Transacting Logs by WeightTransacting Logs by WeightA Western US OverviewA Western US Overview

Neal T. Hart, Jendro & Hart, LLC Neal T. Hart, Jendro & Hart, LLC Timber Measurement Society, Central Meeting, April 6Timber Measurement Society, Central Meeting, April 6--8 2011, Tacoma Washington8 2011, Tacoma Washington

Western US log scaling Western US log scaling practices are changing practices are changing

cubic and weight scaling cubic and weight scaling is replacingis replacingboard foot measureboard foot measure

Weyerhaeuser Company, Weyerhaeuser Company, 2008 Annual Report2008 Annual Report

1968: Two Young Growth Sales1968: Two Young Growth Sales1969: 21 mmbf of SG1969: 21 mmbf of SG1970: Entire JSF Sale Program1970: Entire JSF Sale Program

including 19 mmbf SG &including 19 mmbf SG &15 mmbf of OG15 mmbf of OG

Weight Scaling Weight Scaling in Californiain California’’ssJackson State Jackson State ForestForest“ ”

0

500

1,000

1,500

2,000

2,500

3,000

1980 1984 1988 1992 1996 2000 2004 2008

MM

BF

Scrib

ner

Idaho & Montana Timber Harvest by Idaho & Montana Timber Harvest by Ownership, 1980 Ownership, 1980 -- 20082008

PrivatePrivate

NationalNationalForestForest

StateState

BIA & BLMBIA & BLM

43%43%

47%47%1980s

69%69%

15%15%

2000s

Harvest from National Forests in the Harvest from National Forests in the Intermountain WestIntermountain West

0

50

100

150

200

250

300

350

400

450

50019851985

1995199520052005

mm ftmm ft33

--86%86%

05

101520253035

NetGrowth

NaturalMortality

Harvest

Intermountain RegionIntermountain RegionNet Growth, Mortality & HarvestNet Growth, Mortality & Harvest

per acre of Timber Landper acre of Timber Land

NetGrowth

NaturalMortality

Harvest

ft3

Inventory of Sound Dead VolumeInventory of Sound Dead VolumeIntermountain RegionIntermountain Region

0

2

4

6

8

10

12

14

16

18

19851995

2005Billion ft3

17.1 Billion 17.1 Billion Cubic FeetCubic Feet

35 times 35 times annual harvest annual harvest from all from all ownershipsownerships

0

2

4

6

8

10

12

14

16

18

20

22

24

1972 1980 1988 1996 2006

SED

Average Sawlog DiameterAverage Sawlog DiameterWashington Sawmills 1972 Washington Sawmills 1972 -- 20082008

Source: Washington Mill SurveySource: Washington Mill Survey

InteriorInterior

CoastCoast

0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40Log SED (in)

8'10'12'14'16'18'20'

0.111Taper (in per ft):

Scaling Segment Length

Scribner Diameter Bias (in):Scribner Trim-Logs to 16'

Scribner Trim-Logs 17'+ (ft):

0.00

0.50

1.00

Cubic Meters per MBF Scribner Cubic Meters per MBF Scribner Decimal C, Decimal C, Gross Short Log ScaleGross Short Log Scale

TodayTodayMore than Half of the More than Half of the Harvest Produces Logs Harvest Produces Logs Under 10 inches SEDUnder 10 inches SED

0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40Log SED (in)

8'10'12'14'16'18'20'

0.111Taper (in per ft):

Scaling Segment Length

Scribner Diameter Bias (in):Scribner Trim-Logs to 16'

Scribner Trim-Logs 17'+ (ft):

0.00

0.50

1.00

Tons per MBF ScribnerTons per MBF ScribnerDecimal C, Gross Short Log ScaleDecimal C, Gross Short Log Scale

Weight Is BlindWeight Is Blind

••Ignore TrimIgnore Trim••Ignore TaperIgnore Taper••Truncate DiameterTruncate Diameter

On the Plus Side On the Plus Side WeightWeight CanCan’’tt::

••Round to Round to XX #lbs#lbs It CanIt Can’’tt ““SeeSee”” Cracks, or Cracks, or Any Other DefectsAny Other Defects

--0.003%0.003%The Alternatives:The Alternatives:••WeightWeight isis WeightWeight

••CubicCubic ~~ CubicCubic

••Board FootBoard Foot

of Lumberof Lumber

isis notnot a Board Foota Board Foot

in Scribner

Where its goal is to measure total solid-wood fiber

Hypothetical Mill Test for 100 mHypothetical Mill Test for 100 m33 of Logsof Logsin Each Diameter Class from 6in Each Diameter Class from 6”” to 11to 11””

0%

5%

10%

15%

20%

25%

12 16 20 24 28 32 36 40

Distribution ofLog Lengths

•• Constant Taper ofConstant Taper of1 inch in 9 feet1 inch in 9 feet

•• DefectDefect--Free DF LogsFree DF Logs

•• Same Distribution ofSame Distribution ofLengths in Each Lengths in Each Diameter ClassDiameter Class

AssumptionsAssumptions

Hypothetical Mill Test for 100 mHypothetical Mill Test for 100 m33 of Logsof Logsin Each Diameter Class from 6in Each Diameter Class from 6”” to 11to 11””

Logs InLogs In 66”” 77”” 88”” 99”” 1010”” 1111””

Cubic Meters 100 100 100 100 100 100Cubic Meters 100 100 100 100 100 100# of Logs 338 267 217 179 150 128# of Logs 338 267 217 179 150 128

Tons 113 111 110 108 104 103Tons 113 111 110 108 104 103

LLS 12.5 12.5 12.2 12.8 14.4 15.LLS 12.5 12.5 12.2 12.8 14.4 15.33SLS 14.1 15.1 15.9 16.6 17.9 18.SLS 14.1 15.1 15.9 16.6 17.9 18.55

Scribner MBF:Scribner MBF:

MBF LT 25.5 27.4 29.0 30.3 31.4 32.4MBF LT 25.5 27.4 29.0 30.3 31.4 32.4BDU 19 18 16 15 14BDU 19 18 16 15 14 1313

Lumber & Chips OutLumber & Chips Out

Hypothetical Mill Test for 100 mHypothetical Mill Test for 100 m33 of Logsof Logsin Each Diameter Class from 6in Each Diameter Class from 6”” to 11to 11””

SED:SED: 66”” 77”” 88”” 99”” 1010”” 1111””

BF / mBF / m33 260 278 297 313 326 335260 278 297 313 326 335BF / Ton 232 249 269 290 312 325BF / Ton 232 249 269 290 312 325

Lumber Recovery FactorsLumber Recovery Factors

Short Log 1.92 1.87 1.87 1.87 1.79 1.78Short Log 1.92 1.87 1.87 1.87 1.79 1.78Long Log 1.98 2.07 2.21 2.10 1.92 1.97Long Log 1.98 2.07 2.21 2.10 1.92 1.97

ScribnerScribner Overrun:Overrun:

Total Sales Revenue,Total Sales Revenue,Revenue per mRevenue per m33 and Revenue per Tonand Revenue per Ton

Tota

l Rev

enue

Tota

l Rev

enue

Ave

. Rev

enue

Ave

. Rev

enue

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

6" 7" 8" 9" 10" 11"$0

$20

$40

$60

$80

$100

$120Rev. per m3

Rev. per Ton

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

6" 7" 8" 9" 10" 11"$500

$550

$600

$650

$700

$750

$800

Total Sales Revenue,Total Sales Revenue,Revenue per MBF Scribner, LLS & SLSRevenue per MBF Scribner, LLS & SLS

Tota

l Rev

enue

Tota

l Rev

enue

Ave

. Rev

enue

Ave

. Rev

enue

Rev. per MBF LLS

Rev. per MBF SLS

$320$330$340$350$360$370$380$390$400$410$420$430$440$450$460$470$480$490$500

6" 7" 8" 9" 10" 11"

Return To Log ValueReturn To Log Value

$/MBF SL Scribner$/MBF SL Scribner

$/MBF LL Scribner$/MBF LL Scribner

$170$180$190$200$210$220$230

6" 7" 8" 9" 10" 11"

$40$50$60$70$80

6" 7" 8" 9" 10" 11"

$/Ton$/Ton$/Cubic Meter$/Cubic Meter

$/MBF Lumber Tally$/MBF Lumber Tally

Tons per MBF Scribner Conversion FactorsTons per MBF Scribner Conversion FactorsWashington Department of Revenue (DOR)Washington Department of Revenue (DOR)

WestsideWestsideLL ScribnerLL Scribner

WA DOR Tons/MBF FactorWA DOR Tons/MBF FactorEastsideEastsideSL ScribnerSL Scribner

WA DOR Conversion Factor to translateWA DOR Conversion Factor to translatefrom SL to LL Scribner is:from SL to LL Scribner is: 0.820.82

DouglasDouglas--firfir 5.505.50 7.507.50

Western HemlockWestern Hemlock 5.505.50 8.258.25Western Red CedarWestern Red Cedar 4.504.50 7.007.00

ImpliedImpliedSL / LLSL / LL

FactorFactor

÷÷ == 0.730.73

÷÷ == 0.670.67÷÷ == 0.640.64

0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40Log SED (in)

8'10'12'14'16'18'20'

0.111Taper (in per ft):

Scaling Segment Length

Scribner Diameter Bias (in):Scribner Trim-Logs to 16'

Scribner Trim-Logs 17'+ (ft):

0.00

0.50

1.00

Tons per MBF ScribnerTons per MBF ScribnerDecimal C, Gross Short Log ScaleDecimal C, Gross Short Log Scale

WA DOR Tons/MBF Factor for DFWA DOR Tons/MBF Factor for DF

0123456789

10

0 2 4 6 8 10 12 14 16 18 20

WA DOR

Montana

Washington

Log Diameter (SED)

Tons

per

MB

F DouglasDouglas--fir:fir: Tons/MBF Net Scribner SLSTons/MBF Net Scribner SLS

Montana & Washington Scale Data Compared WithMontana & Washington Scale Data Compared WithWA DOR Statutory Conversion @ WA DOR Statutory Conversion @ 5.55.5 Tons/MBFTons/MBF

Using A Tons/MBF Factor That Is Too Low Using A Tons/MBF Factor That Is Too Low Results in Overpayment of Taxes Results in Overpayment of Taxes

IfIf CorrectCorrectTons/MBFTons/MBFFactor is:Factor is:

Using 5.50 Tons/MBFUsing 5.50 Tons/MBFWill Cause Excise Tax Will Cause Excise Tax Overpayment of:Overpayment of:

6.506.50 18%18%36%36%7.507.5055%55%8.508.50

Published Conversion FactorsPublished Conversion Factors