Diversification Eases Stress For Forest Enterprises Inc.
By Jeff Mullins
As a seasoned logger, Brandon Epling jokes about the ups and downs in logging, “I have given up on making my first million and now I am working on my second.” Although he enjoys being a logging contractor and continues to log, recent shifts in his attitudes and activities are making his life both more meaningful and more profitable.
As owner of Forest Enterprises Inc., Brandon harvests timber near his Banks, Ore. home to produce approximately 1 million board feet annually. With 17 years of experience in the timber industry, he says he has seen the best and the worst that logging has to offer, and he wants more than can typically be expected from a seasonal industry plagued by increasing regulations and wide market swings.
Seeking an Even Footing on Uneven Ground
Adding a tower to his ground operation enabled Brandon to work during soggy Oregon winters, but he encountered drawbacks as well. Attracting and retaining good employees for a tower crew required securing even more work to provide them year round, full-time employment. Downscaling to a log loader with drums allowed more versatility, with fewer crew requirements. Even with new equipment, operating expenses have increased, and there is more pressure to keep employees and equipment on the job to constantly produce an income.
For a decade, Brandon operated his own log trucks to reduce transportation costs and increase flexibility. When his truck driver retired after nine years, Brandon sold his trucks rather than securing another reliable driver.
Brandon admits, “In the past, my goal was to grow my company into a large operation, but I realize now that bigger logging operations do not stabilize incomes, they only magnify the swings.” Brandon’s religious faith has led him to realize his family is more important than his work. He wasn’t willing to have children who are “logging orphans” for the sake of chasing a dollar. He offers, “God has shown me that no matter how hard I work, or how smart I work, there are many things over which I have little control.”
Brandon offers several reasons for the uncertainties faced by logging contractors. Competition is steep for available harvesting jobs. Work is slow when the market is down. But when the market is good, loggers come out of the woodwork making it hard to work year round, even in the best of times. Equipment gets better and faster all the time, but this means fewer people are needed, further increasing competition. Equipment and fuel prices
are rising faster than the price of logs. Additionally, increasing regulations, difficulty finding good employees, as well as the dangers faced every day, demonstrate that being a profitable logger is a challenging endeavor. “And,” he adds, “attaining financial stability as a logger is a goal beyond the reach of most in today’s environment.”
Loving Logging Keeps Him Going
Although Brandon’s favorite task is falling timber, for the most part, contractors fell his trees. Most of Brandon’s time is spent merchandizing the fiber with a carefully chosen combination of ground equipment, and marketing the logs in the most profitable way. A Caterpillar 322B log loader anchors Forest Enterprise’s operation and is used for shovel logging whenever possible. Logs too far from the landing are bunched with the loader and skidded to the landing with a swing grapple equipped Caterpillar D4H high track.
Whenever the loader is being used to swing logs, Brandon is also piling brush to minimize required trips, reduce ground disturbance, and optimize ef- ficiency. A rubber-tired Caterpillar 518 skidder with a winch is also available as needed. By design, Brandon fields only one make of equipment, to simplify access to service and parts.
Careful Marketing Pays Off
He explains, “There is a wide variety in the way mills pay for logs and it is somewhat complicated. By carefully considering variations in stem height, diameter, and taper, more value can be obtained from each tree. The distance from the mill and transportation cost must also be considered.” He adds that marketing timber is not accomplished by any easy formula, but by looking at all the variables. On the day that TimberWest visited, Brandon was sorting primarily for export, but he was also choosing logs to ship to a log home manufacturer at a premium, netting more profit for the land owner. He likes to log on a percentage basis but prefers to log by scale if someone else is doing the marketing.
Brandon observes that “Each year has enough logging work to get by.” But his desire to do more than “just get by” has led him in another direction that supplements his income and stabilizes his life.
Stabilization Through Diversification
Instead, he is investing in residential properties with the goal of establishing long-term residual incomes. As a logger, he had no retirement and no faith in Social Security, but by careful investment in real estate, he is building a nest egg that will provide his family with an income whether he and his equipment are working or not. “Most people live on a fixed income and spend all they make. Investing first requires budgeting to distinguish between essential and frivolous expenditures so there will be money to invest,” says Brandon. “Investing is making money work for you, rather than you working for money.”
He suggests investors determine the venue for investing and learn everything possible about it, by reading and researching. He cautions people to be selective about the advice they take. “Not every book or person is providing good advice. Only consider advice from people who are truly successful at what you want to accomplish.” Finally, he advocates building a network of people related to the investment type.
It’s About More Than Money