Diversifying Farm Operations with a Sawmill
by Dave Boyt of Neosho, MO
Diversity is a mixed bag. On one hand it can mean a more consistent income. If low prices, uncooperative weather patterns, or other factors slip the balance sheet into the red, a secondary source of income just might be able to tide the farm over until better times. The ideal secondary source of income should have several features that make it suitable for an agricultural operation.
An additional farm operation should allow you to work at it when your schedule allows, but not demand your attention when you don’t have time to spare. To the extent possible, it should make use of your skills and equipment. You are probably already an expert at operating and maintaining gas engines, belt drives, hydraulics, conveyors and winches. Your tractor, flatbed trailer, and 4×4 pickup truck no doubt, do multiple tasks around the farm. Additional equipment should be able to pay for itself in a year or two, even if it is only used three months out of the year.
A small sawmill is an ideal diversification for some farming operations. The investment ranges from $4,500 to $50,000, depending on how much production you plan on, and how much help you will have running the mill. Small mills in the $4,500 – $10,000 range are ideal to start out a sawmill business, either part time or full time. At about 1/3 the price of a new pickup truck, the investment is reasonable, and they hold their value well enough that you can recover most of the cost if it doesn’t work out, or if it works so well you decide to get a higher production sawmill.
Running a sawmill also provides you with the opportunity to produce your own building materials. For example, a 2”x 10”x 10’ pine board costs about $14.00 at a lumber yard. In one workday, you could produce 75 boards of this dimension, worth over $1,000. The lumber can go to your own use for barn construction, trailer decking, siding, or sold to area farmers, construction companies and woodworkers. Some of the stable markets for lumber include railroad ties, blocking for heavy equipment, flooring, and pallets.
Small sawmills have changed over the years from circle mills with their exposed belts and blades, to safer, more efficient machines. Band sawmills are the most common type of small sawmill, and are well-suited to farm use. They use a horizontal band saw blade powered by an engine from 9 to 50 h.p. Unlike the old-fashioned circle mills, the log stays in place on the mill bed, and the engine and blade ride on a carriage down a track to cut the log. Adjusting the height of the blade sets the board thickness. The blade and drive belts are safely tucked behind guards, and the engine typically produces no more noise than a small tractor. The most dangerous part of sawmill operation is running a chainsaw to trim the logs.
With the variety of mills and options, there are opportunities for milling operations ranging from occasional use for lumber on the farm to full time production. Small “manual” sawmills typically range from 9 to 25 h.p. and cost less than $12,000. These mills require the operator to load, turn, and clamp the logs by hand or with a tractor. The sawyer also provides the brain and brawn for adjusting the blade height and pushing the blade through the log. These mills are simple to maintain, inexpensive to operate, and are capable of impressive production. Manual mills are well suited to be run by one or two people. Hydraulic sawmills use the mill’s engine to run hydraulics for log handling and cutting. The more advanced models have computerized setworks that automatically set the blade for the desired board thickness. These are higher production machines that are best run by a crew of two or three people.
Opportunities and costs will depend on the situation. If you have your own woodland, the cost may involve your time to cut and haul the logs to the mill. It is often more cost effective to hire a logging crew to cut and deliver logs to you so that you can focus on the milling part of the operation. Even if you purchase logs cut at another location, the mill can still be profitable. The cost of logs delivered to the mill will vary, depending on the type of logs, trucking distance, and lumber prices. For the sake of this article, let’s assume a cost of $.30 per board foot lumber delivered. Although there are several ways of scaling logs, assume that you are able to cut as much lumber from the logs as the scale indicates. In reality, you will be able to produce between 15% and 50% more than the log scale. Milling costs include $12.00 for three gallons of fuel, $30.00 for band saw blades, and $2.00 for maintenance. Other equipment cost — tractor and loader, truck, and chainsaw add roughly another $20 per thousand board feet. If you cut 1,000 board feet per day (conservative for one person working 8 hours on the sawmill) and sell the lumber for $.80 per board foot, the numbers for a day of sawmilling look like this:
Cost of logs: $300.00
Milling cost: $64.00
Taxes & insurance: $50.00
Lumber income $800.00
Profit: $386.00
At that rate, milling 50 days a year would add $19,300 to the farm income.
These numbers are based on oak lumber typically cut in the Midwest. Pine lumber will have different numbers; the cost of logs and price for lumber will both typically be lower, but you will be able to cut more lumber in a day because the wood is softer. Log and lumber prices vary, just as with any agricultural commodity.
Tony Word of Beardon, Arkansas has found that investing in a sawmill has been a good fit for his hay and beef cow operation. At the time of our interview, he had been running a Norwood Pro MX34 band sawmill for about a year. “I cut around 50,000 board feet of pine and cypress since I got this mill,” he explained. “I’m real pleased with it. It cuts a smooth, straight board.” His sawmill is equipped with a 23 h.p. engine and can handle logs up to 34” in diameter, while burning less than five gallons of gas per day. While Tony chose a manual sawmill for its low initial cost and simple operation, he says that he is considering adding the hydraulic log turner to take some of the effort out of the operation.
Tony decided to purchase a band sawmill after watching a neighbor run his. “I liked how easy it was to use,” he explained. Tony has found that his mill makes a good family business; his 24-year-old son Billy is the main mill hand, but his other children also help. With his kids running the mill, he took special note of the safety features. The operator’s position is behind the blade, clear of any debris that might be thrown out by the mill, and the blade brake stops the blade within a few seconds any time the sawyer takes his (or her) hands off the controls. According to Tony, typical production is about 2,000 board feet per day with Billy helping. His biggest cost is the sawmill blades. “Usually I go through two blades a day if I don’t hit any metal in the log”, Tony explains. He sends the blades to a sharpening service, and gets four or five sharpenings before replacing the $30 blade.
Most of his cypress is sold to home builders for board and bat siding, though he mills for his own projects, as well. “I milled the lumber for the mill shed and barn,” he told me, “and I’ve a couple more buildings I need to get started on.” Tony, Billy, and their mill manage to keep up with the lumber demand. “It’s held up real well for what I’m doing. If I can sell it, I can get it cut,” he concluded.
A great way to get acquainted with portable sawmills is to watch one in action. If possible, visit a local sawyer or, better yet, have one come out to your location to cut some lumber. It will give you a good chance to ask questions. Most are more than willing to share their opinions, but my experience is that if you ask four sawyers, you’ll get a dozen different opinions. Manufacturers’ websites have machine specs, as well as knowledgeable people who can answer questions. Most can refer you to a sawyer you can visit or call. There are also some great sawmilling websites.
Bio: Dave Boyt has a degree in Forest Management and manages a family tree farm near Neosho, MO. He is a certified logger, and has been running band saw mills for twelve years. Dave is a frequent contributor to Sawmill & Woodlot Management magazine, and a writer for Norwood Industries.