Monthly Archives: September 2013

Another record price at IST tender

The September tender of special timbers at Island Specialty Timbers achieved yet another record result.  The price wasn’t for a blackwood log (none were offered in the September sale) but the result clearly demonstrates that the market for premium timbers is very strong indeed.

An incredible $5,380 per cubic metre was paid for a high quality tiger-stain myrtle sawlog, the highest unit price ever paid at an IST special timbers tender.

Unfortunately Myrtle (Nothofagus cunninghamii) cannot be domesticated as a commercial crop, so this sales result has no direct commercial importance. It takes at least 200 years for Myrtle to reach commercial size, and the fungal infection that produces the tiger staining has not yet been identified. Those few lucky Tasmanian farmers who have existing Myrtle on their properties now have a better appreciation of what they may have growing. Other farmers may have areas suitable for growing a few Myrtles as a hobby or special interest (eg. river reserve or steep south-facing slope).

But if farmers want to grow these high-value premium timbers as a profitable commercial crop then blackwood is the clear and obvious answer. That is the clear indirect message from these latest tender results from IST. The premium timber market is beginning to shout at farmers and landowners – please grow high quality timber. Are any farmers listening?

Record price achieved for premium blackwood sawlog at IST tender

The August tender of special timbers at Island Specialty Timbers achieved a record price for a blackwood sawlog. Described by IST as possibly the best blackwood log ever offered for tender at IST Geeveston, the log achieved a price of $2750 per cubic metre for a total value of $7,500!!

Here is the description of the log from IST:

A large diameter fresh log with dark wood, tight grain and tear-drop figure affecting its full length.  Probably the best blackwood log offered for tender at IST Geeveston.   Length 4.5 m, butt diameter 93 cm, head diameter 83 cm, volume 2.73 cubic metres, weight about 2000 kg. 

The log had two important attributes that contributed to its premium price: very large size, and tear-drop grain figure. Tear-drop is a relatively rare feature grain.

The other blackwood log sold at the August tender was a standard grade log with plain grain that achieved a good price of $420 per cubic metre. This log was of equivalent size and quality to what would be achieved in plantation grown blackwood. At these prices blackwood plantations are a good investment.

Blackwood plantations produce approximately 300 cubic metres of premium sawlog per hectare, which at $420 per cubic metre equates to approx. $120,000 per hectare at harvest in 35 years!! Is anyone interested?

There is also some evidence that figured grain is under at least partial genetic control which means that tear-drop grained blackwood could potentially be cloned. But this will only happen with private blackwood investment. At $825,000 per hectare in 35 years that seems like a reasonable investment!

The other tender result worth noting was the price paid for a high quality blackheart sassafras log of $5,000 per cubic metre!! Unlike blackwood, sassafras cannot be domesticated as a commercial species. But the result clearly demonstrates the ability of the specialty timbers market to pay very high prices for quality sawlogs.

Clearly the market for premium appearance grade timber is very much alive and in good health.

Collective marketing of Tasmanian blackwood?

Collective marketing - Tree Grower 34-3

This is an interesting article from the latest New Zealand Tree Grower journal from the New Zealand Farm Forestry Association, and potentially represents a significant milestone in the fledgling NZ blackwood industry.

Alan Laurie runs Laurie Forestry Ltd a progressive and commercially focused forest management, harvesting and marketing business. I always enjoy reading Alan’s regular forestry market reports that always me to know much more about what is happening with the NZ forest industry than I know about the industry here in Australia.

For Alan to make these comments about the potential of New Zealand blackwood is a significant vote of confidence in the industry. While there is a blackwood interest group (AMIGO) established under the NZFFA, they have yet to evolve into a marketing cooperative despite the fact that steady volumes of quality NZ blackwood timber are now coming onto the NZ market. Certainly what needs to happen soon is greater market transparency and feedback, so that prices and return on investment allow more potential blackwood growers to take an interest and help build the industry.

Blackwood appears to be an ideal tree species with which to begin collective marketing. The timber has the obvious market advantage of being in limited supply but appears to be in constant demand. Demand may increase slightly if a constant supply is guaranteed and imports of blackwood timber are very expensive.

To this comment from Alan Laurie I would also add that blackwood also has the advantage of a well established market presence and profile as a premium quality timber, so marketing and sales should be straight forward, compared to many lesser-known species.

So can the NZFFA/AMIGO evolve into a marketing cooperative and help take the NZ blackwood industry to the next level?

I would think given Alan Laurie’s knowledge, experience and place in the industry he could play a pivotal role in making the collective marketing happen.