In 2018, researchers at SUNY-ESF published a paper about the profitability of timber harvesting, from a logger’s perspective, in the NYC Watershed and surrounding areas (link to article). The study examined 23 logging jobs and found that almost half were losing money. While this was a concerning result, the authors noted that they only looked at one job per logger and they called for future research to study the long-term profitability of logging jobs.
A stack of firewood logs at the landing.
The WAC Forestry Program has taken up this call and begun following a handful of loggers, tracking the productivity and profitability of the jobs they will complete over the next two years. Essentially, we are testing if the Pareto principle, also known as the 80/20 rule, holds true for logging profitability. That is, loggers make 80% of their profit on 20% of the jobs they complete. Put another way, is it ok if loggers occasionally lose money on a job because the expectation is that they will complete one or more highly profitable jobs that result in a net profit for the year? A string of profitable years might mean that that loggers can re-invest this money back into their businesses through equipment repairs and upgrades or hiring an additional crew member.
From WAC’s watershed management perspective, we want logging businesses to be successful because the maintenance of healthy forests depends, in part, on skilled labor to put forest management planning into practice. For example, a forester might prescribe that a woods be thinned to provide more resources (space, light, water, nutrients) for crop trees to grow. Another example is Audubon NY’s Harvest for Habitat program, where canopy gaps are encouraged to increase habitat for forest and shrubland birds. Loggers have the knowledge and skills to fell trees safely and efficiently, skid them to the landing, and produce sawlogs that maximize value.
This logger is using directional felling techniques to drop the tree where he wants it to go. This has obvious safety benefits, but it also protects residual trees (trees that are not harvested), reduces stem breakage on the felled tree, and makes the skidder operator’s job easier in terms of hook-up and extraction.
The end result.
As a landowner, you may be asking, “Ok, but what does logger economic viability have to do with me?”. While landowners often rate privacy, nature, wildlife, and recreation above commercial value, many landowners will harvest timber to generate income. If logging isn’t profitable, there will be fewer loggers around to do the work. Furthermore, profitable loggers are better positioned to pass on more revenue to you and to properly implement forestry best management practices (BMPs) to protect water quality during and after the harvest.
This water bar moves water off the skid trail, reducing the volume and velocity of surface runoff. The logs increase the water bar’s durability under repeated skidder passes, so it maintains its function throughout the harvest. Hence the name, “working water bar”.
This research involves a two-hour interview to understand how much it costs loggers to operate their machines per hour, as well as their daily overhead costs. After that, loggers track their machine hours, production, and any other costs (e.g., machine transport, trucking logs to the mill, gravel, landing mats, stream crossings) for each job they complete. All information provided to us by the logger is strictly confidential. For example, logger names and any potentially identifying characteristics, such as business location, machine make, model, and year will remain anonymous during reporting.
In return, we provide loggers with a summary of their production costs, net revenue, and if applicable, production and logging contract rates required to make money on the job. Factors related to profitability, such as harvest area and volume, average skid distance, fuel price, slope steepness, soil moisture, BMP hours required, and contract rates, will be used to put each job’s economic outcome into perspective. Participating loggers receive $500 per logging job, thanks to a research grant from the U.S. Forest Service.
Ultimately, this research helps the WAC Forestry Program understand the long-term economic viability of timber harvesting for loggers working in our area. We can better understand the factors that relate to profitability, including our own BMP cost-share program. We also hope loggers benefit by learning how to use the tool we’re using to track profitability, called Planning and Analysis in Timber Harvesting (PATH), developed by Dr. Steve Bick.