Not to knock the owner but when I see something like this I wonder, "if it is so profitable, why not just do it yourself?"
Kind of like the guys selling blackjack and roulette systems for 29.95
ps
Not to knock the owner but when I see something like this I wonder, "if it is so profitable, why not just do it yourself?"
Kind of like the guys selling blackjack and roulette systems for 29.95
ps
Two points....
Why would the woodworker who can make money making custom furniture ever teach a class. Why not just keep it all to himself and make al the money.
And,
With this logic, no one would ever need to bring in outside capital. Not everyone has Warren Buffets bankroll. Some of us need a little capital boost to make their business grow.
AHA! Finally something I can use to show off all my math homework. First, let's get a couple of items clear--to get the use rights to a piece of land in Hawaii, particularly for many years, be prepared to pay an annual lease rent of at least 4% of anywhere from $10,000 to
$67,000 per acre at today's prices.
Let's keep the example at one acre, approximately 207,8 feet on a side--if it were square.
Koa seeds left in the soil and activated for germination by disturbing the soil may emerge at 40,000 per acre, easily. Hold on--43,560 square feet. That gives you a tree about every 13 inches. Now suppose that weather and sun kill back all the ugly trees and leave exactly one in each 10' x 10' plot, or 435 trees by the second year. These trees might be harvested in alternate rows in 7 or 15 years at perhaps 6" to 12" diameter in the 15th year. The usable log may be 12 to 15 feet in length. To clear crown space for growth of large trees, take out every other row and every other column to produce 20' x 20' cells. That gives you an acre with 108 trees or so on smallish plots. A mature koa tree (or a mature oak for that matter) is likely found in a 40' x' 40' cell, and the canopy is closed. Now go back to the square dimensions of the acre--207.8' on a side. That is about 5 cells by 5 cells, or 25 trees in the acre.
Assume there has been no wind damage, cattle have not gotten into the plot, and nobody has stolen your trees, and that the vendor has not sold the same plot to two or more different people. Take 25 logs at 16' to 20' long 24" diameter at the small end, and possibly another 15 logs 16' long, 12" diameter at the small end..
Calculate the board footage using any standard logging scale (Scribner or international 1/4 inch, for example). Calculate the cost of 4 log handling machines at $200/day for a week, and two trips at $500/trip haulage and $300 police fees for every machine. Calculate $500 per load of 8 logs to the mill. Calculate $.75 as the cutting price per board foot. Figure out how big your stack of lumber will be, at 4' wide and 8' high. Double that area and compute ground rent charges of $1.50/sf /month in a locked industrial park for the next year.
All done? Has anything happened to your $280,000 profit?
Well using that kind of "logic" the 20 trillion dollars our beloved president has spent, the 2 trillion per year deficit, and the 1 trillion dollar per year socialized medicine down payment, the nationalization of the car industry, banking industry, insurance industry, health care industry aren't going to work out well for the economy. I'm shocked, shocked I tell you. Money grows on trees, it really, really does.
Tage Frid: The easiest thing in the world is to make mistakes.
not to turn it into a philosophical debate, but not everyone wants to live in the equivalent of an LA/AZ/Vegas suburb. many residents and officials will divert buildings and walkways to preserve an old growth tree within a city that finds itself in the way of something here. as they should. i have no problem with selectively logging unsettled areas and having high prices on quality woods, however old growth trees in inhabited areas shouldn't be cut every time someone wants a new sidewalk.
after all cheaper lumber doesn't bode well for the longevity of a wood supply. go down to your local mill and tell them you want longleaf pine. the best common species of lumber we had was wasted on everything from ship keels to pulp for paper to just the sap for the flammable liquid, in the name of "inexpensive supply".
the only benefit to that practice was a bunch of hundred year old southern houses built out of rare lumber, and said lumber being all but extinct in many of the states it grew wild in.
Hello,
Never mind...
Last edited by Rich Engelhardt; 05-01-2009 at 6:25 AM.
"Life is what happens to you while you're busy making other plans." - John Lennon
This was an interesting demonstration of math homework, but unfortunately, errors in assumptions lead to errors conclusions. You got a lot of things right but you got a lot of things wrong too. For instance, land costs..,. I am a Hawaii resident and I can tell you firsthand, you certainly can get good agricultural lease-land in Hawaii for way less than your calculations show. You are assuming that the seedlings are generated by scarification with no selection of the best parent stock. Land preparation and planting is at a spacing that encourages straight growth form, but not so close as to cause excessive thinning early in the project. Also, you give no timber values for any of the thinning harvests that occur in the years leading up to the final harvest. Thinning harvests generate significant lumber especially in the middle years.Your analysis required the services of 4 log handling machines for a week, (one month of equipment and man hours) to remove 41 trees. By your calculations, each machine would only be removing 1.6 trees per day. You should immediately fire the forestry crew since I’ve seen these machines take down trees in about 15 seconds. By doing this on a one acre example you miss the benefit of economies of scale. Doing things on a larger scale (say several thousand acres) dramatically affects costs. Also, you didn’t calculate the value of the harvest in your scenario. Milling and kiln drying greatly influence the market value of the lumber. Given the historical trend of price increases in tropical hardwoods and the deforestation driven shortages that are starting to materialize already, the value of the harvest will be way beyond today’s prices. You also assume a lot of other costs (like storing lumber for a year and police etc.) which simply don’t exist for an operation with staging, processing and storage facilities on site. You did however miss the expense of mai tais for the workmen.
I was Googling Hawaiian Legacy Hardwoods and came upon your thread. It's an interesting read, but John I have to disagree with you here. You are contending that there is some trade secret to growing trees and that if it was such a good idea they would keep it to themselves. This isn't a "trade secret issue" it is simply a supply and demand issue. Data from all over the world supports the fact that we are running out of tropical hardwoods. Read any of the ITTO (International Tropical Timber Organization) Reports. The shortage isn't here yet, but it's coming; and it's unavoidable; and no amount of planting will stop the shortage from occurring. There simply isn't enough time. These are facts, not opinion. In addition, tree farms are only able to fill about 1% of the demand worldwide, so even if there were some trade secret issues, I don't think anyone is concerned about competition impacting their business model. There are plenty of other tree farming organizations around the world who have been successfully employing this methodology for decades. Most of these companies are closely held family run operations not run by Corporate America. Check out "Tropical American Tree Farms" (TATF) and "Finca Leone". TATF just planted their two millionth tree for their investors. I considered buying trees through TATF but was concerned about dealing with pending Central American import'export taxes and tariffs.
If it is such a sure thing, then why don't the landowners keep the profits for themselves?
Efficient market hypothesis
Well.....
First off I live on the big island and I work with tree trimmers getting wood for turning.
I have gotten some larger pieces and had some monkey pod sawn by a local woodmill. We know this mill and owner via our club and a member who is with the state forrestry dept.
Here is the web site to the wood company, 100% legit.
http://www.hawaiiislandhardwoods.com/
If you e-mail Jim he could confim if this is for real or not.
I will not say if he knows them but if he does he will tell you the truth I'm sure.
On some of the other issues.
From what I do know this is not an impossible thing to do here. Some of the leases on land could be quite cheap and for long term. One of the biggest things is what the elevation of the land is for Koa. The lower elevations are not producing the high grade woods.
The location on that coast is great weather, lots of rain and very little chance of lava.
Hurricane......I doubt it on this island.
This island is so big with tall mountains that most weather systems like that tend to go around us rather than right into us.
Development....HA! If they started a big development planning right now for that land it would take them 25 years MINIMUM to even get close to breaking ground. Some of the projects going right now on this coast were started 20 years ago!!!
That coast nobody is even thinking of doing big developments, trust me on this!
They planted huge tracts of land in some tree for future pulp for paper and it never panned out and these tracts with trees are still there at least 20 years later.
The forrestry industry on this island is just starting to get commercialized and organized in a moderen manner, like what these guys seem to be doing.
I'm not investing my money in this but I would not label it a scam so quickly. Don't say things like that until you know for a fact and you know more about the local happenings, it's not very nice.
I have no connection to this company at all.
Aloha, Pete
Most of the land here is owned by huge trusts or the Hawaiian Homelands that don't do anything and all they do is lease out the land for long term usage. Ag land for farming etc. They have so much land they would never get around to doing anything with it.
Aloha, Pete
We have hardwood growing in Vegas? News to me. All I ever see are palm trees and tumbleweeds.
We really don't have "suburbs" either. North Las Vegas, Henderson and Summerlin may as well be called Las Vegas. Once you get 1,000 feet away from the strip, it's all the same.
But I'm all for urban logging. Point me in the direction of something I can turn into furniture and I'll cut it into usable lengths and run it through my band saw -- no sweat. (Well, lots of sweat. We are talking about Las Vegas, after all.) Best of all, who needs a kiln? I can air dry in my livingroom!
Deflation: When I was a kid, an E-ticket meant I was about to go on the ride of my life. Today, an E-ticket means a miserable ride.