The most expensive raw material in most wood manufacturing plants is the lumber. Keeping a handle on the recently rising market and a steady supply are essential to staying profitable.
Decades ago, I was a Falconer, hunting the woods and fields of South Dakota with a Red-tail hawk on my thickly gloved fist. Being a poor student, I drove around the fields in a 68 Buick LeSabre, 4 door with the back seat ripped out. The hawk sat on a T-perch screwed to the floor and crapped in the car. I had no room (or money) for a the essential falconer’s companion, a birddog. No birddog, meant that I would push through every bramble, thorn or weed patch trying to kick out game for the Red-tail. The smarter falconers walked in the grass while their birddogs pointed or flushed game out for them. They took great joy in calling me “Birddog”.
When buying lumber from mills remember to require 8 ft tarps on any open trucks. The tarps keep the lumber dry while shipping from the mill to your plant. The truckers often don’t like to tarp loads when the weather looks good, but they really hate to tarp them in the rain. It is better to require the tarps from the onset instead of chancing a whole load of soggy lumber.
The lumber industry has a similar problem. There are hundreds of small sawmills, kilns and rough mills spread throughout the country. Each is cutting local timber, or drying and producing in their own particular way. They are the game hiding in the weeds and the best chance to control your lumber costs.
As I call on woodworkers nationwide, I often hear that they are buying or selling lumber at “mid-market”. Many use the Hardwood Market Report and Directory to verify their costs and establish their buy/sell price. Though the reports are good guides, they miss a lot of details that help keep your costs low. When demand is low, buying at mid-market is an excellent way to pay too much for your lumber. When the market is hot finding someone who sells at mid-market is hard. It takes a lot of time to really stay on top of when to buy lumber and when to hold back.
Lumber pricing is really based on supply and demand. The guides cannot tell you if the mill has been sitting on 5 loads of hickory they really need to move now. The guides miss whether the cash flow of the kiln is tied up in slow drying red oak and that they would be willing to sell green lumber this week to pay the bills. The guides never know what the real price is to volume users of lumber that buy on programs.