Wish List Revisited

Makeawish

The recent Ministerial Statement by Tasmanian Resources Minister Guy Barnett, and the strong negative reaction it provoked from both the community and the forest industry got me thinking about the wish list I wrote last year.

http://www.premier.tas.gov.au/releases/ministerial_statement_-_forestry

So I’ve decided to update my Wish List.

Does Tasmania want a successful forest industry?

If so then here are a few ideas:

  1. Government policy

Tasmanian Government forest policy continues to focus on public native forest, a failed State forest agency, and protecting local jobs at any cost. If we adopted this same thinking for any other primary industry Tasmania would be an economic basket case. Our politicians and large sections of the forest industry and the community still think of the forest industry as a community service, a government employment program.

Sorry guys but it’s the 21st century.

The only basis for a successful modern forest industry is profitable tree growing.

Most wood now grown and sold in Australia comes from private tree growers.

It is time to put the policy focus on profitable private tree growers and away from public native forest and a failed State forest agency.

Implementing the Federal Government’s Farm Forestry National Action Statement 2005 would be a good place to begin.

http://www.agriculture.gov.au/forestry/australias-forests/plantation-farm-forestry/publications/farm_forestry_national_action_statement

 

  1. Government structure

We need to think of forestry as a primary industry and not as a Government-run, politically-driven, taxpayer-funded employment program.

One example of this change 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/agriculture

Why isn’t forestry regarded as a primary industry in Tasmania?

Why isn’t Private Forests Tasmania part of DPIPWE?

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

  1. Private Forests Tasmania

Following from the above logic Private Forests Tasmania needs to become the dominant Government forest agency, NOT Forestry Tasmania.

  1. Forestry Tasmania

And following on we need to get the politics, conflict and the anti-competitive policies 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.

  1. Plantations

The future of the forest industry is plantations. And like all primary industries the only basis for a successful forest industry is for (public and private) tree growing to be transparently profitable. The forest industry and the Government need to do everything they can to encourage profitable market-driven plantation investment. No scams!! See below for my comments on forest practices and markets and transparency for two ways to achieve this.

  1. Native forests

If there is any value/profitability at all left in logging Tasmanian native forest it must be pretty marginal. The Tasmanian Oak brand has been pretty well trashed over the last 50 years. Commercially managing native forest is a very costly operation. The only way it can be viable is by producing very high value products from most of the resource. This has never happened. Certainly in the pulp and construction markets, which account for the vast majority of the wood market, native forests don’t stand a chance competing against plantation-grown wood.

  1. Special Timbers

Using scarce taxpayers money to cut down 400+ year old public native rainforest and oldgrowth in the 21st century, with the excuse that special timbers are an essential part of “Brand Tasmania”, makes no sense whatsoever. All wood production must be fully commercial and profitable. There must be no community-service forestry in Australia. Given that blackwood makes up the vast majority of special timbers production anyway, and it can be grown in commercial plantations, the focus of special timbers policy must change.

  1. Forest practices

I have four thoughts here:

  1. The current Tasmanian forest practices code was developed when community-service public native forestry dominated the industry. However in the spirit of over-regulation it provided a significant hurdle to private plantation development. The forest practices code needs to be reviewed within the light of the following three comments.
  2. We need to create a primary industries level playing field when it comes to environmental management, so that regulation does not distort land use decisions. New Zealand has this approach to “forest practices” with their Resource Management Act 1991. I don’t see why Tasmania should not follow their example.
  3. Following on from b) the Tasmanian Forest Practices Authority should be merged with the Tasmanian Environmental Protection Authority to provide environmental monitoring, regulation and research services across all jurisdictions. Why does the forest industry need its own separate environmental regulation system?

http://www.fpa.tas.gov.au/

http://epa.tas.gov.au/

  1. The Australian forest industry should work towards developing a single set of national plantation management guidelines for the whole country as much as it is able within the maze of different State jurisdictions. At the moment regulations governing plantation management vary enormously across Australia. This is stupid and anticompetitive. It will be a long process but a worthy goal.
  1. Tasmanian Farmers and Graziers Association

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. The TFGA is the only option currently available.

  1. Competition, prices, markets and transparency

The forest industry in Australia hates open market processes and transparency! This is not surprising given its history. When was the last time you saw a forestry market report in the Australian media? When was the last time you saw a sawmiller hang out his slate looking to buy sawlogs?

In my books this is the major challenge for the industry. There have been a few attempts in the past to change this but they have failed due to lack of industry support. The industry will have no future until it becomes fully commercial – aggressively commercial!!! It’s all about competition, prices, markets and transparency. Farmers will never take the forest industry seriously until this happens.

  1. Where to begin?

Tasmania is a great place for growing trees for wood production.

But Tasmania is a small island a long way from world markets.

Because of our size and remoteness we cannot compete well in commodity markets like pulpwood and construction timber. We must think small volume high value niche markets such as appearance grade timbers and timbers for specialty markets. New Zealand farmers are doing this. But it needs focus and a strategy, not a random shotgun approach. One obvious example is macrocarpa cypress. There is a growing demand for this timber, as a handful of people in Tasmania know very well. NZ has thousands of hectares of cypress plantation growing on farms. Why doesn’t Tasmania?

  1. Blackwood

Tasmanian blackwood provides another ideal example of a low volume high value forest product with which to help rebuild the forest industry. Quality appearance grade timber will always be sort after in the market, especially the super premium market. Tasmania could easily be producing 30,000 cubic metres of premium blackwood sawlog per year with the right policy and industry backing. At $500 per cubic metre that equates to $15 million in farm gate value per year. So where is the policy and industry support that will make this happen?

 

Unfortunately all of these ideas are so beyond current forest industry and political thinking they will never happen.

Certainly Minister Barnett’s Ministerial Statement contains nothing like the above plan.

No one is campaigning in Tasmania for private forest growers and a fully commercial profitable forest industry!

Tasmania does a good job running a successful dairy industry; and a pretty good job running beef, vegetable, apple, cherry and wine industries. So what is it about the forest industry?

When will Tasmania get a fully commercial profitable forest industry?

A Major Tonewood Milestone from Taylor Guitars

taylorblackwoodbaritones

The latest Wood & Steel (86) magazine from Taylor Guitars has a few interesting articles relevant to the blackwood market.

https://www.taylorguitars.com/wood-and-steel

The first is Bob Taylor’s column Bobspeak, which outlines a major milestone in the tonewood market. Taylor Guitars are now promoting guitars made using deliberately grown, not “native” wood.

This year we will make thousands of guitars using wood that was planted by man rather than having grown naturally in a forest. As a player you won’t be able to easily target these guitars to either avoid them or to embrace them because they’re completely legitimate and blend in with the choices of other guitars made from traditional forest wood. There’s not enough of this kind of wood to make all the guitars from it yet, but this is a huge breakthrough and signals a way forward. We are now starting our own tree-planting projects.

A huge breakthrough is absolutely on the mark!

Congratulations to Bob Taylor and the team!!

I’m looking forward to the day when I read an article in Wood & Steel about a tonewood grower. Perhaps it will be an article about a Tasmanian blackwood grower.

I hope you’re willing to hear a wood report from me often, nearly every time I write, because it’s become one of the most important aspects of my contribution to the world of guitars.

  • Bob Taylor, President

 

I think Bob Taylor is well on the way to having a significant wood supply and marketing advantage over his competitors.

 

The second article of note is the promotion of new Limited Edition baritone guitars on page 22 featuring mahogany tops and Tasmanian blackwood back and sides (see illustration above) as part of the 300 Series.

“A hardwood top like mahogany is really good, he says. “Blackwood is also a good fit — it’s responsive and keeps everything warm, yet has a clear focus to it. Together, the two woods are well suited for a baritone [guitar].”

https://www.taylorguitars.com/guitars/acoustic/326e-baritone-6-ltd

https://www.taylorguitars.com/guitars/acoustic/326e-baritone-8-ltd

 

The third article is a feature on bluegrass player Trey Hensley (p. 24). His latest CD collaboration with Dobro player Rob Ickes The Country Blues features a Taylor 510e Tasmanian blackwood guitar on every track.

“I’d never heard of blackwood,” he says. “It’s like mahogany on steroids!”

http://treyhensley.com/

http://www.robandtrey.com/albums/the-country-blues/

“I brought a bunch of guitars into the studio — rosewood, mahogany — but that one [Taylor 510e] really cut through the mix better than all the rest. I used it on the whole thing.”

The Taylor 510e was a 2014 Fall Limited Edition dreadnought model.

https://www.taylorguitars.com/guitars/acoustic/510e-fltd

https://blackwoodgrowers.com.au/2014/10/03/the-fall-limited-sweepstakes/

It is great to have such positive support for Tasmanian blackwood from Taylor Guitars, and their supplier Robert Mac Millan at Tasmanian Tonewoods.

http://tasmaniantonewoods.com/

Happy reading!

New Zealand Blackwood Market Report

The latest edition of New Zealand Tree Grower Vol 37(4) has a market report from blackwood grower Malcolm Mackenzie.

http://www.nzffa.org.nz/

It makes for positive reading given the NZ blackwood market is still in its infancy.

As a farmer Malcolm has made a significant investment in farm forestry including 30 ha of plantation blackwood now 30 years old and reaching commercial maturity.

You can read Malcolm’s previous articles about blackwood milling and collective marketing here:

https://blackwoodgrowers.com.au/2013/11/29/recent-new-zealand-blackwood-articles/

And watch a video about Malcolm the tree grower here:

As the report shows, with less than three years data, both the volume and the value of blackwood being sold by Malcolm is increasing.

As the NZ market gains confidence in the quality and quantity of the home grown product things will only improve.

New Zealand farm-grown blackwood is a great product. I’m looking forward to the day it will be available for sale here in Australia.

Mackenzie2016.jpg

Building a Sustainable Guitar

pw_le81ce

http://www.wri.org/building-sustainable-guitar

Here’s an interesting series of articles about tonewoods on the World Resources Institute website. It’s a series of six articles looking at the 6 traditional tonewoods used in making acoustic guitars.

The last in the series featuring mahogany is still in production.

Here’s a comment from the lead author after I questioned them about the focus on traditional tonewoods.

the important contribution of this blog series is that it first informs consumers about the environmental and social impacts of their guitars, and second updates them on progress being made with traditional woods. It is ultimately up to the consumer to make the choice, and we have found that simply writing off an entire tradition as unsustainable is an ineffective way of creating lasting change.

I still think that a seventh blog focusing on alternative species (like Tasmanian blackwood), materials and technologies would have been useful. At the moment these articles seem to reinforce the impression that great guitars can only be made from these six woods, which is clearly wrong.

Happy reading!

Special Timbers Subsidised Charade Continues

bedroom_suite2

Forestry Tasmania, the State government forest agency tasked with commercially managing the public native forests of Tasmania, has released its Annual Report for 2016. Forestry Tasmania is Australia’s largest grower and producer of Tasmanian blackwood timber.

http://www.forestrytas.com.au/news/2016/10/forestry-tasmania-s-annual-report-2015-16

A previous blog has focused on the insolvency of the organisation and its dismal future.

https://blackwoodgrowers.com.au/2016/10/31/forestry-tasmanias-insolvency-report/

Here I limit my comments specifically to blackwood and other so called special timbers. These are mostly reported on pages 25-26 of the Annual Report.

Since 1991 Forestry Tasmania has had a commitment to supply 10,000 cubic metres per year of millable blackwood sawlog (Category 4 and Utility) to market.

Forestry Tasmania also calculates a blackwood (millable) sawlog sustainable yield which it must abide by. Forestry Tasmania only calculates 2 sustainable yields: one for eucalypt sawlog and one for blackwood sawlog. The blackwood sawlog sustainable yield is 3,000 cubic metres per year.

http://cdn.forestrytasmania.com.au/uploads/File/pdf/pdf2014/review_sustainable_blackwood_supply_2013.pdf

Once again Forestry Tasmania refuses to tell us how much millable blackwood sawlog it produced during the year. Once again all we are told is total special timbers production that includes outspec and craftwood. We are told that 8,007 cubic metres of millable special timbers sawlog was produced.

Once again the report refuses to tell us what prices blackwood and other special timbers achieved. The Government has already admitted that Forestry Tasmania’s prices are ridiculously low give-away prices!!

http://www.premier.tas.gov.au/releases/ministerial_statement_-_forestry

Once again the report refuses to reconcile blackwood sawlog production with the sustainable yield. The overcutting of the public native forest blackwood resource continues unabated.

Once again the special timbers report on pages 25-26 refuses to openly and honestly tell us that special timbers production is managed as a non-profit, non-commercial, taxpayer funded activity. Is Forestry Tasmania being deliberately deceitful?

Once again the long suffering Tasmanian taxpayer has been forced to subsidise the special timbers industry directly to the tune of $0.91 million (p. 70).

That equates to a direct subsidy of $86.27 for every cubic metre of our highest quality, most valuable sawlog, veneer log and old stump and lump of craftwood that was harvested during the year.

Every $10,000 dining suite, every $8,000 bedroom suite on the showroom floor includes a few hundred dollars of taxpayer subsidy. It really is an outrage and a terrible waste of public money that should be spent on our schools and hospitals.

If anyone in the blackwood industry or the Tasmanian community believes this charade equates to open, honest, transparent reporting by our public forest manager they should think again.

When will Tasmania get a fully commercial profitable forest industry?

Blackwood Timber Price List Summary 2016

It’s a year since I started down the road looking at sawn timber retail prices in Australia.

Part of the reason is the lack of publically available market-based stumpage prices for blackwood.

What I have found is blackwood timber pricing that is all over the place.

Here’s a summary of the four timber price lists I have found so far.

BPL1

https://blackwoodgrowers.com.au/2015/10/19/blackwood-pricing-and-the-forest-industry-1/

Here we have Select grade blackwood selling for the same price as Radiata pine at Bunnings Hardware, and with no price premium for larger dimension timber.

I hate to think what the grower of this blackwood got paid for their logs!

Blackwood doesn’t have a future at these prices.

abpl0916

https://blackwoodgrowers.com.au/2015/10/26/blackwood-pricing-and-the-forest-industry-2/

https://blackwoodgrowers.com.au/2016/09/12/blackwood-timber-price-rises-by-15/

This price list looks much better. It even has a modest 5.8% price premium for sizes above 25mm. And with the recent 15% price increase we are beginning to rival global premium timber prices.

If this was the standard retail price for Select grade blackwood we might get some investor interest.

BPL3KD

https://blackwoodgrowers.com.au/2015/11/09/price-list-from-hell-revised/

This price list seems very confused. It offers a price premium for both small and large dimension timber (width), but this premium decreases with increasing timber thickness!?

A huge ranges of sizes are offered, in two length classes.

However these prices equate to Select Grade Tas Oak prices at Bunning. These prices are not those for a premium timber species.

Yet another road to blackwood ruin.

HydrowoodBWD

https://blackwoodgrowers.com.au/2016/08/03/hydrowood-blackwood-prices-at-uptons/

And finally we have retail prices for Hydrowood blackwood, which are much cheaper than Tas Oak at Bunnings.

Bargain basement salvage blackwood timber designed to destroy the blackwood industry.

In summary we have kiln dried select grade blackwood timber available from $2,500 to over $8,500 per cubic metre, with most price lists setting no price premium for larger dimension timber. In one case there is a negative premium for large dimension timber!

It’s complete market chaos!

With so much taxpayer-subsidised blackwood in the marketplace it’s impossible to know what the real market price for blackwood timber is.

It is certainly not a growers market, and if growers can’t make any money then blackwood doesn’t have much of a future.

The only basis for a successful forest industry is profitable tree growing.

This is what happens when Government and industry policy dictates that the forest industry must be a community service and not a business.

Forestry Tasmania’s insolvency report

FTAR2016.jpg

FT is never going to make a profit. It sells its products too cheaply and is locked into too many loss making contracts. It even makes losses from supplying high quality sawlogs.

With brutally honest statements like that finance commentator John Lawrence carves up the latest Annual Report from Forestry Tasmania (FT), Australia’s largest grower and supplier of blackwood timber.

http://tasfintalk.blogspot.com.au/2016/10/forestry-tasmanias-insolvency-report.html

On top of that sawmillers are now threatening to close if they have to take on more of FTs costs or pay higher log prices.

Checkmate!!

http://www.abc.net.au/news/2016-10-27/sawmill-viability-doubts-under-forestry-tasmania-price-rises/7969776

You can get your own copy of the Annual Report here:

http://www.forestrytas.com.au/news/2016/10/forestry-tasmania-s-annual-report-2015-16

Forestry Tasmania is an absolute mess but after decades of poor policy and politics it is certainly no surprise.

Here’s another gem:

The past year is best described as a continuation of the de facto wind-up of FT commenced under the watchful eye of Treasury boss Tony Ferrall once he was appointed [to the FT Board] in May 2015. A complying Board is now in place, stacked with directors whose post nominals as long as your arm indicate academic forestry knowledge. Their insolvency experience however looks a little thin. That is the prime challenge facing the company. FT is not turning the corner. That’s yet to be found. There is no plan to build the forest industry. It’s an insolvency operation. Presumably Mr Ferrall is acting on instructions from Mr Gutwein, which makes the government a two faced outfit.

If you have any interest or “skin” in the blackwood industry as a sawmiller, logger, manufacturer, retailer or consumer you need to read Mr Lawrence’s analysis.

Is the blackwood industry going to go down with the sinking ship called FT, or will it turn to Tasmanian farmers to grow blackwood?

When will Tasmania get a fully commercial profitable forest industry?