In the early 1990s the New Zealand Government made the fateful decision to hand the forest industry over to the private sector.
It was a brave and visionary decision.
Before then the New Zealand forest industry was a Government run community service that included plundering public native forests and running a massive pine plantation employment program.
Public native forestry was shut down and the pine plantation resource was sold to the private sector.
The forest industry was mortified! Apoplectic!
Twenty five (25) years later and NZ has one of the most successful forest industries in the world, based on profitable private tree growers. Can anyone challenge this assessment?
Forestry was third in the list of exports by value in 2016 in New Zealand (after dairy and meat; with no Government subsidies):
Once the pine plantation resource was privatised then pine log prices became realistic and meaningful and the NZ Ministry of Primary Industries began recording pine log price data.
So here we have twenty five (25) years of export pine log price data.
What an astonishing achievement!
Well done New Zealand!!
I’ve converted the data into a chart and added some second order polynomial trend lines.
Before June 2017 the data is numerical average price. Post June 2017 the prices are weighted average which should mean more realistic and stable data.
The obvious trends are a major spike in 1994 due to the Northern Spotted Owl crisis in North America (1) followed by a gradual price decline until the GFC in 2007/08. Following the Global Financial Crisis export pine log prices have seen a steady 10-year price improvement, to the advantage of NZ pine growers.
The other interesting trend in the chart is the convergence over the last 10 years of the A Grade, K Grade and Pulp log prices. Pruned pine log prices have continued show a significant price differential.
Oh how I wish we had meaningful long term blackwood log price data.
No chance! Not in Tasmania!
Good luck to New Zealand pine growers!!