
New England Forestry Consultants, Inc.


MAKING THE GRADE
Recently, I was standing on the landing of an active logging job with the
landowner, who was my client. This job was a little different than the
normal timber harvest in that I was selling the logs to various buyers based on
product. For example, veneer logs were sold to a veneer buyer, sawlogs
with certain specs were being sold to one sawmill, and other sawlogs and pallet
logs were being sold to a different sawmill. Essentially, I was marketing
each product in order to generate the highest return. As the landowner and
I were discussing the operation, he turned to a pile of chunks on the landing
and commented about the lost income of those chunks. He felt that he was
losing money because those chunks were not going to the mill and would reduce
the total volume being sold. Did that pile mean he was being short
changed?
While I agreed with him that less volume was being delivered to the mill, I
explained to him that in fact he was making more money removing those defects
from the logs than if they were to stay on the logs and were delivered to the
mill. The result?  the "are you nuts!" look from the landowner. How
could it be possible to deliver less volume and generate more income? The
answer, it is all in the grade.
Table 1 illustrates the difference grade can play on the income generating
potential of a timber harvest. In this example, I am assuming the log to
be sold is a sugar maple that is 20 feet long, and the inside bark diameter at
the small end is 12 inches. The heart size is 1/3 of the total diameter,
and there are defects on two different faces of the log. One defect is
located at 9 feet and the other defect is located at 11 feet.
Table 1. Cutting For Grade Comparision Table 





Qty 
Clear 
dib 
Length 
Volume 
Mill Price 
Log 
Total 


Faces 
(inches) 
(feet) 
(bd.ft.) 
per MBF 
Value 
Payment 









Option 1 
1 
3 
12 
10 
55 
$ 700 
$ 39 
$ 160 

1 
3 
16 
10 
110 
$ 1,100 
$ 121











Option 2 
1 
4 
16 
8 
85 
$ 4,000 
$ 340

$ 375 

1 
2 
12 
12 
70 
$ 500 
$ 35 










Option 3 
1 
4 
16 
8 
85 
$ 4,000 
$ 340

$ 379 

1 
3 
12 
10 
55 
$ 700 
$ 39 










Option 4 
1 
4 
16 
8 
85 
$ 4,000 
$ 340

$ 408 

1 
4 
12 
8 
45 
$ 1,500 
$ 68 










Option 1 would be the quick and easy way to cut the log. Simply cut the
log in half to create two 10foot logs, each with 3 clear faces, and load
it on the truck. The landowner will be selling 165 board feet to the mill
and will receive $160 for the two logs. That's not too bad, and all of the
wood was sent to the mill. But let's see what happens if we stop a second
to think about where to cut this log.
The majority of the volume and value of a log is in the first 8 to 10 feet.
This section needs to get the most scrutiny. If we were to cut the first
log at 8 feet, we would be removing the defects and putting that log into a much
higher grade. In this case, one 8foot log is now worth $340 because the
8foot mark was reached prior to reaching any defect. This amount is
already twice as much value as the two logs were worth in Option 1.
Now, we have to deal with the remaining 12 feet. Essentially, we have
three options. Sell the 12foot loge as it is, with 2 clear faces; cut off
one defect and sell a 10foot log with 3 clear faces; or cut both defects off
and sell an 8foot log with 4 clear faces. The math is pretty simple from
here. The 12foot log will generate $35, the 10foot log will generate
$39, and the 8foot log will generate $68. I vote for the 8foot log and
Option 4.
Cutting for grade as shown in Option 4 results in the chunk pile on the
landing. In this particular example, Option 1 would have delivered 165
board feet to the mill. Option 4 would deliver 130 board feet to the mill,
and 35 board feet left in the chunk pile to be used for firewood. However,
Option 4 would pay $408, while Option 1 would pay $160. With Option 4, the
landowner would essentially be paid $7 per board foot to leave that wood in the
chunk pile.
Additionally, cutting for grade is more important for some species than for
others. The importance will be dependent on the variability in price
ranges for that species. Sugar maple, black cherry, yellow birch, black
birch, and Northern red oak usually justify cutting for grade; with ash, white
pine, and red maple may be less productive. For species such as spruce and
hemlock, grade seldom plays a significant role and is more reliant on volume.
So, the next time you are on your landing and see a pile of chunks, don't
automatically assume that there is a utilization problem. That chunk pile
may mean more money in your pocket.
Tony Lamberton
