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Thursday, February 18, 2021 Wairarapa Times-Age
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www.age.co.nz Thursday, February 18, 2021
FORESTRY IN WAIRARAPA What is biodiversity and who cares? A series of surveys completed by Beef + Lamb NZ have recently highlighted the lack of understanding of what biodiversity is in a land management sense, and how it rates in importance for either potential profits or other benefits. Some landowners rate it highly but for different reasons, and we seem to have no common understanding of why it matters or how to achieve it in New Zealand under our differing land uses. Biodiversity is just a fancy term for variety. And the more variety we have in plants and animal species, then the better off we are. These ecosystems ensure natural sustainability for all life forms. This diversity of systems gives all land users more flexibility and adaptive responses to challenges such as climate change, or disease, or where markets have suddenly changed.
Forest ecosystems are worth far more than just the value of their wood. Their biodiversity and forest ecosystems are increasingly recognised in New Zealand for providing services that include climate change mitigation, habitats for native species, recreation, improved water quality, avoided sedimentation and flood control. Pine forests are measured with far more biodiversity than either pasture or horticultural land with the added benefit of doing it fast. Birds do not much care what habitat you provide but would prefer a closed canopy forest in 15 years rather than 50, and this is how long many planted natives will take to catch up with pine, with the issue of no timber crop at the end. Most forest owners in New Zealand are registered and have to comply with the rules governing the FSC system. (Forest Stewardship Council) This rigorous international organization gives our New Zealand timber an endorsement that it is produced from forests meeting
many measured criteria, and biodiversity levels is one of them. To meet FSC standards there are regular audits and most forestry companies now hire dedicated staff to keep track of the huge number of requirements for this process in order to keep their accreditation as many markets now demand this overseas. For forestry, biodiversity is not just a “nice to have”, it’s a necessity to meet market requirements and a longstudied mechanism in pine forests that have been around in New Zealand for nearly 180 years, so we care very much as this measurable can mean the stamp of approval for our timber and hence, more profit, at the top of the list of benefits that production forests will leave long-term for the landscape.
Wood is Good Primary Schools Program Funded by the Ministry for Primary Industries, this program has extended across New Zealand with 50 sessions planned at primary schools in each region. A partnership of forestry and road transport safety, local forestry companies bring representatives and a loaded log truck to a primary school to talk about safety with log trucks on the roads, why we have plantation forests in New Zealand, where those
logs have come from, and where they are going. The aim of this program is to increase awareness of children of the benefits that forests provide in our communities and how our plantation timber is used
for our products every day. Drone flying, book readings, and speaker sessions with local professionals are part of these days. Uptake around New Zealand has been overwhelming with an obvious necessity for
this type of information and engagement from our sector. If you wish to nominate your school for a “Wood is Good” session contact woodisgoodnz@gmail.com
Log Market Update
efficiency. Many of the ports are struggling to move the current production levels through the system let alone any increases.
So, here we are with A grade in the mid $140’s. Chinese inmarket softwood inventories are at the lowest level since late 2016, zero supply from Australia and a relatively high exchange rate. Chinese Lunar Celebrations are currently starting and we have seen daily sales drop to around 60Km3 from 85Km3 in early January. It is expected that this usage will drop to miniscule volumes for February before returning with some gusto in March following the almost month long holiday. Inventory will build through this period as we keep the foot on production throttle in NZ. However, as we are heading into the Chinese holiday period at a very low inventory position, we don’t expect to see any negative price pressure in the short term.
The Chinese market remains very strong with continued government stimulus pushing Chinas’ GDP forecast to 8.2% for 2021 from 2.3% in 2020. The Chinese real estate market has rebounded post-Covid and is showing positive signs for 2021 although the government has hinted at a crackdown on speculation.
Even at the current price levels, it is hard to see any significant increase in NZ production or supply volumes. Harvesting crews are all generally in work, trucks are working to capacity and it is highly unlikely the rail network will increase its
All in all its looking positive and forest owners are making tidy returns on their forest investments. Domestic markets continue to be strong with many sawmills short on log inventory and long on timber orders. MARCUS MUSSON Director Forest360
WE ADD VALUE AT EVERY STAGE OF THE GROWTH CYCLE Secure your seedlings now and leave your forest establishment in the hands of our experienced forest managers.
• Forest Management • Silviculture • Forest Valuation • Establishment
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Europe is the one outlier with a significant volume of wood available due to widespread bark beetle infestation. This volume has been more subdued that expected as container freight cost has increased markedly and supply reduced thanks to Covid. Russia has proposed a ban on log exports from the beginning of next year and buyers are already looking to secure supply from other sources.
Whatever gains are made will likely be wiped out with rising shipping costs. Strong commodity demand and higher oil prices are pushing shipping costs north and shipping companies currently hold a hand of aces during a period in which the freight market is traditionally soft. Foreign exchange has not been playing ball with an increase of $NZ4 cents in the past 3 months. Rule of thumb is a reduction in real returns of $2/log tonne for every cent increase in the $NZ:US.
THINKING OF PLANTING THIS YEAR?
OFFICE 06 377 4443 GUY FARMAN 0274 488 810 EMAIL Guy@ftf.co.nz WEBSITE www.FTF.co.nz
• Harvesting • Log Marketing
Other supply points have not had any impact on inventory levels with Australia being shown the door (9% of total supply) and supply from USA & Canada approximately half of their peak in 2018.
The three main components that make up the export price that forest owners receive are delivered sales price in $US in the export market – known as the CFR price (Cost and Freight), shipping cost and foreign exchange rates between NZ and USA. The CFR price is forecast to rise post February.
06 379 8600 • office@ahnzl.com www.amalgamatedheli.co.nz
• Forest management and operations, e.g. planting, spraying, thinning, pruning. • Harvest planning, management and log marketing. • Carbon & ETS advice including the sale/purchase of credits. • On farm land use assessments – financial modelling, carbon profiles, marginal land options & grant funding assistance. • Change of forest ownership/succession advice (ETS implications). • Forest valuations and inventory, feasibility assessment and planning. www.forest360.nz | 0800 366 700 70D Chapel Street Masterton | info@forest360.nz