It’s time for my annual summary of Island Specialty Timbers (IST) log tender results.
This is the only competitive market, log price data publically available anywhere in Australia.
I began this series of articles in 2015 hoping to start a discussion in the community about forestry, log markets and prices, and the concept of profitable commercial tree growing.
I wonder if I’m succeeding?
IST had a good tendering year in 2018-19 with both increasing sales and prices.
IST conducted 9 tenders during the year putting a total of 147 cubic metres of special species logs and craftwood to competitive tender, in the only transparent, competitive forest product market in Australia. Hooray for IST!!
The IST tender results for which I have data are shown in the following chart. As I’ve said previously it’s difficult to draw conclusions given the wide range in size and quality of products that IST puts to tender. Perhaps it could be said that maximum log prices seem to have increased over the last 18 months. The same can’t be said for average or minimum prices.
The following chart shows average sold log volume. There is a general trend of diminishing log size at IST that becomes obvious at the annual aggregate level…
This year I’ve created the same charts as above but aggregated on an annual basis.
2018-19 saw 147 cubic metres put to tender. 118 cubic metres were sold for total revenue of $150,860 at an average price of $1,276 per cubic metre. 29 cubic metres of sawlogs and craftwood were unsold at tender.
Standout results for 2018-19 was a 2.48 cubic metre black heart sassafras log that sold for $4,075 per cubic metre and a total price of $10,103 at the January 2019 tender!
The following chart confirms that log sizes are falling at IST, halving in the last 4 years! People are paying higher prices for smaller logs. Is this an indication of sustainability? I think not!
IST put a total of 14.7 cubic metres of blackwood logs to tender in 2018-19 of which 8.2 cubic metres sold. 4.8 cubic metres of the sold blackwood logs contained figured grain, the remaining logs were plain (straight) grain. The following chart shows annual plain grain, blackwood sawlog tender results for which I have data. These are tiny volumes in a small domestic Tasmanian market.
The chart shows a steady increase in average tender price for plain grain blackwood sawlogs over the last three years. The average price in 2018-19 was $727/m3! Also note that good quality plain grain blackwood logs have been selling for over $800/m3 for a the last few years.
At these prices a well managed blackwood plantation is worth over $200,000 (at mill door) per ha after 30 years!
My focus is plain grain (as distinct from feature grain) sawlogs because these are equivalent to what can be grown in a well managed commercial blackwood plantation. The target blackwood plantation sawlog is pruned to over 6m height with a volume of 1.5 cubic metres, and a small end diameter (SED) of 50 – 55 cm depending upon stem taper.
The following chart shows the average volume and small end diameter of plain grain blackwood logs sold by IST at tender. These logs are equivalent in volume and SED to what can be grown in a commercial blackwood plantation.
Standout blackwood results for the year were:
- A massive 3.1 cubic metre figured grain log that sold for $800/m3 for a total price of $2480;
- A 1.5 cubic metre plain grain log that sold for $800/m3 for a total price of $1200. This log measured 5.5m length, 52cm SED 75cm LED. This is equivalent to a target blackwood plantation log.
Given that blackwood comprises 95+% of all special species harvested from public native forest, IST tenders very little blackwood.
Tasmanian blackwood (Acacia melanoxylon) is the only special species product sold by IST for which this market data has any real relevance. Unlike the other species that IST sells, blackwood can be grown commercially in plantations. The Tasmanian Government is doing all it can to discourage landowners from growing commercial blackwood!
IST Price Archive
IST’s price archive table (see below) is out of date, as the above chart indicates.
Good quality plain grain blackwood logs are selling for >$800/m3.
As for short, plain grain logs here’s a chart showing the relationship between price and log length for the last 5+ years. Good luck if you can see any trend in that. I see short plain grain blackwood logs going for very good prices!
Blackwood logs with feature grain (birds-eye, fiddle-back, etc) can range between $200 and $2,900 / m3 depending upon the size of the log and the presence of other defects.
- These tender prices are effectively mill door prices that already include harvesting and transport costs. They are NOT stumpage prices.
- Island Specialty Timbers (IST) is an enterprise of Forestry Tasmania Sustainable Timbers Tasmania established in 1992 to increase the recovery, availability and value of specialty timbers from harvesting activities in State forests.
- Forestry Tasmania Sustainable Timbers Tasmania manages its special timbers operations (including IST) as a taxpayer-funded, non-commercial, non-profit, community service. Each cubic metre of blackwood log harvested by Forestry Tasmania received a taxpayer subsidy of $90! No private blackwood grower received any taxpayer subsidy.
- Note that all logs and wood sold by IST come from the harvesting of public native old-growth forest and rainforest certified under AFS (PEFC).
- It is unlikely that this tiny set of market-based blackwood log prices is representative of the broader blackwood market.
And speaking of prices I must include my story from April about the record Indian Rosewood log price:
Assuming this is a plain grain rosewood log it is an extraordinary price of $AUD14,400 per cubic metre!