It’s time for another blackwood timber market price review, this time courtesy of Hydrowood and Uptons.
http://hydrowood.com.au/news/hydrowood-now-available-at-uptons/
http://uptons.net.au/
My previous price list reviews have generally not named the suppliers, but in this instance I think I need too since Hydrowood is likely to be the major supplier of premium grade blackwood timber for the next 5 to 10+ years. Hydrowood will therefore set the price ceiling for quite some time.
Go here to read my reviews of other blackwood (and other species) timber price lists:
https://blackwoodgrowers.com.au/category/price-lists/
Here are the current prices are for Hydrowood blackwood from Uptons:
These prices are for rough-sawn, kiln-dried blackwood timber.
It’s a curious price list for a number of reasons.
Firstly there are only two grades of Hydrowood blackwood – fiddleback and everything else! The price for select (clear) grade is the same as for natural (knotty& defective)!!
The other curious feature (and I’ve discussed this in relation to other timber price lists) is the lack of price increase (per cubic metre) with increasing piece size. Whilst you can cut large trees into small pieces of wood the reverse is not true. You can only cut large dimension timber from bigger, older trees. And bigger, older trees cost more time and money to grow. Therefore larger dimension timber should attract a higher per cubic metre price to reflect the higher cost to the grower.
Of course there isn’t a “grower” in this case, but given that the owner of this resource (the Tasmanian Government) isn’t charging any royalties, and Hydrowood are a dominant supplier in the blackwood market, this creates significant pricing distortions in the marketplace.
But there’s the thing. These prices bear no relationship to the cost of growing the wood. This is salvage timber from the bottom of hydro lakes. No forest management costs, no roading costs, no expensive forest practices plans, no royalties paid to the Government!
This is low cost blackwood.
In that regard it shares much with Forestry Tasmania the other major producer of blackwood. Forestry Tasmania produces blackwood at below cost and receives a direct taxpayer subsidy for doing so.
If we want to encourage and develop a profitable sustainable forest industry then this isn’t the way to do it!
This blackwood is even cheaper than Select grade Tas Oak at Bunnings!!
https://blackwoodgrowers.com.au/2016/07/01/bunnings-timber-price-lists/
The other interesting feature of the Hydrowood price list is that there are only three pricing structures for all of their species/products, of which two are shown in the above chart.
The Natural/Select Blackwood pricing is shared with plain Myrtle, or what Hydrowood calls Western Beech (Nothofagus cunninghamii), and Tas Oak (Eucalyptus sp.)!! The fiddleback blackwood pricing structure is shared with Black Heart Sassafras (Atherosperma moschatum), Huon pine (Lagarostrobos franklinii), Marine-grade Celery Top Pine (Phyllocladus aspleniifolius), and flame-grain Myrtle/Western Beech. An intermediate pricing of $5,900 per cubic metre is applied to all Knotty Celery Top pine and plain coloured Sassafras.
Of course the impact of these pricing structures on the future of the other (non-blackwood) species is irrelevant. These other slow-growing species do not provide any investment opportunities. But farmers can invest in growing commercial blackwood provided that markets are working properly, and Government and industry policy is supportive.
No chance of that here in Tasmania.
This is the fourth blackwood timber price list I have reviewed and what these price lists show is a blackwood marketplace in disarray. Blackwood prices are all over the place, from cheaper than radiata pine, to prices that rival the most expensive premium timbers in the world!
If you were wondering whether to invest in growing commercial blackwood then this marketplace would not provide you with any confidence. I wish I could say that these prices clearly demonstrate the viability of growing commercial blackwood but I can’t.
These blackwood timber price lists do not reflect the cost of growing the wood. Nor do they reflect an industry that has a vision for its future. Instead they remind me more of a closing down sale!
They reflect an industry that has lost hope, and is now in a desperate race to the bottom.
Without a solid commercial foundation the forest industry doesn’t have a future.
So now you know where to get your cheap premium blackwood timber.
When will Tasmania get a fully commercial profitable forest industry?
Private Forests Tasmania
A dedicated Government agency fostering the private forestry sector seems like a great idea at face value.
Private Forests Tasmania (PFT) is the only government-funded authority established in Australia to specifically promote, foster and assist the private forestry sector on forestry matters. We provide strategic and policy advice to Government on private forestry issues and represent Tasmanian private forest owners’ interests nationally.
http://www.pft.tas.gov.au/
But as soon as you start thinking about it the idea doesn’t look so good, especially when the Government is itself a major player in the industry in terms of wood production, market domination and control, and industry policy.
What happens when Government policy is in direct conflict with the interests of private forest growers as it often is? PFT cannot come out and oppose Government policy. They are Government employees after all.
And as for providing policy advice to Government that must present quite a challenge within a policy vacuum. The PFT website has no policies so what it says to Government remains a complete mystery.
Where’s the policy for the Radiata industry?
Where’s the policy for the pulpwood industry?
And where’s the policy for the high-value appearance grade timbers industry, including blackwood?
And where are the policies around the changes that are needed to the Forest Practice Code around plantation establishment and management?
And how about some policies about greater competition, price and market transparency?
I could go on….
And what about a PFT business plan?
You know a plan with goals and objectives and performance benchmarks and criteria, and a regular review process.
At least they have Vision and Mission statements.
But that seems to be about as far as it goes.
Our Vision
Sustainable private forestry in Tasmania as an integral and crucial part of our social fabric, economic well-being and a healthy environment in which soil, water and biodiversity are valued and widely used.
Our Mission
To facilitate the sustainable management of native and plantation forestry on private land in Tasmania. This mission includes:
That mission statement should be clearly divided into a Commercial Wood Production and Other sections.
Regular community forums wouldn’t be a bad idea either.
And a plan of action for implementing the 2005 National Action Statement on Farm Forestry wouldn’t hurt either.
https://blackwoodgrowers.com.au/2016/02/25/two-significant-forest-industry-reports-that-went-nowhere/
Don’t get me wrong. PFT could be a really great organisation but it remains fundamentally conflicted whilst the Government dominates the forest industry.
The objectives of the Government as a grower, price manipulator and policy maker, are not the same as those of private forest growers.
The only basis for a successful forest industry is profitable tree growers. The PFT website doesn’t seem to mention them.
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Posted in Commentary, Politics
Tagged Private Forests Tasmania