Blackwood Markets

Thanks to those blackwood sawmillers who contacted me in response to my recent blog.

https://blackwoodgrowers.com.au/2014/10/27/blackwood-sawmillers/

Here are some of the things I learned from these discussions – some very good, some not so good.

THE GOOD

Firstly there is strong demand for blackwood from export markets.

Local domestic markets remain generally quite.

Blackwood growers wanting to get a good price need to search out those few processors who are accessing these markets.

Prices “on stump” of up to $500 per cubic metre for good quality plain-grain logs are being offered, with exceptional logs going well above this.

Access to these export markets is available from anywhere in the State.

One processor is currently shipping an average one container of logs a day and is looking to increase this dramatically next year. They are accessing markets in 7 different countries!

Will Tasmanian farmers be able to meet this demand?

Strong demand for quality appearance-grade wood and a falling Aussie dollar are helping to drive interest in the blackwood market.

At these prices a blackwood plantation at harvest would be valued at well over $100,000 per hectare! Anyone interested?

Do I have a problem with exporting blackwood logs? Not at all!

Farmers should have the option to access whatever markets they wish for their products. If local processors can’t offer a good price then export it is. As I often remind people, forestry is business. Growing trees for wood production is about profit and good forest/land management.

The absolute foundation of any successful forest industry must be profitable tree growing. Not community service! Not taxpayer subsidises! Not ideology!

THE NOT SO GOOD

But the blackwood marketplace is not functioning anywhere near as well as it could/should.

All of this commercial activity is happening “off the radar”.

Instead of building interest in the farming community, creating much-needed positive sentiment in the forest industry, and building support and interest from the wider Tasmanian community the blackwood marketplace is still pretty invisible.

Why?

Fear and mistrust

With so many processors (at least 21) in the private blackwood business in Tasmania it is a very competitive, and at times cut-throat business. Hence the industry is dominated by fear and mistrust. Because of this fear all business is done quietly by word-of-mouth. No advertising. No promotion. No marketing.

Invisibility

Because of the fear and mistrust within the industry Tasmania remains ignorant of what is happening in the blackwood market. Farmers are generally unaware of the current and future potential of growing and selling commercial blackwood.

A lost opportunity for Tasmania.

The blackwood industry will only grow and prosper if there is greater transparency and integrity.

The market clearly wants quality blackwood timber and is prepared to pay good prices.

No voice

The forest industry in Tasmania is dominated and controlled by a select few sawmillers and processors. Private forest growers essentially have no voice or power/influence in the industry. Any forest industry that is dominated by the processors is doomed to fail. Forestry is fundamentally about making profits by growing trees. If tree growers have no power or voice in the game then no one will grow trees. It’s that simple.

State forest policy and Forestry Tasmania

There was plenty of criticism in the discussions with processors, about State forest policy and Forestry Tasmania. It is a myth that the Tasmanian forest industry is united and speaks with one voice. We generally only hear one voice because the dissenters fear the consequences of speaking out. The forest industry can be a rough trade at times.

These processors who deal with private forest growers know very well the damage that past and current State forest policy and practice is having on the industry.

CONCLUSION

The discussions with blackwood processors gave me a great sense of hope. But there are still plenty of challenges ahead.

The market clearly wants more Tasmanian blackwood.

The industry is currently too crowded and cut-throat. It needs 2-3 processor/operators that are prepared to cut through the mistrust with openness and integrity, and an efficient low-cost business model that delivers what the market wants whilst building trust and good relationships with the farming community.

With so much negative sentiment and bad experiences it will take a lot of work to rebuild trust within the farming community. Keeping “off the radar” is not the way to rebuild trust and interest. Most farmers will respond positively to a professional, honest, transparent approach. But good long-term relationships take time to develop.

Getting farmers to make a 30+ year investment by planting blackwood will require as much positive support and encouragement as possible. We need lots of flag waving and trumpet blowing on a major scale. And plenty of market “pull”.

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2 responses to “Blackwood Markets

  1. So if IST are getting $200/m3 for plain blackwood logs in the IST yard as per Gordon’s recent post, what are the factors that are causing these processors to pay $500/m3 stumpage? Are they bigger logs?

    • Hi David,
      Export markets, whole-log export to seven different countries. That’s the main difference!
      Yes the price is “up to” $500 per cubic metre. The $500 logs are very good logs, bigger than those in the parcel sold by IST. The exporter told me that for logs over 80cm diameter he can name his price and the customers are very happy to pay.

      Local sawmillers are going to struggle as the export market grows. Only those sawmillers with very efficient operations and low costs will stand any chance against whole log export markets. But that’s good. Our local guys need a bit more commercial pressure. And not every blackwood grower will want to sell to the highest bidder. Some will support the local sawmillers.
      Gordon.

      PS. The exporter also told me he harvests the blackwood stumps as well if appropriate. He has export markets for blackwood stumps!

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