformed from round tree trunks to flat boards.  Debarking, sawing into various thicknesses and edging takes place.  The boards are made square and then categorized by size, thickness, gradeBoonville 092015 and appearance. Many variables impact the process at this stage including the cost of logs, man power and machine operating costs.  Totaled this can represent up to 50-70% of the final hardwood lumber cost to the customer.

From Green lumber to kiln dried – Moisture within hardwood lumber needs to be removed before it can be used in most consumer products.  This process is referred to as the drying process and can be a combination of air-drying, (lumber in stacks on sticks in the open air on the yard),  pre-drying, (the use of sheds, fans, vents and baffles to control air flow), and kiln drying techniques, (climate controlled heat treatments with specific humidity levels and air flow). In most cases the goal is get the lumber moisture content down to between 6-8%.  The lumber drying process can amount to another 10-20% of the total lumber cost.   

Grading, sorting and packaging hardwood lumber – This is one of the most labor intensive stages. NI this stage suppliers properly account, value and prepare the lumber for shipment to their customers.  These activities take place in the lumber yard and enable the hardwood supplier to prepare the different hardwood lumber products for sale. 

Adding Freight – Transporting lumber from the the hardwood lumber yard to the customer destination can take many different forms.  Flatbed truck, rail car, containers of oceanic vessels, they are all used in one form another. Costs are based on distance and mode of transportation.  They vary based on time of year, demand and the price of fuel and labor.  All this to say that an average cost for transportation cannot really be stated. It is best to obtain an exact quote at the time of order. However, in general the cost for transportation could total up to 10-20% of your total lumber purchase.

Hardwood lumber suppliers can also offer additional value added services that can add to the overall price of a load of hardwood lumber.  Services such as custom sorting, ripping, and surfacing are just a few services that can add hundreds of dollars to the per thousand dollar price of lumber.

Good thing we have a strong set of industry journals and publications that summarize hardwood lumber pricing averages and trends. These can be valuable resources for those looking to better understand the market.

The hardwood lumber industry is one that is impacted by the natural laws of supply and demand so it makes sense to develop a strong working relationship with a reputable hardwood lumber supplier to help you manage the ebbs and flows. If we can be of any assistance please let us know.

American Lumber

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Last modified on Thursday, 07 April 2016 17:43