Wish List

Makeawish

The forest industry in Tasmania is heading towards oblivion, at least the part of the industry dependent on the public native forest resource. Decades of poor policy, politics and conflict have reduced the industry to a smoking ruin. But we seem to have trouble learning from past mistakes and from other people’s successes. Getting people to invest in the forest industry (from planting trees to investing in sawmilling and processing equipment) just won’t happen under the current regime. So here is my one dozen wish list:

  1. We need to start thinking of forestry as a primary industry and not as a Government-run, politically-driven, employment program. Sure it has a few unique features like a long investment time lag, but forestry is about business and profits; markets, costs and prices. It is not about politics or employment! Most wood now grown and sold in Australia comes from private tree growers. It is time to put the policy focus on private growers.One example of this change in focus would be to move Private Forests Tasmania (PFT) from the Department of State Growth Tasmania to the Department of Primary Industries, Parks, Water and Environment (DPIPWE). At the moment this DPIPWE website contains no mention of forestry at all:http://dpipwe.tas.gov.au/agricultureWhy isn’t forestry regarded as a primary industry in Tasmania?

    Also the Government Minister responsible for PFT/DPIPWE should also be responsible for Forestry Tasmania, so that all commercial forest policy and practice is aligned with primary industry policy. Does that sound logical or what?

  2. And like all primary industries the only basis for a successful forest industry is for tree growing (public and private) to be transparently profitable.That’s the golden rule! It’s that simple!Commercially focused, profitable tree growers are the foundation of a successful forest industry. The forest industry is not about subsidizing the sawmillers, papermakers, or woodchippers, or the furniture makers, craftsmen, luthiers or boatbuilders. These people are important, but without profitable tree growers they are irrelevant. Forest industry policy should be focused on profitable tree growers.
  3. We need to get the politics and conflict out of the industry. That means either a) completely transforming Forestry Tasmania into an independent, fully commercial, profitable business, or b) shutting down public native forest logging. There are no other options!
  4. Public and private tree growers must be able to compete in the marketplace on a level playing field. This means no more subsidies or political protection for public tree growers. Forestry Tasmania must be structured and managed just like a private tree grower – independent, fully commercial and profitable. Anything else is anti-competitive.
  5. The Tasmanian Farmers and Graziers Association (TFGA) needs to become a genuine independent, vigorous advocate for private forest growers. The interests of private forest growers are not the same as those of sawmillers, or Forestry Tasmania nor the Government of the day. A thriving commercially competitive, profitable forest industry can only exist when private tree growers have a strong, fearless, independent voice.
  6. It’s time for the forest industry (and I’m talking about everyone here from tree growers to wood processors and log exporters) to publically demonstrate some real commercial muscle. Where are the profits? Where are the prices? Where are the markets? Where is the transparency and market feedback? For far too long the industry has focused on political muscle. It’s time to “put the rubber to the road” and lead by commercial example.
  7. Unlike many other primary industry markets, Australia’s forestry markets have historically been opaque to near invisible, and continue to be that way. Hidden markets do not encourage investment in planting and infrastructure. The forest industry in New Zealand issues regular monthly market reports. This helps everyone better understand the marketplace. We desperately need similar transparency in forestry markets here in Australia.
  8. To help overcome the natural reluctance of many people to make the long-time investment in forestry (the time between planting and harvesting), the industry needs to be incredibly (aggressively??) transparent in the marketplace. This means lots of market reports and updates, lots of price and demand information, etc. We need significant market stimulation to help landowners get past the big time factor!!
  9. Farmers need to have greater understanding and confidence in forestry markets. Again this requires forestry markets to be much more transparent and commercially focused; just like other rural commodities. Investing in forestry is not easy. There’s the technical stuff and the long investment period, and just the switch to thinking “long term”. When we start getting forestry market updates in the rural media then I will know that the forest industry has come of age.
  10. The forest industry needs a new Forest Practices Code, or rather it doesn’t. Let me explain.The forest industry in New Zealand is huge (bigger than Australia’s) and very successful, but New Zealand does not have a Forest Practices Code. Imagine that! In New Zealand they regard the forest industry as just another primary industry, which must abide by the same code of environmental practice as all the other primary industries. It’s called a level playing field.The code is called the Resource Management Act 1991, and it applies to most primary industries. It is designed to protect environmental values regardless of land use. So growing trees for wood production has the same regulatory framework as other primary land uses. A brilliant idea!Here in Tasmania the forest industry is far and away the most (over?) regulated primary industry in the State. This creates market distortions and discourages sensible land use and investment decisions.Forest plantations on already cleared land should be no more or less regulated that any other agricultural crop. For many Tasmanians that will be a very difficult thing to imagine after the MIS hardwood plantation disaster.

    (And whilst on the subject of New Zealand, the forest industry there survives without any resource security. That’s right! Whatever trees the private forest growers have to sell is the only resource available to industry. That’s all. If a sawmiller wants “resource security” then they need to pay a competitive price to stay in business. The issue of “resource security” is a furphy!)

  11. And following on from the previous item, why do we have Private Timber Reserves in Tasmania?http://www.pft.tas.gov.au/index.php/services/services/1-website-articleWhy not Private Onion Reserves, Private Poppy Reserves, Private Cow Reserves or Private Apple Reserves? In fact why not make all primary industries subject to a single Statewide planning system? Wouldn’t that be fairer? We could even call it the Resource Management Act!
  12. And finally I’d like to see Tasmanian farmers incorporate commercial blackwood growing into their business models (either plantation or native bush), developing the skills, passion and expertise in growing this iconic quality Tasmanian product. But this won’t happen to any extent unless change occurs within the forest industry and Government policy.

When you compare my wish list with the current forest industry you can see an enormous abyss. Current forest policy is focused on a public native forest resource, a bankrupt, non-commercial public forest manager, a handful of taxpayer-subsidised sawmillers and processors, and enormous amounts of politics and community conflict. It has been this way for decades!

It seems that none of this will change unless the TFGA (on behalf of private forest growers) start demanding reform. And based on recent events I can’t see this happening any time soon.

What do you think? Comments? Continue reading

Gagged!

gagged

Isn’t this just so predictable and pathetic?

Just when we start to get some real debate and transparency into the Tasmanian forestry wars along comes the Honourable Minister and slams the door.

It was so newsworthy that it made both the major State news media.

http://www.abc.net.au/news/2015-06-19/forests-minister-tells-advisory-council-to-keep-opinions-private/6559572?section=tas

and

http://www.themercury.com.au/news/politics/resources-minister-paul-harriss-puts-clamp-on-forestry-tasmania-talk/story-fnpp9w4j-1227406689089

What is the purpose of an advisory council if “everyone is on the same page”? That’s not an advisory council. That’s a political smokescreen, a whitewash!

The whole purpose of an advisory council, as Sue Smith said, is to promote and foster vigorous, open discussion and canvas as wide a range of opinions and options as possible.

The Tasmanian forest industry is going absolutely nowhere until the future of Forestry Tasmania is resolved. And after 21 years we know that the GBE business model has been a total failure. Forestry Tasmania remains the “albatross around the neck” of the forest industry.

So vigorous and open debate about this issue is absolutely fundamental.

And yesterday the State government shut that debate down.

Judging by the response in the media the Tasmanian community is absolutely sick and tired of the continuing political games and squandering of taxpayers money on the forest industry. But the advisory council and our politicians just aren’t listening.

The issue of retaining skills is yet another forest industry furphy. The one and only skill that Forestry Tasmania needs right now is to be fully commercial and profitable. Without this fundamental skill everything else is completely irrelevant.

The advisory council is now a lame duck with no integrity, credibility or purpose. Send the bill to the Tasmanian taxpayer.

When will Tasmania get a fully commercial profitable forest industry?

TFGA supports continuation of failure

TFGA_Skillern

TFGA CEO Mr Peter Skillern

Well the TFGA retains its historical position as being incredibly conflicted and confused about the role of the private forest grower and the future of the forest industry in Tasmania.

http://www.abc.net.au/news/2015-06-19/tfga-supports-forestry-tasmania-dismantle-discussion/6558536

With the Forestry Tasmania GBE business model being shown to be a complete disaster over the past 21 years the TFGA comes out today and says that’s fine, keep it going!

It’s pretty pathetic and shows a complete lack of independence and vision.

Typical!

Private forest owners now dominate the forest harvest in Tasmania for perhaps the first time ever.

State forest policy should now be focused entirely on building a profitable, commercially focused private forest grower base.

But the TFGA appears not to want this. Instead the TFGA wants State forest policy to remain 100% focused on the public forest resource and a failed GBE.

More politics and conflict and a failed forest industry.

The TFGA is the only representative and voice of the private forest grower in Tasmania.

I just don’t understand!

At least Sue Smith had the guts to have a go and say something different.

IST Blackwood Sawlog Tender Results 2014-15

IST 0515 log 16

Here is a summary of blackwood sawlog tender results from Island Specialty Timbers (IST) for the 2014-15 financial year.

http://www.islandspecialtytimbers.com.au

This follows my inaugural report last year:

http://blackwoodgrowers.com.au/2014/06/14/blackwood-sawlog-tender-results-2013-14/

During the year 14 lots of blackwood logs were put to tender by IST. These were individual logs except for two parcels of small logs in the October 2014 and January 2015 tenders. Only one log was unsold for the year from the August 2014 tender.

Total volume of blackwood logs sold was 31.06 cubic metres (or approximately 0.3% of the total volume of blackwood logs sold by Forestry Tasmania for the year) for a total value of $20,660.

Plain grain logs in 3 lots totalling 18.7 cubic metres sold for an average volume-weighted price of $227 per cubic metre.

Feature grain logs totalling 12.4 cubic metres sold for an average volume-weighted price of $1,325 per cubic metre.

These good prices were achieved despite many of the lots having quality issues (spiral grain, flutes, branch stubs, small diameter). Some of the lots could best be described as craft logs.

This compares with the special timbers average mill door log value of $134 per cubic metre that Forestry Tasmania received in 2013/14.

There was such a variety of log grades and qualities in these 14 lots that for analysis and summary I’ve grouped the logs into just plain and feature grain, as these seem to be the main determinants of price.

In general logs sold by IST are smaller and with more defects compared to logs sold under long-term contract to favoured customers. They do not represent average “run-of-the-bush” quality logs.

Table 1 summarises the tender results.

  Lot count Average of SED (cm) Average of Len (m) Average of Vol (m3) Sum of Vol (m3) Average of Unit Price ($/m3) Total Price ($)
Plain 3 44 5.9 1.0 18.67 $302 $4,244
Figured 10 60 3.9 1.2 12.39 $1,280 $16,420
Sold 13 57 4.3 1.1 31.06 $1,054 $20,664
Plain 1 69 2.4 1.2 1.20
Unsold 1 69 2.4 1.2 1.20

The highlights for the year were:

  • One small feature-grain log that sold for a unit value of $2,400 per cubic metre in the January 2015 tender, and
  • A log (1.6 cubic metres) that sold for $3,260 ($2,000 per cubic metre) in the February 2015 tender, which contained some feature grain but also had significant quality issues (sweep and spiral grain).

The lowest unit price for the year was achieved by the parcel of 13 small plain-grain logs in the October 2014 tender. This parcel totalled 10.1 cubic metres in volume, with average dimensions SED 42cm, LED 47cm, Len 5.0m, vol 0.78 cubic metres. This parcel sold for $200 per cubic metre.

Only one of the logs tendered approximated in size and quality what might be grown in a well managed blackwood plantation. This was Lot 20 in the March 2015 tender that sold for $620 or a unit price of $485 per cubic metre. This is a very good price and puts the value of a blackwood plantation at harvest at well over $100,000 per hectare!

Are any Tasmanian farmers interested?

In 2013/14 IST sold a total of 1,531 cubic metres of product including 136 cubic metres sold through the tender process “to ensure that the best possible prices were obtained” (Forestry Tasmania 2013/14 Annual Report). Only 16.1 of the 136 cubic metres (12%) was blackwood, despite the fact that blackwood comprises 80% of the special timbers harvest annually. I wonder how much of the 1,531 cubic metres of product was blackwood? We will never know. Frustratingly Forestry Tasmania don’t tell us how much the 1,531 or the 136 cubic metres sold for.

These tender results represent the only publically available competitive market prices for blackwood sawlogs. Given that blackwood is the only Tasmanian specialty timber that has the potential to have a commercial future these prices are important in alerting Tasmanian farmers and the wider community to the commercial opportunity that is available.

One thing that is clear from watching the regular IST tender results, the special timbers market is capable of paying extremely high prices for quality special timber logs as evidenced by the massive $5,900 per cubic metre paid for a tiger myrtle log at the April tender.

Caveats:

  1. Island Specialty Timbers (IST) is an enterprise of Forestry Tasmania established in 1992 to increase the recovery, availability and value of specialty timbers from harvesting activities in State forests.
  2. Forestry Tasmania manages its special timbers operations (including IST) as a taxpayer-funded, non-commercial, non-profit, community service.
  3. Note that all logs and wood sold by IST comes from the harvesting of public native old-growth forest and rainforest certified under AFS (PEFC).
  4. It is unlikely that this tiny set of market-based blackwood log prices is representative of the broader blackwood market.
  5. The dataset is too small to allow any analysis or correlations to be made between price and log quality apart from the obvious result that feature-grain logs attract a significant price premium over plain-grain.
  6. Remember also these tender prices are effectively mill door prices that already include harvesting and transport costs. They are not stumpage prices.

It would improve market transparency and stimulate greater investor interest if IST would tender more blackwood logs and demonstrate real commercial focus. Increasing the blackwood volume tendered to even 100 cubic metres per year would be a good start.

But whilst Forestry Tasmania, the State government and the State parliament all regard the special timbers industry as a community service and political play-thing rather than any commercial opportunity, then blackwood’s commercial future remains difficult.

When will Tasmania get a fully commercial, profitable forest industry, based on profitable tree-growing?

Taylor Custom GA 12-fret Blackwood / Red Cedar

There hasn’t been much in the way of new guitars featuring Tasmanian blackwood lately, but here is a one-off custom from Taylor Guitars via The Acoustic Letter.

A lovely little guitar, very nicely presented by the people at Taylor for a straight-grained (as distinct from feature-grained) blackwood guitar; and a great review from Tony Polecastro (& his amazing fly-catching pooch).

This one-off custom guitar is only available at The Acoustic Letter.

http://acousticletter.com/shop/taylor-custom-ga-12-fret-blackwood-red-cedar/

Happy viewing!

Eye fillet, sausages and guitars

cow

I’ve recently been engaged in an email discussion with the supply chain manager of a major guitar maker that has opened my eyes to some of the wood resource and marketing issues facing the industry.

The conversation started when I enquired whether the company would be interested in buying farm-grown Tasmanian blackwood to use in their guitars. The unequivocal answer came back that to date the company has found it difficult to sell guitars made from Tasmanian blackwood and hence would be reluctant to purchase more timber.

This and a few other comments they made got me thinking.

For the past 100 years and more the guitar industry has been able to access the very best cuts of wood available from around the world with which to build guitars. Rosewood, mahogany, ebony, quilted koa and maple, etc. All of these premium cuts have been accessible largely due to the plundering of the worlds old-growth and rainforest that is now coming to an end.

The guitar industry was like a butcher shop that only sold eye fillet steak. No mince, no sausages. Just premium quality meat. The fact that the rest of the forest products went to other markets helped the guitar industry enormously.

But the wild herds of bison, like the old growth and rainforests, have nearly all gone. Now the butcher shop has to start stocking rump steak, as well as the mince and sausages in order to stay in business, but after 100+ years the customers are finding it hard adjust to this change in diet.

So too the guitar makers are finding it difficult to identify and source sausages and mince that customers might want to buy. Many guitar makers appear to still be peddling nothing but premium cuts.

The words “alternative woods”, “sustainable” and “certified” are slowly becoming part of the daily life for guitar makers, and less so for consumers.

But the butcher shop analogy does have its limitations.

Many of these alternative woods are perfectly good for making quality guitars. In no way do they reflect a move to mince or sausage grade timber, but they do reflect the changes being forced upon guitar makers and reluctant consumers by a changing wood resource. But to the ordinary guitar buyer it feels like an eye fillet vs sausages decision.

What’s worse, the eye fillet, mince and sausages are often all priced the same. So given the choice the consumer is reluctant to try the alternative woods. I think this has been one of the problems with introducing Tasmanian blackwood onto the international tonewood market. Customers often need some incentives to try a new product.

And it’s not just new species of timber that is challenging guitar makers and buyers.

In some cases the eye fillet steak has simply been wood that is highly figured like maple and koa, with plain, straight-grain maple and koa having never featured in the guitar market to any extent. So the above major guitar maker has excess quantities of straight-grain koa and maple wood that they cannot sell to the guitar-buying public. Beautiful timber and great for making quality guitars but it’s just not eye fillet steak!

This is curious because straight grain rosewood and mahogany are perfectly acceptable to the guitar buying public. Years of being fed eye fillet steak has clearly made the market resistant to change.

Now from a forester and commercial blackwood grower’s view point all of this is a bit of a disaster.

Going back to the butcher shop again, a cattle farmer would quickly go out of business if they could only sell eye fillet steak. To be viable the farmer has to sell the whole animal with the various cuts of meat priced according to the supply and the demand. Basic economics 101.

Ditto for tree growers. Highly figured wood is rare. Straight-grain wood is more common. But the guitar market doesn’t reflect this supply situation, either in price or in marketing.

If guitar makers want to help tree growers, then they need to adjust their product development, marketing and sales to better reflect the supply situation regarding plain vs feature grain timber. Plain grain koa, maple and Tasmanian blackwood are great quality tonewoods just like plain grain mahogany and rosewood. Feature grain wood of any species should attract a premium price that is clearly over and above plain grain guitars.

Some guitar makers are better at product design than others. Putting a clear finish on a plain grain guitar especially if the wood is new or alternative may not meet with much buyer enthusiasm. Staining, edge-shading,  a bit of bling, and a price to encourage buyer interest will go a long way to help overcome the conservative guitar buyer.

But for the moment it seems that this major guitar maker won’t be encouraging Tasmanian farmers into the commercial blackwood tonewood market anytime soon.

Comments and ideas?

UNESCO calls for changes to Tasmania’s draft World Heritage Management Plan to prohibit logging and mining

DTWWHAMP

In the ABC News yesterday:

http://www.abc.net.au/news/2015-05-30/unesco-calls-for-world-heritage-area-draft-plan-changes/6508506?section=tas

So the UNESCO World Heritage Committee is now questioning the policies of the Tasmanian State Government.

In Paris overnight, UNESCO’s WHC urged the draft plan be changed. An initial review cited concerns that the plan appeared to create potential for logging operations and mining activity in the World Heritage Area.

An article by Vica Bayley on Tasmanian Times provides more details:

http://tasmaniantimes.com/index.php?/weblog/article/unesco-drafts-a-damning-rejection-of-world-heritage-management/

The draft decision of the World Heritage Committee, for consideration at its [forthcoming] June meeting, represents a damning rejection of the Tasmanian Government’s proposed management of Tasmania’s World Heritage Area.

The draft decision identifies ……. prohibiting logging and mining via upgraded conservation tenure as key actions that need to be taken.

Informed by expert reports from the Committee’s advisory bodies, the draft decision …. urges … that commercial logging and mining are not permitted within the entire [WHA] property, and that all areas of public lands within the property’s boundaries… have a status that ensures adequate protection (p. 56).

The draft Committee decision can be found at:

http://whc.unesco.org/archive/2015/whc15-39com-7BAdd-en.pdf. (1.8MB pdf file).

Pages 54 and 56 of the document are the most relevant.

It appears that Tasmania’s special timbers industry is fast running out of options, at least in terms of access to a taxpayer subsidised public forest resource. The World Heritage Committee will not accept special timbers logging within the Tasmanian Wilderness World Heritage Area.

Here are some of my previous stories about the Draft Tasmanian Wilderness World Heritage Area Management Plan:

http://blackwoodgrowers.com.au/2015/02/10/draft-twwha-management-plan-representation/

http://blackwoodgrowers.com.au/2015/03/25/tourism-council-sees-the-light/

Curiously the ABC news article says that the Tasmanian tourism Industry supports the draft Plan, when in fact the Tourism Council’s own submission is extremely qualified in its support, with strong opposition to the logging and mining proposals in the Plan.

http://blackwoodgrowers.com.au/2015/03/09/deloraine-stringfest-world-heritage-area-logging/

So when will Tasmania get a fully commercial, profitable forest industry?