Forestry logging cost breakdown: harvesting rights and the cubic-meter unit
Costing forestry logging the way the industry actually works — no purchased material like mining, harvesting rights or land lease depreciated against standing volume for the cycle, and skidding costed separately by terrain.
Forestry logging shares one basic trait with mining: there is NO purchased raw material - timber comes directly from the forest, not from a supplier. But it differs from mining in an important way: a forest can regenerate, so the largest one-time cost isn't drilling or excavation - it's the harvesting right or forest land lease for the cycle.
The costing unit: ONE CUBIC METER OF ROUNDWOOD harvested - raw logs before milling, a different unit from the wood-processing stage that follows.
The logging sequence
- Volume survey & harvesting permit.
- Extraction road opening within the tract.
- Felling.
- Skidding to the landing.
- Bucking & grading to specification.
- Loading onto transport.
- Transport out of the forest to the log yard/mill.
Two features unique to this industry
1. Harvesting rights/land lease - a large one-time cost, depreciated against standing VOLUME
The cost of a harvesting right or forest land lease for one cycle (from permit to completing that tract) is a very large one-time investment, the same principle as depreciating drilling cost in oil extraction: divide by the tract's TOTAL EXPECTED STANDING VOLUME, not by a fixed number of years - two tracts with the same rights cost but different volume will land on very different cost per cubic meter.
2. Skidding - cost depends on terrain, not a fixed line
Skidding logs from the felling point to the landing carries its own machinery/labor cost, separate from felling, because distance and terrain difficulty vary lot to lot within the same tract - don't apply one flat rate to the whole tract if the terrain isn't uniform.
Everything else
Machinery (chainsaws, skidders - mostly OWNED since equipment moves constantly between tracts). Labor (felling crew, skidding crew by shift or piece rate). Loss (off-spec stem sections left behind/rejected - the equivalent of scrap, costed as recovered volume against measured standing volume). Consumables (saw chains, skidding cable). Subcontracted work (volume survey service, specialized extraction service on difficult terrain). Rework (essentially no equivalent). Packaging (not meaningful for raw roundwood).
Freight - the leg from the in-forest landing to the main road is usually a separate and notably higher cost than the leg from the main road to the mill, because forest roads are harder going; cost these two legs separately. Overhead - forest management, fire prevention, and any required provision for replanting/regeneration after harvest.
Evidence
- Pre-harvest volume survey records.
- Harvesting permit/forest land lease.
- Logging log - felled volume, volume skidded to landing by day.
- Roundwood grading tickets at the landing.
Related guides
- Wood product manufacturing cost breakdown: sawing yield by volume, not weight
Costing raw lumber and panel manufacturing — the stage upstream of furniture, sawing yield measured by cubic-meter volume instead of weight, and engineered board adding a glue line and heat-pressing energy.
- The Ten Manufacturing Cost Categories, in Production Order
The ten cost categories Costdown uses to price a product — material, machinery, labor, tooling, scrap, rework, outsourced processing, packaging, logistics, factory overhead — with the formula and a worked example for each.
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