Presented October 3, 2006 - Ho Chi Mihn City, Vietnam
Introduction
At Timbergreen Farm near Spring Green Wisconsin, USA, our family business masters all aspects of future oriented forest management, timber harvesting, wood manufacturing, and direct marketing of our annual harvest as finished flooring into our customers’ homes. Installed and finished hardwood flooring is now selling for an average of $10,000 per thousand square feet ($10,000 per 100 square meters). This earns us one thousand times the commercial stumpage rate for small diameter trees, one hundred times the stumpage rate for low-grade sawtimber, and ten times the stumpage rate on our best trees. Our 200 acre (90 ha) forest’s annual growth is about 400 board feet sawtimber per acre - quadruple the average for our region and our harvests produce double the usable products of a typical commercial logging job. Our potential annual harvest could produce over 2 acres (1 ha) of installed flooring, earning us an income of over four thousand dollars per acre each year ($10,000/ha potential annual income), and we could support one full time worker for every 40 acres (18 ha) of our timber, if we chose to fully utilize our annual growth. We have found that Wood is the perfect FUEL for small business.
My passion is to teach other forest owners that; their timber is very valuable, forests can produce a good annual income, there are simple alternatives to the big industrial practices, and that they can control their own small forestry business – if they choose. The following ideas may be ‘seeds’ to help change local methods to bring more profit to small businesses in any location.
I describe our forest management in my book, “Full Vigor Forestry – Sustainable Forest Management from the Forest Owner’s Point of View.” We work to encourage fully stocked stands of vigorous , high quality trees that produce an annual harvest. The best ideas from the German Dauerwald and the Native American, Menominee Tribal Enterprise Forest here in Wisconsin have been used to maximize the many benefits our family gains from the forest. Another guiding principle in developing Full Vigor Forestry (FVF) was to do just the opposite of what I learned was business as usual on private lands in the American Timber Industry.
In FVF, nearly every tree has high value and increasing species diversity is a key goal. We never let demand for wood products affect our decisions when harvesting timber. We have learned to “watch nature” and harvest just the natural output of the forest. (Our most popular product is mixed-species character-grade flooring. Each floor is custom blended for the customer, but to be sustainable, we sell the mixture of species that our forest produces each year.) Natural succession and natural regeneration are encouraged. The gentle stirring of the forest by our selective harvesting encourages our good trees to regenerate. This natural seeding is so effective we have to continually thin our young trees to prevent over-crowding. We do have some control of the future composition of the forest by what small trees are encouraged or discouraged.
We see our forest as a living solar collector. A healthy, full arrayed tree canopy catches the available sunlight and converts the sun’s energy into wood. We see also each tree as a living solar collector. Hardwood trees are shaped like a funnel. Conifer trees have the cone shaped funnel upside down, collecting the light on the sides of the crown. A tree with a large “funnel” crown exposed to the sun can grow quickly, where a slender tree with a small leaf surface will grow slowly. Our goal is for the good trees to be growing ¼” to ½” in (6mm to 12mm) diameter each year. A crown width that is about one third of the tree’s height is optimum for deciduous species. For conifer timber, a crown width to tree height ratio of one to four seems optimum.
Sunlight is the main requirement for tree growth, followed by water, and then soil nutrients. We control the amount of these ingredients each tree gets by controlling tree spacing. We start with a tree spacing guide that is developed from the crown/height ratio. Spacing is then fine tuned by observing the individual tree diameter growth. Maintaining vigorous diameter growth is a key goal of FVF. A small annual harvest keeps the forest canopy intact and at maximum production. This produces much more timber than a heavy harvest every decade or two.
Common sense forestry is understood and controlled by the forest owner
Forest management is simple, similar to growing a vegetable garden or any agricultural crop. Thinning and weeding are common sense principles most people relate to. I can teach a forest owner the basics of forest management in one day. Trees are primarily affected by the other trees surrounding them. We manage a small group of trees by thinning and weeding, move on to another group, and soon the whole forest is well managed. Tree diameter growth determines the amount of thinning that is needed. We have demonstrated that all species, including our dominant oaks (Quercus Rubra & Quercus Alba), respond to release and can be selectively harvested.
When choosing to harvest timber, the FVF motto for the last 20 years has been simply – Take the Worst First. My German teachers have described the decision making process differently – harvest the lesser tree. Every tree has many values; aesthetic, wildlife habitat, stand diversity, resource protection, regeneration potential, wood products, etc. When comparing two trees that are competing, a forest manager assigns points to each tree, taking into account all the different values that are important. Then you harvest the lesser value tree, allowing the best trees to grow and regenerate for the future.
Our annual harvest potential is about 400 board feet sawtimber plus another 100 board feet from small diameter trees per acre. This is the volume of one oak tree 24” (60 cm) diameter and 80 feet (24 m) tall. This could produce 500 square feet of flooring per acre each year (100 square meters per hectare). Normally, we would take several smaller trees of a variety of sizes per acre, always taking the worst first. A forest growing with Full Vigor will produce logs of all sizes, from 6” (15 cm) diameter inside the bark, to 36” (1m) diameter or larger. We have no maximum size or age for a good tree, they are allowed to grow as long has they have their vigor.
In the process of restoring a typically high-graded forest to Full Vigor, most of the harvesting will be low value species, small diameter, damaged, and deformed logs that the loggers passed by. Often, 80% of the harvest will be logs less than the 12” (30 cm) diameter normally accepted for sawlogs. Small logs are relatively easy to handle and small machines are available for each step. We learned to saw these small logs into lumber and make high value mixed-species character-grade flooring so our restoration work would be a profitable business. Small diameter logs have small knots and mostly good character that is very attractive. There is high lumber over-run when sawmilling and very little waste when making flooring, compared to big logs. We can earn nearly as much from commercially worthless salvaged logs as from our good timber. All trees earn us about $10,000 per mbf or thousand square feet of flooring ($10,000 per 100 square meters).
We have built an extensive eight mile (13 km) road and trail system through the forest and we can carefully harvest any tree on the property any year. No good tree is wasted if it dies or blows down. The trail system makes the whole property more enjoyable for the many people who hunt, trail ride, hike, train, and work here.
We selectively harvest up to one tree per acre each year using “Arthroscopic Logging” techniques. When your family owns the land and the forest supports your income, you cannot afford to damage the resource. Directional felling methods taught by Soren Erickson from Sweden are used. Safety for the faller, accuracy and control of felling, and minimizing the damage to the butt log all are important to our business.
This is our timber, so as forest owners we want to make the most of our harvested trees. Our stumps are cut low as possible, we process partially rotten & hollow logs, crooked & bent logs, dead logs (often oak logs that have been dead for 5 years are still sound, and spalted maple is actually more valuable than white wood), and small diameter logs. Crotches and sound burls are sawn and dried for highest value use.
Trees are pulled to a trail using a Fetching Arch and a radio controlled winch on our 55-horse power 2WD farm tractor. We constantly revive “old technology” by adding a little modern twist. The average skid to a trail is less than 100 feet (30 m). Our prehauler picks up the logs piled along the trail and carries the logs out of the forest, direct to the sawmill. The average distance from stump to sawmill is ½ mile (1 km). We never drive a machine off the trail to protect our regeneration. We never drive a machine on the trail if the ground is soft.
On the farm manufacturing
We process our annual harvest into finished products right here on the farm. We have an electric WoodMizer LT40 sawmill, a band resaw, and a circular two saw edger under one roof. Methods for efficiently milling the high percentage of curved logs and small diameter logs have been perfected. Straight oak logs are usually quartersawn to get the attractive and stable grain pattern. Our goal is to transform each piece of wood into its highest value use.
Sawn lumber is immediately stacked on stickers in one of the pre-drying chambers of our solar cycle kiln buildings. The ends of the boards are protected from over-drying, rain and sun is kept off the wood, and the high roof overhead accelerates the natural air flow to pre-dry the lumber from 90% to 12% Moisture Content (MC) in 3 months.
Once the lumber is fully pre-dried we use solar energy to heat the air in the kiln chamber to dry the wood to 6% MC in one more month. Our three solar cycle kilns collect 1,500,000 BTUs of free heat on a sunny day, and can operate at 80 degrees F (45 C) over the outside temperature. Only a small amount of electricity is needed to circulate the hot air in the kiln chamber. The daily heating cycle naturally equalizes the MC of the lumber each night so steam conditioning is not needed at the end of the drying period. This produces superior quality lumber and makes the kiln very inexpensive and simple to build & operate. A solar cycle kiln has four main parts; a clear insulated window, a black metal collector surface to heat the air, fans to circulate the hot air, and an insulated wood chamber. Many local building materials can be used to build these kilns besides wood; greenhouse, concrete block, straw bale, etc. My unique design for the solar cycle kiln is now being used all over the globe.
Our 100 year old one hundred foot (30 m) long dairy barn has been remodeled for our business. Upstairs in the hay loft is an insulated and humidity controlled lumber storage room. We store our wood right at 6% MC so it can be used immediately. Some excess kiln dry lumber is sold to area woodworkers, but our priority is to sell most of our wood as higher value manufactured products.
Downstairs is a workshop where we manufacture many wood products. Basic woodworking tools and a Swedish made Logosol 4 head molder are used to make high value merchandise. Flooring is our major source of income, but custom made glued-up wooden countertops, stairways, millwork, furniture, gifts, etc. add to our sales. When making flooring we can use pieces of wood as small as 1”X3”X12” (25 mm X 75 mm X 300 mm). When making wooden pens and glued-up cutting boards, etc. we use even smaller pieces. Scraps are used for fuel. We control every aspect of wood manufacturing, keeping it as simple as possible. Our tools help us “turn straw into gold” right here.
The key to our success is direct marketing to customers. The retail sale is the largest profit of any of the steps and makes all the hard work of manufacturing wood products pay off well for us. The retail profit is about $2,000 per thousand square feet (100 square meters) of flooring. This is also the easiest and safest step of the entire process.
Every floor that we install becomes another showroom for us and the happy customer becomes voluntary sales staff. Our customers sell our next floor for us! New business comes to us with almost no cost for advertising or retailing. Our business receives a lot of attention in the media, also generating new business with no money spent.
Everybody uses wood products everyday, everywhere. We see every house as a potential project and every person is a potential customer. People prefer to buy from a local producer as compared to the big building supply store. Spread the word that good wood is available. Show off the wood – Good Wood Sells Itself.
One third of the retail cost of wood products in the U.S. is trucking/shipping. This is about $3,000 per thousand square feet (100 square meters) for flooring. We minimize hauling wood and keep all that money too. Our wood is trucked once, from the workshop to the customer’s home, usually as we commute to work each day. Most of our jobs are within an hour’s drive of the farm. (50 miles or 80 km) We have traveled over 500 miles (800km) to install flooring, but stay on location during the work when the driving gets excessive. Installation is the most fun and profitable step.
Building your own house with your own wood is the most rewarding use possible. Once your home is complete, the next best thing is to put your wood into someone else’s home at retail prices. I learned how simple it is to install flooring when I built my own log home eight years ago, and have been selling installed flooring ever since. When we purchased the molding machine four years ago and finally controlled the entire process from forest to finished flooring, our costs went down, our profits went way up, and our enjoyment of the business skyrocketed too.
My log home is my showplace for my wood products. When a new customer calls, I invite them to view my website, take the virtual tours of the business, and then come to Timbergreen for a visit. They quickly see that we really do what we say and that we know our wood. We have 8 types of flooring installed, wooden countertops, beautiful kitchen cabinets, and many more works of wood art to see and touch. They tell me what they like the best and then we custom blend our wood into their home with 110% satisfaction every time.
It is easier to sell our flooring and other wood products direct to a customer. We have the advantage in that sale, a much different perspective than if we sold wood in a wholesale market where you are competing with big industry. We guarantee our work & wood, and since we are the producer, the consumer’s confidence is high that we will do what we say. The huge building supply stores can’t come close to that.
Value-multiplied manufacturing at Timbergreen Farm
How we earn $10,000 per thousand square feet (100 square meters) of flooring:
Activity Time Spent Value Added
Harvesting |
2-5 hours |
$ 250/mbf |
Sawmilling |
3-5 hours |
$ 250/mbf |
Kiln Drying |
4 hours |
$ 250/mbf |
Tongue and Groove Flooring |
10 hours |
$1,500/mbf |
Install Flooring |
80 hours |
$7,000/mbf |
This example assumes crediting the forest owner $500 per mbf and leaves $250/mbf for warehousing, trucking, extra handling etc., or just more profit!
My father, my partner, and I each work part time in this business, though our forest’s growth would support six full time workers. Our family gains other benefits from the forest besides our timber income. We operate a native wildflower nursery to help other forest owners reintroduce natural plants that have been destroyed by overgrazing. We produce shiitake mushrooms on small diameter logs from harvested tree-tops and timber stand improvement thinning. Other mushrooms are collected wild. We lease most of the land for wildlife hunting, earning almost enough to pay the property taxes. We also harvest deer meat for our table. Our extensive trail system makes all areas of the property accessible for recreational use of our family and friends.
My current research is to find a practical method of turning our waste sawdust, planer shavings, slabwood, and harvest scraps into usable and exportable energy. Possible products being considered; burning wood to power a steam engine or steam turbine with a generator to make electricity, wood gasification to power an internal combustion engine with a generator to make electricity, produce bio-diesel, produce ethanol, produce wood pellets, etc. The leading idea today is bio-digestion of sawdust and chips – then distilling ethanol.
We own our wood until it is installed in the buyer’s home.
My presence at this conference is the ultimate testimony to the success of my business. My airfare will be reimbursed, but all the other costs of my trip are paid from my pocket. I’m able to spend the time to write this paper, prepare for the trip, attend the conference, and extend the trip for another 12 days to see your wonderful region of the world – because I had a good year at work! Half of my time is spent sharing successful ideas with other forest owners – that is my passion in life. I can afford to do this, and am willing to give away all the secrets of my success to help and inspire other forest owners. Wood is the perfect FUEL for small business!
Since earning a BS degree in Forestry from University of Wisconsin – Madison in 1976, I have worked as a consulting forester with private woodlots owners in S Wisconsin. Being the first consulting forester to ever advocate for the small woodlot owner in the region, I was immediately overwhelmed by thousands and thousands of sad stories of how each landowner had been “ripped off” (cheated) by some timber buyer. I found a timber market with no competition, no information, and no significant government marketing assistance available to forest owners.
As a forester and forest owner, over the years I have participated in the government forestry programs and worked with the traditional timber industry. What I learned in college about formal inventories and complicated harvest plans for long-interval harvests just didn’t work on small woodlots. Every effort failed to produce significant responsible and profitable forest management on the small private forest ownerships. Only a small percentage of woodlot owners in the U.S. even try to manage their timber today.
Eight years ago a third generation German forester visited here. After driving 40 miles (65 km) from the airport to Spring Green, Dr. Ingo Grebe stated, “I see that you don’t manage your timber here.” (Two years ago I visited Germany and instantly understood the difference between their Good Industrial Forestry and the U.S. high-grading forestry) Americans don’t value their forests as the Europeans do. U.S. forest owners have low forest-esteem
Wisconsin and U.S. farmers manage all their other crops with great skill and knowledge, yet neglect and mismanage their most abundant crop – their trees. The reasons became clear talking with local forest owners: The timber market is a horrible deterrent to forestry on private lands.
Timber prices are too low to make forest management profitable. The U.S. timber industry is a $300,000,000,000/year giant. Everyone in the industry makes good income and profit, except the forest owner. Forestry will never be sustainable if the producer is not making money for his effort and his investment. Less than 1% of forest owners here have any practical knowledge of what timber they own, what it is worth, or how much money they make on timber. Timber prices at the mill yards are controlled by supply and demand, and are so low that timber buyers are pressured to minimize what they pay the forest owner just to stay in business.
Brokers/timber buyers typically shortchange inexperienced woodlot owners
Market prices are very low, yet timber buyers typically shortchange the forest owner also. One buyer explained that procuring timber is like a game – the experienced buyers make sport by taking advantage of unknowing landowners. (In the past, when I have been in the position to buy logs/trees from another forest owner, I feel like a totally different person. The bias to make myself more money by unfairly grading and scaling is very strong) Timber buyers use thousands of ploys to minimize what they actually pay the forest owner and increase their own profits. The timber buyer “middleman” is the most discouraging force in preventing responsible forest management on private lands. Industry should clean up this act, as these timber buyers are the industry representatives that the forest owner deals with face to face. Forest owners keep taking what they can get as ‘something is better than nothing’.
No good price information is available
Here in Wisconsin, everyday the TVs, radios, and newspapers tell the daily market prices for many agricultural crops. There is no market price for timber. Every timber sale is a negotiated price between an experienced buyer and an inexperienced landowner. Every attempt to provide meaningful price information to forest owners has failed and the reported prices are too low to make a profit anyway. Variations in grading and scaling standards make it difficult for the forest owner to interpret what price information is available.
Logging is typically messy, wasteful, and damaging to the land
Forest owners feel they totally lose control of their land when a logger moves the equipment in for a harvest. Logging equipment is getting larger and more expensive here in the U.S. Heavy harvests are needed to make a profit for the logger and the machines often must be operated even in bad weather to make the payments. Loggers work to make their wage today at this location, with no thought of ever returning. The timber industry accepts damage on private land as normal and necessary to feed the mills with a steady supply of wood. This situation is getting worse today from the forest owner’s point of view.
Theft and Fraud is common and usually ignored or covered up. Forest owners often say, “Why bother growing big trees if someone is just going to steal them?” Loggers often say, “If you are going to arrest me, you’ll have to arrest us all.”
Most forest owners in this region do not respect or deal with foresters. The profession has failed to bring about significant sound forest management in the U.S. The average forest owner ignores their timber, then deals direct with a timber buyer when enough mature trees are present for a harvest - where just the good trees are taken.
Professional foresters tell forest owners that will listen that owners are not qualified to manage timber. The message comes in many ways, “Only a professional can write a management plan or mark timber.” Technical language and industrial practices overwhelm an individual landowner. Free services and monetary incentives from government programs keep a small percentage of forest owners captive in “welfare forestry.”
Foresters acting as brokers for landowners and “procurement foresters” for a big mill both present huge ethical problems that forest owners see. Feeding the big mill with cheap timber is their obvious goal. Consulting foresters who work for landowners are usually more loyal to the big mill, not the forest owner – as the forester’s income is tied to future sales to the mill and one forest owner is expendable. Foresters have compromised due to the steady pressure from the big mills to work in ways that are practical for industry to make money.
There has been no alternative to the traditional timber market system that is dominated by big corporations. A few forest owners have learned to make the best of a bad situation, but this market actually discourages sound forest management on small private forest ownerships. I gradually found that I can’t change it and can’t beat it – it is too huge.
But I found that I can walk right around it!
At Timbergreen Farm, we have developed a new and separate timber market that encourages and rewards sound forest management on a small forest ownership.
One common question is whether the market exists for other forest owners to join our successful model. Foresters sit in their offices and say, “It may work for JB, but won’t work for other forest owners.” I say, “Let me show you how it works, it’s simple!” I have spent ten years trying to get all my neighbors to experience the many benefits of our business. I have never been afraid of competition of other forest owners, or that we would saturate the market with our good wood, driving down the price. The opposite is true – forest owners need strength in numbers to control the timber market for their advantage, not the benefit of the big corporations.
Forest owners must realize that when their timber is harvested, the finished products will be sold in the retail market to a customer somewhere. It is their choice whether to sell their trees to a timber buyer and let the industry make 99% of the money, or to control the marketing of their own wood. My contacts with wood buyers for 20 years makes it very clear that customers would prefer to buy direct from a local producer that they know, rather than some retail outlet in the city. This marketplace is unlimited.
To bring about significant levels of forest management over the landscape, I have proposed starting community-based value-multiplied cooperative businesses since 1997. Our goal was to control the marketing of our own timber, capture the huge middlemen’s profit, and pay professional loggers and the forest owner fairly.
So far in the U.S. the original efforts to establish these “Sustainable Woods Cooperatives” have been blocked. The few sustainable forestry cooperatives that still exist in the Midwest have been steered by the professional foresters with their ‘free’ money, back to the things that forest owners are “supposed to do”; attend educational field days featuring “expert” foresters, attend inspirational walks in the woods, and hold meetings to talk about some group marketing of trees into the traditional timber market.
This is similar to the experience I had with FSC Certification. I heard about FSC in 1997 and thought it might be the answer to help me encourage good forestry here in Wisconsin. Timbergreen Farm was the first FSC certified private woodlot in the Midwestern U.S. and Timbergreen Forestry was the first FSC certified resource manager in the region. We were immediately flooded with calls from all over the world that wanted to buy shipping container-load quantities of “top-quality” FSC certified wood at “rock-bottom” prices. How Ridiculous! I watched as the whole system was taken over by the same traditional forces that destroyed the Sustainable Woods Cooperative vision. We found that FSC certification was too complex, very expensive, ineffective, and actually discourages good forest management on private woodlots.
At Timbergreen Farm, we now simply tell our own story in our local community. We show our customers how we work with wood and help them become discriminating consumers. This is much more effective than paying for a global eco-label.
In 30 years, I have found one thing that works for the forest owner in the timber industry. Here is my recommendation for encouraging forest owners and good loggers to responsibly manage the forest in a profitable manner.
Wood – the perfect FUEL for small business
Organize a business to meet the needs of the family/community. Create a new and separate market for high value wood products through direct sales. If no direct marketing opportunities exist in the area, products can be shipped to metropolitan areas. A producer owned factory outlet store is one option. Finished products have been traded for thousands of years, today it is much easier using the many advantages of the internet. Always sell the local story of the wood to the customer. Have confidence in your products! People around the world love wood. Keep is simple and compete. Do this as a small business venture.
If you are starting a business – get help from someone who is in the business. The ‘traditional influence’ of industrial forestry must be understood and avoided if you are working for the benefit of small business.
There has been growing success with small businesses being developed following our forest to finished flooring example. Timber Techniques Training is our week-long program here at Timbergreen Farm where a person/group can see it all for themselves and get hands-on-the-job training to learn the system. Open-minded people learn our simple methods quickly. I show people what works for me, then it is up to them to take the ideas that will help them, and adapt them to their particular situation back home. Hopefully, each person will make the system a little better each time. Over one dozen small businesses are now being established around the world. If I help a few businesses get started, and they each help a few businesses get started, soon things will change for the better.
Summary - Key features of this new market
Advantages to a forest of a finished flooring business
Conclusion
Wood is very valuable. Wood is easy to work with. Tools are available today. Information is accessible anywhere. Wood is the perfect Fuel for small business. Have Full Vigor!