The Wood Products Field 



About two voant iijjo ll"> i-tnM!«lii!n'iil I'f m jiliiiit in Hri'iitliitt 

 cuiiiity, Kontiirky, for tl ■ roiliicto by dMiillii- 



tioii »n» rocordeU in 1( v .thiti'.l lit tlii< tiiiio 



tbiit Dip rouovrii nliieli was conducting tlio buniiicw piannod to maku 

 ucotiite of lime and other chcmicoJ |irodiictii, in udditioii to (l;."..-coal, 

 bevcb beitiK the principal material uschI. Whilo a littlo mill waste 

 wiu to be utilixed, the oonipmiy (ilanncd to cut up most of itH inaturiul 

 out of the tree, and with this in view had a tiinall mill sot up in 

 connection nitli the pliuit. 



Announcement hart juat been made that thi< concern, the Kragon 

 Wood I'roduct.s Company, is enlarging its jilaiit, niid liUcwiso \i!\s 

 purchased a considerable amount of timber. Evidently Uio nianiific- 

 turo of these chemical products has been a good business, and one 

 worth further development. All sorts of chemicals have been stimu- 

 lated by the war, and it is possible tliat the concern referred to 

 profited from that factor also. 



However, tlio point of interest to lumber manufacturers as a whole 

 is that hero is a concern which has demonstrated in a jiriu'tical and 

 convincing way that distillation methods may bo appliu I to tlic utili- 

 zation of timber with success. The fact that mill waste is not being 

 used in this plant doesn't mean that a sawmill could not use its 

 waste in that way, but on the other hand the implication is that it 

 could be done. It merely aiipcarcd more economical and ;onvcnient 

 to cut up the trees into sizes which worked into the plant more rcndil;. 

 A millman could use whatever offal he had on hand, provided it were 

 separated into different woods. 



A prominent lumberman recently made the prediction that one of 

 these day^" every mill will have as part of its equipmenl a smul! 

 distilling plant for the purpose of using up its waste. Burning it 

 up to get rid of it docsn 't look like i^ood InisinCRS, that's all. 



Quartered Oak Unprofitable? 



A hardwood man of considerable experience recently made the 

 statement that quartered oak is the most unprofitable itcin on his 

 list, with the possible exception of hickory, which is certainly a 

 "tough nut" to crack, in most instances. The staleincnt about 

 quartered oak is likely to be disputed, whereas the hickory jinjiosition 

 is f.imiliar to nearly everybody The reason is thai quartered oik, 

 under normal conditions, ia fairly easy to sell, while •jradcs of hick- 

 ory under first and seconds move slowly, as a rule. In other words, 

 the tendency to interpret easy sales as assured profits is .such that the 

 man who is making and selling his quartered oak right; slong can 

 hardly help thinking that he is making money, while the lumber that 

 stays with him for months, and even years, is certainly and obviously 

 not a profit-producer. 



Begarding quarteic.l oiik, this lumV^crman said: 



' ' Handling quartered white oak on the same margin of profit as a 

 cheaper wood is a losing game, yet that is the common practise. That 

 is to say, if you are selling $30 lumber at a $5 gross margin, you have 

 16% per cent to take care of handling, overhead and other expense. 

 When the value of the lumber, put on sticks in your yard, is $70, 

 however, and you sell it at a margin of only $5 a thoisand, your 

 gross profit, to take care of the various items of pxj;cnse, is but 

 7.1 per cent. You can "t handle lumber on that narrow a mar{;iT 

 over cost and get out with u whole skin. But lumberipen as a whole 

 don't seem to realize that. 



' ' The proper method is to use the same percentage o£ profit on 

 all items, if it can be done. A 16% per cent margin jii your $70 

 quartered white oak would make it sell at $81.67 a thousand — which 

 it doesn't. Yet without that big a difference, the quartered oak man 

 hasn 't much chance to make money on his product at the selling end. 

 He may be able to cut down production costs, or buy his logs cheaply, 

 or create a better margin than the average in some other way ; but 

 if his costs are such l;hat he has no more leeway, in dollars, than he 

 has on the sale of cheap lumber, he is bound to be stung." 



In this connection, it should be observed that the wise lumberman 



—30— 



keeps track, as far a» poiwibh-, uf hi.t upcruliutiN nitli rc^in'ct to 

 each wond. Fur iiixtunce, he might to know if ho in making money on 

 ash, only to Iokc it on hickory; or if his plain oiik proflt<i are iiiiikiiiu 

 up for quartered oak Ioshch. It is possible to work out a fairly 

 satisfactory method of computing the results with each wood, just 

 as it is to determine how iiiiich was made on each individual car; 

 and when this inforiiiation in compiled for n period as lung on a 

 year, the lumljcrman has some facts that ought to help him to make 

 more money by cutting out the losing iteiiis, if that is practicable; 

 and if not, by endeavoring to sell them at prices which will give n 

 better chance to break even. 



Selling Lumber Log Run 



There arc certain kinds of hardwood lumber which are notable by 

 reason of the demand Ijeing concentrated on certain grades, usually 

 firsts and seconds. 



This is an unsatisfactory condition for the manufacturer, for cvi-ii 

 an unusually good profit on one grade — particularly if this happens 

 to bo at the top, and therefore the smallest ]>art of the output — 

 the necessity of carrying the other grades for a long time and ulti- 

 mately selling at not much over cost, if not at a loss, taking the 

 entire transaction into account, makes the proposition one in which 

 the lunibennan is evidently the goat. 



Hickory and walnut arc two kinds of lumber of which this con- 

 dition is especially true. First and seconds hickory arc usually 

 salable at a good price, and the lower grades arc almost unsalable 

 at any price. High-grade walnut can always be moved, while No. 1 

 and No. 2, especially the latter, are not so easily disposed of. 



The fairest way to meet the situation would be to sell the lumber 

 log-run; in other words, put it up to the consumer to take the bitter 

 with the sweet. There are a lot of lumber buyers who insist that 

 they can use only one grade; and yet, if they were to get the 

 product of the w^hole log into their factories, they would find that 

 they could cut up the other grades to equal if not better advantage. 

 Consequently making it a rule to sell log-run — on grade, of course — 

 would not work any real hardship on the user, while it would solve 

 what has become .a big problem for many lumbermen. Incidentally, 

 a lower price for the firsts and seconds could and would be quoted 

 under such an arrangement. 



This suggestion is particularly ajiropos of walnut. No. 1 common 

 walnut will work into the requirements of furniture manufacturers 

 and other consumers excellently; and when the big spread in price 

 between firsts and seconds and the next lower grade is considered, 

 it is obvious that the consumer who learned how to use lower grades 

 along with the top one would profit, while at the same time the 

 millman would have a better chance to make money on his operations. 



Of course, the consumer can't be forced to buy something that 

 he doesn't want; on the other hand, the manufacturer cannot be 

 compelled to sell, except on his own terms. There ought to be some 

 way of getting together on the log-run proposition, and in fact many 

 buyers are coming around to the logic of the projiosition, and are 

 helping themselves and the sawmill operator at the same time. 



A Traffic Hint 



When you notice changes in rates on lumber, are you chiefly in- 

 terested in seeing whether the other fellow's rate has gone down, 

 or that yours has gone up? 



In other words, do you strive to prevent additional charges 

 being placed on the transportation of' lumber — or simply to main- 

 tain the proper alignment of rates with other markets? 



The latter is important, from a competitive standpoint; but, in 

 a broader way, lumber is competing with numerous substitutes, and 

 every cent added to the rate makes that competition just that much 

 more severe, and restricts the market for lumber — your product — 

 to that extent. 



Think it over — and work with instead Of against the other fel- 

 low in the lumber trade whenever you can. 



