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Dan Pejsa Transitions from Real Estate and Logging into Firewood: Hahn Machinery HFP160 Firewood Processor Converts Scrap Wood into Profits
California logger turns firewood business into a steady and profitable enterprise using fire processor from Hahn Machinery
By Carolee Anita Boyles
Date Posted: 11/1/2013
Enterprising business owners come to the forest products industry by many ways, and Dan Pejsa is no exception. Dan and his wife Stephanie were living the American dream in Sacramento, California, raising their family and struggling with the same bills and issues as everyone else.
“We were in the health care business and I was the conservator for a couple of my brothers,” Dan said. “I also worked for Deseret Industries as an appliance tech and manager for their appliance division. My job with them was how I was taking care of my family. But the needs of everybody outweighed my income, so I had to find a way to make some additional income.”
Another factor in Dan’s decision to make a change was that he had a collection of used appliances that he needed for parts and other uses stored at his house.
“It was kind of an eyesore,” he said. “You can’t do anything in the city unless you have a storefront, so I had to find a place where I could work.”
Dan started looking for a way to improve his situation.
“I was a flatlander with a little bit of farming background growing up,” he said. “I decided I wanted to get into real estate, but I didn’t have much money to do that.”
Dan started his real estate venture by purchasing four parcels of relatively inexpensive property in Berry Creek, California, but soon ran into the same surprise that greets many people who get started in real estate.
“I didn’t realize it took as much money as it did,” he said. “The properties had a lot of hardwood on them, because they had been logged a number of years before and never replanted. So I got a Timber Harvest Plan to rehab three of the properties. The other one was just going to be a select cut to help finance everything.”
Dan found out that logging also is a fairly expensive enterprise to enter.
“Everything led to ‘You need more capital!’” he said. “So I went to school and got a Timber Operator’s license.”
Dan started cutting small amounts of timber as he paid for permits to develop the properties.
“One thing led to another, and people found out that I did a little logging,” he said. “I bought a couple of trucks and finished logging the properties. But the firewood thing just kept coming at me. People kept asking, ‘What are you going to do with all this wood?’”
For almost ten years as the rest of the business was growing, Dan said, he cut small amounts of firewood by hand. After a decade of that, he just couldn’t do it anymore.
“I said, ‘I’m broken,’” he said. “I have to do something else.”
Dan borrowed a firewood processor from a friend of his, and used it for a while.
“I knew I had to have one,” he said. “So I started looking around. I found the Hahn Machinery HFP160 on YouTube and I thought it was a great machine. It—with a skid steer—looked like a viable solution for us.” Dan knew that having his own processor would make his firewood business a steadier and more profitable enterprise, so he and Stephanie scraped together enough money to purchase one.
Right away, they knew they had made a good decision.
“We went from about 20 cords in the winter to about 150 cords,” Dan said. “We got a little contract with a firewood company, and bumped up quite a bit in what we were doing. We went from breaking our backs to just working hard.”
Dan also started buying topwood and other scrap wood from local loggers, and using it for cutting firewood.
“It’s wood that was just going to waste if the logger didn’t have a chipper,” he said. “The tops of the trees were just getting wasted. The Hahn HFP160 is the right size to take that waste and make something out of it. So I’d take my dump truck and have the logger put the tops right into my truck and bring those home and cut them.”
By the time he purchased the Hahn HFP160, Dan also had his general contractor’s license and his business had a name: Dan Pejsa Construction.
“So I was at the point that if I needed to go do a job for someone, or clear a little land, I could use the contractor’s license to do it,” he said.
One thing that Dan really likes about Hahn Machinery is how they stand behind their equipment.
“In the past I had been very disappointed with warranties and with service contracts,” he said. “Gary Olsen, the president of Hahn Machinery, didn’t even imply any warranties, but every time I’ve called him and said, ‘Hey, I have a problem or I can’t quite figure something out,’ he has taken the time to walk through it with me. Then, if there’s a mechanical problem, Hahn has taken care of it.”
One problem that Dan ran into was that he’s cutting some longer pieces of timber than the Hahn HFP160 was designed to accept.
“I talked to Gary, and he said, ‘Just send it back,’” Dan said. “He told me that the changes I needed were good alterations, and that if I would pay for the shipping he would take care of everything else.”
Dan shipped the machine back to Hahn Machinery, and Gary made the alterations at no cost to Dan and returned it to him.
“They modified it and made it perfect for what we have going here,” Dan said. “So when everybody else says, ‘No,’ Gary says, ‘We’ll take care of it.’”
Gary said the processor that Dan bought was a standard unit that was intended for cutting short logs no longer than about 12 feet.
“He was cutting 16 foot logs,” Gary said. “In order to make a 16 foot log roll in, he had to pick up the log in the center and it would roll down the forks of the processor into the infeed trough, but it would extend into the splitting area. Then Dan would have to grip the log with the spike roller and conveyor and back it up. In so doing, he would hit the chainsaw guard, and it bent the guard. Or it would roll in crooked. It was a matter of trying to process long logs on a short log machine.”
When Hahn received the machine back, they dismantled it and added some posts, bumpers and guards, and reinforced other areas on the machine.
“It’s not unusual for us to make some changes and adaptations to a machine to accommodate a specific demand,” Gary said. “We try to anticipate everything, but we’re in Minnesota and Dan’s in California. When he said he was going to be cutting oak firewood, we didn’t know he was going to be cutting the long logs that are common out there. When we could see that what he was doing wasn’t working, we got together to try to make it work. That’s the beauty of being a small company; we can move quickly to make those changes.”
Most of what Dan is cutting is hardwoods.
“A lot of it is tanoak,” he said. “That’s kind of a prolific scrub oak that grows with a vengeance after logging is done. I don’t think we’ll ever have the threat of the tanoak being an endangered species.”
Dan also cuts some other species of hardwoods, including mountain oak.
“I’m also trying to get people to start burning some softwoods,” he said. “Right now there’s a lot of waste from cutting those trees. People chip a lot of it for fuel for the co-generation plants, but there’s still a lot of wood that doesn’t get utilized that could be either burned or milled with small mills. There’s a product there that could be utilized.”
All of the firewood Dan cuts goes to local markets.
“I use a newspaper ad, and I’ve sold a lot to Tony’s Firewood,” he said. “I’ve also started selling to Cooper’s Landscape. I’ve actually rented out my Hahn machine to him so he could try it, because he’s another guy who has been bitten by guys who talk a good game but don’t stand behind the machine. But now that he’s tried mine he’s convinced that it’s a good machine and he’s going to buy one too.”
Today, Dan works at a variety of facets in his business.
“I do some construction, and I scrap,” he said. “It’s kind of the American story. I do whatever I can to make money and enjoy life. I also still do some health care work; I have one brother who I still take care of.”
Because of changes in California law, Dan said, he made a decision to downsize certain aspects of his business.
“I had to sell two of my trucks and the trailer I was using to transport firewood down to Sacramento,” he said. “They were older trucks, and I couldn’t afford to do the clean air updates on them required by the new California laws.”
Stephanie works with Dan in his business.
“She supports me in every way,” he said. “She operates equipment, and does the backbreaking work right along with me. If we have to stack wood, we stack wood together. If we’re scrapping metal, we scrap together. When she was working for Feather Falls Casino, she would come home and help me finish up my day.”
Although Dan and Stephanie have grown children, those children have shown no interest in working with him in his business.
“They’re all off growing their own lives,” he said. “They all worked with me for a while, and learned some good values from working that hard. But when I told them that I wanted to grow the business, they all said, ‘Oh, no, we’re going to college.’”
Over the next few years, Dan said, he would like to see his business expand.
“I’d like to talk to Soper-Wheeler and Sierra Pacific,” he said. I’d like to do some processing and small milling, and I have space in the yard for it. As a developer, I’d also like to put in an RV park on some of the same property I’ve been using for the firewood. Then I could cut firewood for the RV park.”
Having the firewood business, Dan said, means that he and his wife will have an income no matter what happens.
“Because we live in a rural mountain area, the firewood business isn’t going to stop,” he said. “I’ll be able to utilize that, and Gary’s machine has allowed me to develop that business without breaking myself or just having to say, ‘I’m done.’ ”