This bulletin reports on School of Forestry Research Project 120, 'Timber Crop'--P. [2].Digitized 2007 AES

O'Neil, W. J. (William James)

University of Missouri: MOspace

RESEARCH BUlLETIN 685 JANUARY. 1959 UNIVERSITY OF MISSOURJ COLLEGE OF AGRJCULTURE AGRICULT URA L EXPERIMENT STATION J H. LONGWELL, Director Selling Mill-Run and Graded Oak Lumber W.J. O·NEII. (Pub!ica,ion ~u. hori z"d J~nuary 2~, 1959) COLUMBIA, MISSOURI FIGURE I-Log I il CI ,ull b ecClule knClIi CI.e spClced len ,hCln 2 ' .e' Clpa". log 2 is a No. 2 lag bKaule It hal one cleo. fa ce. Its quality is lawe.ed by a bull fI.e K CI •. CONTENTS Merhod o f Scud}' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Char;u:r«is[ics of [he Mills . .. . . . . . . . . . . . . . . . . . . . • . . . . . . • . . . .. . . . 7 Results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ..... .... . . .. 10 Sumnw.... . ... ...... .. .......... .. ...... .... .... . . .. 15 Glosnry .. . ....... . ....... . ..... . ..... . . . ....•.......•......... 16 Thi5 bu lLetin reporu on School of f orestry R~elIn: h Proj«< ilO, "Timber Crop" Selling Mill-Run and Graded Oak Lumber W-J O'NEIL Many (KtOes determine the ,moun, of profit that" manufacturer wil! derive from the sale of a produCt. Some of these ~re efficiency in manufacturing. mark· et siability. demand for produCt, volume of product for sale, the buyers' and sellers' bugaining power, and method of selling. The producers of hardwood lumber in Missouri_small sawmill operators-arc confronted with" number of disadvanugcs in earning ~ maximum profit on their produce. Their operations ,He small-few mills CUI 1S much as 10,000 board feel per Jay. The labor fo= is often lr:lnsicm lIld no! skilled; (herefore, bbor ef· ficiency is Iikdy 10 be low. Equipmenr is fre<juently old and in poor adjusrmem. Lumber produced orren is inferior because i1 is (00 lhin. tOO thick, or otherwise mismanufacrured. The hlrdwood lumber market is unstable; it follows closely the trend of construction. O~k lumber, the chief type of hardwood lumber produced in Mis· souri, has rather restricted use- chie fly for flooring and tough constronion. T here is no organ i~ed marketing through an 1SSQ(iation or through (on· Cenn'2tiOn yards. Individual sawmill owners genet1l11y sell their lumber directly !O flooring mills, building coarranors, .nd other users of hudwood lumber. MoSt of the lumber is sold as t2pidly as it is produced ~s "mill·ron" or without segregation by grades. A few mill owners grade their lumber and sell it by in· dividual grades and some lump twO or more grades together and scI! it by these broader categories. In ~cent ye:l.rs there has been a growing !tend toward selling products by grade. This ryp<: of merchandising is gener-ally mo~ profitable to the seller be· nuse consumers will P'lY ptemium prices fOf the better grades of ptoducts. If this principle would apply to oak lumber, its producers would find it advantageous to gr-ade their lumber. A study was initiated in 19~~ to determine the merchandising method that would retum the greatest profit to Missouri pro· ducers. METHOD OF STUDY After studying the op<:rating methods of several mills, three which opcr-ate rather tegularly and whose owners were "'illing to cooperate were seleccC<J for this investigation. The logs from which the lumber was recovered were scaled on the log dcek by the International 'A·inch saw ketf log scalt fule. Th~ volume of unsound de· fects (unuseable for lumber) W2S deducted from ,he gross volume of each log. Each log was also graded (Fig. 1). FIGURE 2 LOG SCALE, LUMBER TALLY AND OVERRUN FOR THE THREE MILLS. OVERUN PERCENT LUMBER T"'LLY B<1. It. AVE. 3 MILLS 13,921 Six ht.lndred ninec)"-()ne log$. with 1 gross sale o( 4l.nO bolrd f~r. a cull of 24~5 board feet (~.92 percent). and a nee sale of 38.69' bow:! feet. "'etc in· cluded in [he s.ud~·. These logs yielded 41,764 b«1td fee. of lumber. The dif· fetence of 3069 b«1rd f~, be,"'een log and lumber sale giv~ an overI\ln of 7.9~ pcr<cnt (Fig. 2). FIGURE 3_A pile of mixed lumber showing boards (I I. dimensIon (2 1. and timber P ). Overrun \'lIried from 6. ~4 to 10.09 percent. The high overrun for mill num· hl:r 3 spelks well for the efficiency of this mill because cutting of dimension lumber and limbers tends to increlSe overrun and yet chis mill CUI the leul volume of chese classes of material. (See Table 1). EKh bmrd WllS gl1lded and me:iSlired ( Fig. 'J. Using ils dimensions and a llimber 11111)' rule. ilS volume in boud feec \Y:I.$ recorded. The boards I"ere gnded lS the)' orne off' lhe sa ..... The po5sibi lil), of up-gn.ding J board through edging lIr trimming W1S not laken imo aCCO lint. 5I:oors 4 and 6 feet long and .j4·inch thick were manufactured 11 one mill. The v1l.ue of the lumber produced at each mill 'NU com pUled to secure a thevreliC'..u value for the lumber if it had been sold by gtl<k. Currem prices for the va.rk~lIs grades of lumber were used. 6 ~~~~~:~~~~~~~~~s 8 "';"';"';";";~"';~~dddd"';'; ci _ .. __ 0 ----.,." ... " • ... -.., ........... • • ,.;.,.:.;.; .. ...:,..: • ---...... "'0 .......... 0 • -01 .. _ .. _ .... -• ... "' ...... "" ..... ----." «>"' .... -~$ .. ... .,"' .. ., ,-_r-_", _ ... "'0 ...... ,-o..;...;..;,.;,,;g ";";';0"'; , . -. ,-... .., .......... 0 '~ ... ;:!l ...... , . -''''''';is--• co "'0 .. -.-. .... -, •• , , 2 <H~ :£ tfl 8 'HJ ~ :g ocio..;,,; ... .,;,,;.·. -. '-0-,--:"';"d .--:0;:;::2 -g !i -" -- 0 -g !i -0 -" -g !i -Rl:sl!AllCH B Ul.I.ETIN 685 7 CHARACTERISTICS OF T HE MlliS Mill number I was a Cork)' mill ~uipped with a ~2·ineh inserted tooth eireubr saw. Ir employed seven men. This mill had rhe leasr lost time-n.2 percent-and produco:llhe mo~r lumber per day-80S Ixw-d feet per hour. The mill oper:l.lOl' sold his lumber 15 mill run. Mill number 2 was 1 Fisher· Davis mill equipped with a ~2·inch inserted rooth circular uw. lr emplo)'ed ~ men, who appeared 10 be less skilled rhan those emplo)'o:Iat the other mills. This mill had H percent lou time and iu production W2S H9 Ixw-d feet per hour. lr uwed more thin lumber Ihan the (Kher mills. lbc lumber was sold b). in· divid ... ~1 grades. Mill number 3 was 1 Cork)' mill ~uipped wi th 1 '6-inch inserted tooth circulu SIW, It employed !e,'en men. This mill h~d 3~ . 7 percent Iusl rime. lu production was 629 Ixw-d feet per hour. lumber ""15 sold u mill run. The aven.ge width of rhe boards sa""ed was 7.24 inches ( Fig. 4). All mills produced more a·inch lumber than other widths (23 10 4; percent). however f iGURE 4 WIDTHS PRODUCED BY THE THREE MILLS. WlO1HS ON INOtIS 7 , .. , .. '" 10" 12" I." 16" Mlll3 , .. . " , .. 10" 12" 1." 1'" 0)'2'110 8 M ISSOURI AGRICULTURAL EXfUIM£NT STATION .. .. .. ' 0 '0 o FIGURE 5 LENGTHS OF LUMBER CUT BY THE MILLS. FIGURE 6 THICKNESS OF LUMBER PRODUCED BY THE MILLS . THICKNESS OF LUMBER RJ\sEARCH BULl.ITlN 68) 9 there w:lS ",.de var'at'on in the propOfl'On of var'ous widths produced by the three mill s. The disttibulion of lumber by lengths is shown in Fig. ). More than one:· third of the lumber Cllt W1li 8 feet long; g. and 12·ft.x>t lengthS malk up nearly M percent of the CIIt. Si:<tY'I"'o percent of Ihe lumber produced "'1$ 4/4 nr thinner, but ~mong mills the pcrccntage$ ranged from 40 to 90 (f ig. 6). Timbers were rut only at mills number 1 and 2. They constitllred only 3 106 percent o( the lonl. Mill number 1 produced a high proportion of dimension lumber-nearly )7 percent. " MlSSOu.J AOllCULruUL ExPUIM!ST STATlOl' R ESULTS The ~mO~'H of lumber of \'~riou, gndt's ( Fig. 1) prociuced b)' .he tht«-mills is sho,,'n in T~ble I. The ,clar;".:]), poor gr:ade of lumber produced is evidenced by ,he f~C{ rh~r leu lh.n 17 percent of rhe lumber consisted of No. I Common :md bettCf. Mill number 3. wilh over \1 pcrccm of sekcts and natly 2~ pacent of No.1 Common and bene •. produced the hr~! volume of higher· grack lurnlxr. bKI .crimming of lumber 'O...,,,ld luvc incrcned the yidd of higher· gr:lde lumbu. The ,~lue of the lumber produced by mills number I and 3 if it had ~n 50]d b~' grade: is sho ... ·n in Table 2. The avet'llgc Y1lJ~ per rhou~nd bo:.Ird (ttl TABLE 2· ·THE NI1MB£R 1 AND 3 nr'!' 115.00 56.13 " ..... 115.00 50.80 Selects 85.00 '" 12.84 '" 35.11 No. 1 Common Board. 72.00 .  5t.at 1122 123." No. 2 eomll1On Board, U.OO 1334 17.37 1816 u.n NO. S A Common BOud. 40.00 1888 75.56 2675 107.00 NO.3 B Common Soud. 30.00 3323 99.69 3.70 104.10 NO.1 Common Dhnenllon 72 .00 "'" 9S.04 NQ. 2 Common D!men.lon 58.00 "" 326.80 NO.3 Common DJ_"llon 3S.00 5382 188.37 ". 20.23 Mill Cull, 15.00 1028 15.42 ... It. 18 ToW. "". 981.16 12413 81$.84 of {he lumber from mill nllmber 1 is $45.82 and {h~t ftom mill nllmber} is S49.}6. The higher aveno.ge VlIlue of the Illmbet from mill numbCT 3 rdkeu rhe higher "Iudi,,' of the !lImber from rh~t mill. Sin(e there "":IS no es r1blished market in Mi$SOliri from ",hich prices coliid be secured. prices "'ere obnincd from the three mill opcno.COts. The three mills sold their llimber on different bues. Mills 1 and 3 sold mOSt of thru 4/ 4 lumbet miU-n.lII, with the exception. of FAS and 3 B Common, .. d lich "'etC sold on gno.de lonlly. The dimension and limbers wcre sold 1$ ."""nd or IInsuund. The mill·n.1II ptice WlIS established br using the gno.de prica sho .. '" in Table 2. Mill number 2 sold its llimber br grade. The common p!":lctiC(: of Missouri saw milb in disposing of nak llimbet is to $l:ll it to flooring mills. They will nOI I~ke grades lower than 3 A Common, and prefer not to me 3 A Common. Table 3 shows the vallie of the lumber from mills 1 and 3 lnsed on aeroal we. The VlIlues are $52.24 and $)2.« per IhOIWnd board feet, respectively. The • ~, " .', \ , : ~ , , I ;~ -figure 7_Five grodes of lumber: ( I ) Second {21 No. 1 Common t3 1 No.2 Commo,; (4)No. 3 A Common .(S ) No. 3 B Common. -< -1 , " • .. MISSOURI AGRICULTURAL EXP£JIIMENT STATION TABLE 3--VALDE OF LUMBER FROM MILLS NUMBER I AND 3 BASED ON ACTUAL SALE . Price per Lul'ilbfir Grades Volume M. Bd. Ft Value Bd. Ft. Dollll.rs DOl~rs Mill Number I FAS and Select .. '" 100.00 2~.30 Number I COmmon Boards ". 10.00 5<1.03 Number 2 and No.3 A COmmon Boards 3,223 50.00 161.65 Number 3 B COmmon BOllrds 3,323 35.00 116.31 Dlme nston and Timbers 12,333 57.50 709.15 Four Foot Scoots '" 20.00 6.10 Six Foot Scoots '" "'.00 17.37 Mil! CUll .. ". 15.00 '.00 ToW. 20,979 $1095.97 Mill Numbe r 3 3 A and Betler 7, 441 "'.00 446.46 Sound 3 B common 3,470 50.00 113.50 Unsound 3 B COmmon '" 25.00 14.(5 Mill Culls ... 20.00 19.68 To"'. 12,473 $554.09 actw.1 sale based on mill·run price produced more income th~n the theoreticrl sale b~sed on grade ( T~ble 2). For mill number 1 the difference "'"2S $6.42 3nd for mill number ,. S~.08 per thousand boltrd feet. Tlble 4 gives ,he wlue of the lumber produced by mill number 2 .... hich .... as sold b)" ;ndiv;du~l gr,de. The ~verage return waS 546.98 per thousand board fcc,. TABLE 4--VALDE OF LUMBER FROM MILL NUMBER 2 WHICH WAS SOLD BY GRADE. Price Per Lumber Grades Volume M. B<I. Fl. V"~ Bd. Ft. Dollars Dollars Firsts " 115.00 1.50 Seconds ". 115.00 17.02 Selecu " 85.00 8.25 No.1 Common Boards '" 72.00 69.48 NO.2 Common Boards '" 5<1.00 34.92 NO.3 A COmmon Boards 2216 «>.00 88.64 No.3 B COmmon Boaro. 2510 "'.00 75. :JO NO.2 Common Di mension .M ".00 26.68 No.3 Common Di menSion '" 35.00 27.83 NO.1 common Timbers '" 125.00· 32.00 No.2 COmmon Timbers " 58.00 UO No.3 Common Timbers '"' 35.00 3.57 Mill CUlls " 15.00 1.1 4 ToW. 8312 $390.51 • This was special Umbers cut tor a cburch. 'I1ley were 8"" 18" _ 24' . Because or their 51"" a special price ""'s pai<l R!.s!AIlCH BUllEn:.' 68~ FIGURE 8 Price Received for Lumber at Mill Per Thousand Bci, Ft. 151.23 "'." Mill 3 AVERAGE OF 3 ~ LlS The value or ,he lumber (rom mill number 2, if it had b«n sold 11 Ihe prices paid for mill n\lmbcr I or 3 I\lmbel, is shown in Table ~. A retllm of $3.% Inc! $2.~'" mOfe ""O\Ild hive b«n lealized 1,IIldcr these cirruftUWlCes. The lo'al value of the lumber from the three mills, based on prices paid for individual gndcs. is shown in Table 6. The avenge value per rhousand board f«r is $47.02. Figure 8 shows price per thousand board fcct received. for ,he lumber F. O. B. mill It ach of the mills. It is evide!l1 thlt producers of hardwood lumber in Missouri would nOt realize greater profits by selling lumber by gn<!e. AClw.lly they would stand to loS<': beaUS<': ,hey ate :lCt\I.ally realizing I greater tctIIm b)' S<':lling mill-tIIn hun-beT and they lfe c1iminlting rhe cos, of gmding lhe lumber. This sitllarion ftU)· be due in part 10 ,he faCt that such a small portion of the IUmbel produced is " MISSOURI AGRICULTURAL E XPERIMENT STATION TABLE 5--THEORETICAL , Grades Volume ". Value Bd. Ft. Dollars Dollars FAS and SelectS 25,80 No. I Common Boards '" 10.00 67.55 NO.2 Common BoaNls and NO.3 A Common BOards 2818 50.00 140.90 NO.3 B Common Boards 2510 35,00 87.85 Olmension and Timbers 168S 57.50 96 .89 Mill Culls '" lS.OO 1.I4 Total 8312 $420.13 Value Bued on Mill Number 3 P rices 3A Common:lnd Better 5426 60.00 325.56 Sound 3 B Common 1010 50.00 50.50 Unsound 3 B COmmon '''' 25.00 45.00 Mlll Culls '" 20.00 1.52 ~,," 8312 $422.58 TABLE 6--VALUE ON PRlCES Gndes Volume M. B<I. Ft. V"~ Bd. Fl Dollars DOUU8 Firsts '" 115.00 63.25 Seconds no 115,00 82.57 Selects '" 85.00 56.19 No, I Common Boar ds 3516 72.00 253.15 NO. 2 COmmon BOards 4084 58.00 236.87 NO.3 A CommOJl Boards 6779 "'.00 271.16 NO.3 B Common Bouds 9304 30.00 279.12 NO. 1 Common Dimension 1277 72.00 9}.9 4 No.2 Common Dimension "''' ".00 29<1.58 No.3 COmmon mmen.lon 6680 35.00 233.80 No.1 Common TImbers '" 72.00 21 .52 No.2 Common TImbers '" 56.00 36.02 No.3 Common TImbers '" 35.00 6.20 Four FOOl 5<::0018 '" 20.00 6.10 Six Foot Scoots '" ».00 17.37 Mill Culls 1204 15.00 lS.06 ~W. 4l7e4 $1963.90 of high qu~lity. u.ck of mong competition among buyers of rough lumber may be ~ contribut ing factor also. Until the market structure or consumer demand changes, nwmill 0PCl1ltots will find it most convenient and profitable to scll hardwood lumber by mill-run. R!iS~ARCH BULUTIN 68~ " SUMMARY Three small sawmills which produce largely oak lumber were studied (0 derermine rhe rel uh"e meritS of selling lumber by gl1ldcs or mill-run. T wo of the mills sold their lumber as mill-run, rhe Ihird mill sold by grack. Six hundred ninery-one logs which yielded 41,764 board fca of lumber were indudo:l in the study. Each piece of lumber produco:l from Ihese logs was grJded and measured so Ihar irs board- fOOl volume could be «lmputm. The acrual income derivm from Ihe sale of Ihe lumber was recorded. When Ihe lumber wu nOI sold by gl1lde, Olkulations were made of ils value if il had been sold by pc, using pti(C$ being paid for various gr:r.dcs.. The 11010 mills which sold mil!_run lumber received avenge prien p(r lboo-sand board feet of U2A4 and $'2.24_ T he mill which sold graded lumber re-ceived an average pt"iee of m98 per thousand board fca. If the twO mills which sold mill_n,m lumber had iiOld thar lumber by srade Ihey would have received $4~.82 and $49.36 per thousand board fCCI, Icsp(Cl ivel y. Under present m:lfk~ conditions producers of hardwood lumber in Mis50uri :lfe realizing the best pt"Lu by selling lumber mill -run. MISSOUkl AOk ICU LTUJV.L EXPEkINfl'IT STAnON G LOSSARY Cull is " 'asl/: nurtrial thar C'.lnnor be muktred u a profir. Cull log scale is rha. porrion of tht log dedUCted from the gross scalc btnU5e it is nQr merchantable. Oimen$ion is lumber 2 to ~ inches thick. 8/4 lumber is lumber that is 2 inches thick in ,he rough. End uimmed lumber is lumber thar has . he ends tUI square I{ 90 degrccs to Ihe main axis of the board. Splir. broken Or rotten ends have been rrimmed oK. 4 /4 lumber is inch lumber in rhc rough. Lumbermen U~ the term <juutcr 10 designate \4 inch of thickness in .he rough. Gross log sole is the sale of Ihe log before an)' deductions are made for defect. Log Scale ruk is a tabulation of values tmed upon diagn m, formula. mil! taUy or a combinuion of an)' of rhese which gives the estimated contenu of t log in board feet of lumber. Lost lime is the Utu-..! time Ihe mill w15 nOt opefllting during its regular shift " 'hiJc .his stud)' "'::lIS being urried on. Lumber u1ly rule is a ckvice by which rhe number of board f~t in a piece of lumber may be r('::lld direct from the rule. Mill culls are boards ... hich do nOt meer an)' of Ihe srandard grade5 bur "'hich do ha\"e a s:l le5 v-.. lue locaJJ)' :II :I nominal price. M,jIJ -run is all the lumber produced in a shift reg-.l.dlcss of the grades. Mis-cuts arc boards that do not meet rhe manu&cruring specificadons. Net log scale is the sale of rhe log .... hen rhe cull or def<"(tivt portion has been deducted.. It is g r{)Ss Kale minus cull 5ClIle. Operlling rime is the aClu~1 rime rhe mill openrts during a shift or any such $Cued period. J( a mill shift is 8 hours and the mill does not opente for 1 Y, hours then rhe openlling time is 6~ hours. Over- run is the excess of lumber in mill rally produced by ,he mill o\'er log sule. O,·er·run occurs because with modern machine,)' and a smaller saw· kerf more lumber can be produced from ~ log rhan ,he SC-.l1e rule indiolCS. StOO(.5 arc short pi<"(cs of lumber below the minimum length which sometimes can be sold ro customers. Surf:a~ measun: of a board is the 59uare fect of the boilid. Thickness has no bearing upon surhce measurement. The formub for the surface measure is the wid,h of the board in inche5 multiplied bj' the length of the ~rd in ftet divided b)' the constant 12. Timhcn are pieces of lumber' inches or larger in eross seclion. TOtal ,ime of srudy .... :I,S the elapsed rime during the regular shifts from the St:ltt of the stud)' un1il it wu completed 11 rhe mill , 

Selling mill-run and graded oak lumber

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