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Productive at the mill—and I in the bush

Ontario’s Breen’s Lumber has a productive mill operation—including a new Precision Husky chipper—and an equally productive harvesting operation, fronted by a Ponsse Beaver.

By Paul MacDonald

t would be an understatement to say that medium-sized lumber producers in Canada are feeling the squeeze these days—and that squeeze can be as tight as a vise. Competitive markets and low prices are testing their resourcefulness, and many mills are battening down the hatches, so to speak, and going into survival mode.

Tim Breen, of Ontario’s Breen’s Lumber and Planing Mills, has seen a few industry cycles before and knows what to do—and what not to do—when you’re waiting for lumber markets to improve. In better times, Breen says, their mill produces about four million board feet a year, most of that in squares. “Right now, we have deals for about two million board feet a year, so we’re operating at about 50 per cent of our capacity,” he says. “We could do the extra production, and we could hustle to sell the additional wood, and things would be busier overall, but would we make any money? I really don’t think so.

“So we take the approach of whatever we have orders for, we produce,” Breen explains. “I’m not looking to go into the market to undercut other mills and increase our production at a loss.”

Breen takes a big picture perspective about the current downturn, noting the industry saw some good years before markets went down. “We’ve been riding the wave for a while. There have been a couple of bumps, but it’s been good.” While Breen is waiting for an improvement, he and the crew have been busy working to improve mill operations, with two new buildings and a new chipper, a 58-inch, six-knife Precision Husky unit.

Generally, they look to pick up used equipment, but the Precision Husky chipper is key to the economics of the operation. “It’s just not worth fooling around with,” Breen explains. “You want the chipper to work well, to give you and your customers good chips. If the equipment is worn out, you will get a worn out chip—the quality won’t be there.” On the used equipment side, they recently purchased a Morgan twin circular saw. “With this kind of market, you generally can’t afford to buy new equipment,” says Breen.

And he notes there is a lot of used equipment available, North Americawide. Their Morgan saw, for example, came from Minnesota, and was bought through LPS Equipment & Acquisition Co, Inc.

Though this was not the case with the Morgan saw, Breen notes that sometimes they will buy used mill equipment before they know exactly how they are going to work it in, simply because there can be some great deals out there. “We may pay $10,000 for half-a-dozen pieces of mill equipment, and even if we just use one or two of those pieces, we’re still way ahead,” he says.

The goal of the recent equipment changes and building additions at Breen’s Lumber is not so much to increase production, but to make the operation run smoother. “It will make things a bit easier—if we get in a situation where we are short a couple of guys, we can still have things working.”

Breen admits that he is a bit of mill tinkerer—he is one of those people who likes building mill equipment out of what’s on hand, and what might be available at auction. “I like taking things apart and making them work.” Rather than one mill, they have three smaller mill operations at Breen’s Lumber, made up of a huge variety of mostly used equipment. “One of the most important things is the equipment we have out there is paid for and it works,” he says.

Like everyone in the industry, Breen notes that they are caught in a classic cost squeeze situation these days—their operating costs, items such as fuel and the cost of timber, have gone up, while the price they are receiving for their wood has gone down.

Most of their timber—primarily red pine—comes from Simcoe County Forests, the publicly owned and managed forests in Simcoe County. The county takes in the rural area around the city of Barrie, Ontario, two hours north of Toronto. It is the largest municipally owned forest in Ontario, with nearly 30,000 acres under active management.

But even though they are closer to southern Ontario, Breen’s Lumber is seeing the ripple effect of mill shutdowns hundreds of miles away in northern Ontario, and the effect is not positive. There have been a number of sawmills in northern Ontario shut down—some temporary and some permanent—in this latest downturn.

Tim Breen (right, with son John) of Breen’s Lumber has seen a few industry cycles before and knows what to do—and what not to do—when waiting for lumber markets to improve.

While such shutdowns take a brutal toll on communities and employees, in an economic sense they can be positive, at least in theory, because these moves can help stabilize the industry, taking excess production off the market and raising lumber prices. But the shutdowns have, in fact, raised the cost of timber for operators such as Breen.

In the past, they were able to secure their timber—which is put out to bid by the County—fairly readily. They had the advantage of having their mill operation right in Simcoe County, meaning they did not have to move timber very far. But over the last several years, northern Ontario companies, have been extending their reach, and bidding for this same wood.

“In some cases, they are paying more for it on the stump than we would get for the finished wood, delivered to Toronto,” explains Breen. “If you converted some of the winning timber bids, what they are bidding is more than I get after I harvest the trees, truck the timber to the mill, run it through the mill, dress it and stick it and have it cylinder-ready for treating.” It’s clear that sometimes price does not matter to these northern operations— they just plain need to get the timber.

And unlike Breen, who can haul the wood to his nearby mill, these companies are sometimes looking at eight-hour hauls to their production facilities in northern Ontario.

Buying wood at such high prices may not make economic sense, but it’s likely this expensive wood “tops up” the cheaper timber the northern companies are able to source locally. “When they run short of wood up there, we know it,” says Breen.

Most of the timber for Breen’s Lumber— primarily red pine—comes from Simcoe County Forests, the publicly owned and managed forests in Simcoe County. It is the largest municipally owned forest in Ontario, with nearly 30,000 acres under active management.

In the past, these northern companies would have been able to source this wood, which is mostly used for pole production, from northern Ontario sawmills and logging contractors. The northern sawmills generally did not want these red pine logs for lumber production—it was kind of a niche market. But there have been extensive sawmill shutdowns, and logging operations have been cut back.

Added to this, some logs, which normally would go to these sawmills, are now headed straight to pulp mills for chipping. This new supply of fibre is creating challenges for the residual wood that operations such as Breen’s produces.

Breen’s Lumber, while it is focused on producing wood products, also has its own logging operation, with mechanical harvesting equipment: a Ponsse Beaver and Timberking 434 forwarder. The Beaver is operated by Tim’s son, Tim Jr. Two other sons, John and Dan, also work in the business. Tim’s wife, Deb, handles things in the office.

“The kind of harvesting equipment we’re using is usually geared to big production, but we don’t do that—we are thinning trees. But it’s the right equipment to do that,” says Breen.

They are generally working in red pine plantations, with some scotch pine and jackpine mixed in. “The Ponsse is a hell of a machine—it has features that we’ll never use.” But Breen adds it is the perfect equipment for moving around nimbly, doing thinning work in plantation wood. “That harvester has been worth every cent—it’s been a good investment.” He adds that it’s hard to think how they would be able to get the people to do the hand logging required if they did not have the harvester.

And, he says, it’s pretty hard to beat the harvester/forwarder combination in plantation wood. “Skidders and plantations just don’t mix well. Skidders don’t have the same maneuverability, and you can have problems with scarring trees.” They purchased the Beaver from Ponsse dealer, ReadyQuip of Timmins, Ontario. Tim Breen Jr does three major sorts in the bush with the Beaver: 4x4, 6x6, chipper wood, and some minor sorts.

Rather than one mill, they have three smaller mill operations at Breen’s Lumber, made up of a huge variety of used equipment, including a Valon Kone debarker (above). “One of the most important things is the equipment we have out there is paid for and it works,” says Tim Breen.

“With the sort done at the front end, the forwarder can keep up with it,” says Tim Jr. “If you had the harvester going full tilt, five forwarders could not keep up with it.”

Tim Jr says the machine performs well for them and maintenance is fairly straightforward—and so far, has been minimal. Powering the Beaver is a 175- horsepower Mercedes-Benz engine. The machine is equipped with a Ponsse H60e head, a mid-size, multi-purpose harvester head designed for both final cutting and thinning. The H60E is said to be a powerful harvester head in proportion to its weight and size. The head has a feed force of 24 kN and feed speed of five metres per second.

The decision to have both the harvesting and sawmilling done by the company dates back to when Breen Lumber was a much smaller operation, Tim Sr explains. “When the company was first started, I was the one who cut the trees and I was the one who was running the logs through the sawmill. We’d work in the bush for three weeks and, once we got enough to get up a load, we fired up the sawmill.”

Breen, in talking about their forest harvesting practices, emphasizes that when they go in, they are generally taking out the smaller trees with selective cuts and they tread carefully with the Ponsse Beaver and Timberking forwarder. “When we leave a bush,” he says, “it looks better than when we went in.”