Firewood in demand but it's a tough business to get right

Joe Barry

September 06 2011 04:48 AM

If you have already received approval for a thinning or tending grant for broadleaves, do not let it lie unused. The Forest Service's attitude to funding these days seems to be to use it or lose it, and future agricultural budgets will be tighter than ever.

There is a good demand for timber at present, especially for hardwood thinnings, with the many new entrants to the firewood business competing for whatever is available. Oddly, a number of longer established firewood producers are cutting back on their activity but that is a story for another day.

The combination of an outlet for broadleaf thinnings, plus a grant which will partially cover the costs of doing the job, means that it would be foolish to delay if your trees have reached the appropriate stage. But do guard against theft, given the occasional reports of timber stacked at roadside being removed at night. Make sure you have a securely locked gate to deter thieves and preferably have the stack out of sight from the public road.

It must be two years since I first suggested caution before committing to purchasing expensive firewood processors and other timber handling equipment without carefully assessing the full costs associated with retailing firewood.

Only a decade ago, there was virtually no market in wood fuel, except for a few small local operators and some of those were selling trailer loads of wet timber which the purchaser had to store and dry before use.

This has all changed and the thousands of homeowners who have purchased wood burning stoves now demand dry, clean logs, well presented and delivered to their homes in relatively small amounts.

entrants

The large number of new entrants to the firewood business means the purchaser can shop around and many enterprising merchants are importing dry logs direct from Eastern Europe, which is putting further pressure on the retail price.

Having started selling wood fuel eight years ago, I now find I am being offered cut logs, ready for market, because the people who processed them in the first place are finding it difficult to sell enough of them to make their business viable.

In the midlands, a man who runs a well-established wood fuel firm told me that five years ago there were two others in his area selling logs, now there are 11. Is there room for them all? One has to wonder.

Demand has, as ever, created supply and I am simply suggesting that anyone thinking of joining their ranks should first sit down with a pen and paper and do their sums.

Add up the cost of purchasing the thinnings, which are your raw material for the next season, include the cost of drying them, the interest on the money tied up for a year while seasoning is taking place and the weight loss of up to 40pc as the moisture evaporates. Also include the cost of the processing, log handling machinery plus depreciation, which is a very real but an often ignored expense, and the cost of storage, bagging, insurance, advertising and delivery.

Delivery requires a truck or jeep and trailer, both of which must be taxed and insured, use lots of fuel, require servicing and repairs, have tyres that wear out and, of course, need a driver. Delivering wood fuel means many long and tough man hours, plus weekend work, throughout the late autumn, winter and early spring months.

Cash flow ceases during the summer so, like the tourist industry or tillage contracting, the months during which an income can be earned are strictly limited. You could of course just cut up wet spruce in your spare time and, like some do, sell it, dripping in moisture, in plastic bags. Be prepared to do a runner, though, when the customers complain about the tar build up in their chimneys and the fungi growing on their logs.

There are always cowboys operating in every business, but they tend not to last too long. However, they give wood fuel a bad name.

There are other good opportunities for off-farm work emerging. There is a shortage of qualified contractors to thin small woodlands and transport the thinnings to roadside and there also appears to be an opening for providing a firewood processing service for both woodland and homeowners by cutting up their own wood at their own premises.

The only people I know providing this service at present are the Donegal Woodland Owners' Association. Perhaps others could learn and profit from their example.