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Logging Costs — A Sane Method 



Perliaps the most perjilexini; |irobleni before the lumbermen and 

 foresters today is that of logging costs. Every estimate of stumpage 

 value demands an estimate of probable logging cost. Every pro- 

 jeeted ojieration calls for a choice of the cheapest method and eqviip- 

 nmnt, by compiarison of estimated cost under ditl'erent methods and 

 with different equipment. Usually the only solution of these im- 

 portant problems has been the estimate of practical loggers based 

 upon their judgment and experience. But as stumpage values rise 

 the importance of close estimates of logging costs becomes greater, 

 as does also that of choosing the most efficient and cheapest method 

 and equipment under the given conditions. 



A great many lumbermen keep costs in some detail, but 1 believe 

 myself safe in saying that the majority keep only such accounts as, 

 used ia conjunction with an inventory, will give them a total cost 

 per M. This when compared with the average return per M shows 

 their net profit. Often this total cost is itemized to show the expense 

 per M of different parts of the operation, such as felling, skidding, 

 loading, railroad haulage, etc. Mostly these costs are kept with the 

 old bookkeeping point of view, viz.: debit outgo, credit income, and 

 the balance shows profit. 



Accounting, as a method of measuring efficiency of work by a 

 careful analysis of the operation, and detailed costkeeping, is not 

 often used. 



There are numerous reasons for this state of affairs. In the first 

 place careful cost accounting is very difficult under the continually 

 varying conditions of a logging job. In the sawmills, where con- 

 ditions are much more stable, and work can go on in a routine way, 

 detailed cost accounting is much easier and in a great many cases 

 is applied. Another reason is, that large timber holdings have been 

 bought in former years at a very low stumpage valuation. Such tim- 

 ber can be logged and manufactured at a good profit today, whereas 

 if the present stumpage value had to be paid, the profit would be 

 small, and often loss would result. In other words the profit comes 

 largely from the increased price of standing timber and consequent 

 rise in the price of lumber, rather than as a profit on its manu- 

 facture. The average lumber manufacturer sees to it that the nrill 

 work is as efficient as possible and settles the troublesome profit of 

 efficient logging either by letting it out under contract, or putting 

 it in charge of some practical woodsman, to do the best he can. 



In the present days of high stumpage prices, however, the eflSciency 

 of the logging end of the business has a large influence on its profits. 

 The only sure way of determining efficiency is by careful cost ac- 

 counting, and the reason w'hy most logging costs obtainable today 

 are of little use in this connection, is because they have seldom or 

 never been tied in with conditions imder which the work has been 

 done. 



It remains then to develop a "science" of logging, to determine 

 the most efficient method of operation under given conditions. This 

 is not to be easily or quickly accomplished, but I believe it can be 

 done — never, to be sure, in any extreme detail, because of the diffi- 

 culty of closely measuring the varying factors which govern logging 

 efficiency, Ijut yet close enough to give a fairly firm basis for the 

 choice of logging method, and for an estimate of its probable cost. 



The important factors which affect the cost of logging and which 

 may be measured and expressed intelligibly are: 



1. Stand of timber per acre. 



-. Size of timber (average number logs per M). 



3. Average slope. 



4. "Bottom" (condition of ground, swampy, rocky, etc.). 

 •J. Average length of haul. 



.Another very important factor, which is both hard to measure 

 and to foresee in estimating cost of logging, is the character and 

 efficiency of the available labor supply. 



If now, we measure the average daily or monthly capacity of, say, 

 a skidding crew (or any other crew performing a definite part of the 

 operation) and state the method of work, the character of the labor, 

 the equipments (tools, stock, machinery, etc.), and the five factions 



mentioned above, we have a fair basis for comparing the efficiency 

 of a given method of work, with another method which has been 

 studied in the same way. In every case, however, it is necessary 

 to analyze the operation into its distinct parts, so that if a skidding 

 crew is also doing some other part of the work, say road building, 

 as it goes along, we may by a ranger tinie study determine what pro- 

 portion of the expense belongs to road making and what [lart to the 

 skidding. 



It will be necessary in this connection to work out average costs 

 of operation (aside from labor costs), maintenance, and repairs of 

 logging tools, stock, and machinery used by the crews whose capaci- 

 ties are studied. 



When this has been done on a large number of operations and 

 under a large number of different conditions, it will be possible to 

 state, for any set of conditions, what is the ideal method of work, 

 and what is the ideal equipment. It is, of course, true that the 

 lumberman must use what he has on the spot; very often he cannot 

 use the ideal method, even though he knows surely what it is. But 

 such information as is described above should aid greatly in choosing 

 the method of operation, and in buying the logging machinery and 

 other equipment for estimating a given tract of timber. 



Besides these general problems of determining the efficiency of 

 different logging methods, every company will have its own purely 

 local problems to solve, more detailed comparisons of cost of dif- 

 ferent ways of doing things, under the conditions peculiar to the 

 individual operation. This can be carried by means of detail book- 

 keeping to any point desired. But it should always be kept in mind 

 that comparative costs are of very little practical value unless the 

 factors which influence them are also known. In picking the cheaper 

 method it is necessary to know that the work was done under similar 

 or nearly similar conditions. 



Hardwood Market of Hamburg 



German lumber merchants have usually confined themselves to the 

 publication of market reports in their own language. These reports 

 sent to American journals and to the American lumber trade have not 

 been of particular importance because of this fact. J. F. Miiller & 

 Sons of Hamburg have issued a report dated November 11, which is 

 printed in English and contains an interesting and instructive summary 

 of market conditions in that center for November. According to the 

 report, black walnut was in good demand, especially the better grades, 

 which were not in all cases obtainable at the prices buyers had for- 

 merly been paying. Offerings of firsts and seconds were, according 

 to report, scarce and it was the opinion of this firm that shipments 

 of these grades would be welcome. Sales of the common grades ob- 

 tained somewhat slower owing to the large quantities consigned to the 

 Hamburg market, which created a condition of stock in excess of the 

 actual demand. Cull waliuit lumber should be sent only on firm orders 

 as there is but a limited output for this stock. 



There was a brisk demand for white oak, but the resulting business 

 was not excessively large owing to the steadily increasing price that 

 shippers have been asking for their lumber on account of the extraor- 

 dinary rise in ocean freight rates. The bulletin calls attention to the 

 fact that exporters should bear in mind the German preference for 

 white oak and the difficulty of disposing of red oak stock in that 

 market. Plain oak is equally favorably received, while quartered is 

 of slow movement. 



The better grades of chestnut occasionally find a market in Ger- 

 many, although the business transacted is of small jiroportions. Lower 

 . grades, such as sound wormy, are not saleable. Cottonwood has 

 reached a level of price which prevents its use to a great extent, as 

 local and African woods can be purchased to better advantage. There 

 is. an equally limited demand for yellow poplar and very few con- 

 tracts have been closed. But few entries have been obtained for red 

 gum, while snp gum and tupelo lumber is imported on a large scale 

 and enjoys an active inquiry. There seems to be but little demand 

 for basswood in Germany. 



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