Econ 919 — Milling around

Aug 27, 2021

Credit Photo: Courtesy of Andrew Davis

When the world turned to home improvement projects at the start of the pandemic, Andrew Davis saw an opportunity. 

Davis co-owns Seward Milling and Lumber, just outside Seward city limits. But the company didn’t start out as a commercial mill. He and a partner first bought into the business to deal with the trees in their own yards.

When the pandemic hit, they started milling other people’s wood, too. And a year and a half later, they’re still really busy. 

He said a lot of other entrepreneurs had the same idea.

Andrew Davis: If you’re looking to get into the milling business you’re a little bit behind the game, because blades are hard to come by. So I'm very lucky with the box that just showed up today of blades. And mills are over ... if you go to Wood-Mizer in Anchorage, you're looking at over a year wait.

KDLL: Because everyone's trying to get into the business now? They recognize the need?

AD: Everybody and their brother has bought a mill. So yeah, the mills are in short supply, people are taking old mills and trying to sell them for a bunch. They're in short supply and people need ‘em.

KDLL: What have things been like for you guys? There's a lot of headlines about how lumber prices were through the roof, how everyone was doing these home improvement projects. What did it look like from your standpoint, with your business?

AD: Crazy. We're getting calls from everybody — from a slab for a table, to building a duplex or a barn and everything in between.

KDLL: What are things like now? At this point, we're in late August … have things settled down a bit for you guys?

AD: Absolutely not. I work part time on the mill and and part time offshore. And so when I'm home I'm going on the mill for two weeks solid. Pretty darn busy.

KDLL: With the cost of buying that mill and all the operational costs, were you able to make a profit off your business this year?

AD: Yeah, as operational costs ... I don't think we probably ...  if I was more gung ho and probably did it full-time, I easily could have paid everything off this year. But the mill itself, you know, it's a $40,000 mill, and then an extension, support equipment ...

And then this other piece of equipment, that four-sided moulder/planer, is another $15,000.

So there's quite a bit of investment when you get into milling. Blades and room and you know, pole barns and whatnot.

KDLL: Do you see yourself building out your business further? Or would you like, when this craze is all over, to go back to keeping it small?

AD: I'd like to keep it small. I’d like just to kind of mill on intermittently, and kind of mill my own projects and for friends and family.

I wasn't looking to get so ... so crazy.

KDLL: But it sounds like you're you're an opportunist. Like, you saw this kind of opportunity and you took it.

AD: Yep. Absolutely. Absolutely.

KDLL: Then I guess the last thing I would ask is, what advice would you give to folks who are looking to do their own home improvement projects and are struggling with the lumber market as it is right now?

AD: Cut some trees down or find some trees and bring them over to a mill somewhere, is my suggestion. 

But if you're looking for dimensional lumber, pressure-treated type stuff, stand tight and hopefully prices come down.

And what kind of irks me sometimes is people will clear, you know, a parcel of land or whatever, and have a bunch of downed trees. And first thing everyone thinks is, "I'm gonna cut it up into firewood." Well, there's a lot of good wood right there that you're underutilizing by turning into firewood. And just don't be so quick to turn everything into firewood.

KDLL: If there's one takeaway, it’s don't turn everything into firewood.

AD: Yep. There's plenty of good wood out there that gets wasted all the time. I see it.

Like, oh — that would have been a beautiful slab or that would have been a nice beam. But now it's in the woodstove.

This interview has been lightly edited and condensed for clarity.