Category Archives: Commentary

The Radical Sawmill #2

NCFS

Some further thoughts on The Radical Sawmill and the Doyle Log Scaling Factor.

https://blackwoodgrowers.com.au/2017/09/04/the-radical-sawmill/

The American system of trading logs based on the Doyle Scaling factor means that every sale begins with the premise

this log is a liability, the grower must be penalised”,

instead of

this log is an opportunity, the grower must be encouraged to grow more quality logs”.

BF_CUMratio

You would think under these negative conditions any serious forest grower would set up their own sawmill and do their own milling.

Why would a forest grower sell logs into such a punitive market?

Forest Grower and Sawmilling Cooperatives should be the order of the day in the USA.

For a forest industry looking to build its future the Doyle Log Scale is a very bad idea. It does nothing but send a negative message to the market.

Not that the forest products market in Australia is any better. We have our own unique set of punitive measures to discourage private tree growers. But at least we do trade logs based on the small end or mid diameters. Or even a total log volume estimate based on SED and LED. The log is traded as an opportunity not a liability.

 

The Sunrise Sawmill in Ashville, North Carolina is obviously a small business, with limited resources for marketing and promotion.

How much is it really thinking about the future of the forest industry in North Carolina?

The State of North Carolina encourages private forest owners to develop a “Woodland Management Plan”.

http://ncforestservice.gov/Managing_your_forest/why_do_i_need_a_plan.htm

One of the objectives of these Plans is to improve the productivity and commercial value of the private forest through active management.

If I was a sawmiller thinking beyond my own needs to the future of the broader industry:

  1. I’d stop penalising the grower by using the Doyle Log Scaling Factor, and pay for the small end diameter total log volume. Consider each log an opportunity not a liability.
  2. I’d be offering a log price premium (10-15%) to private forest owners who had a Woodland Management Plan in place.
  3. I would also consider supporting and encouraging the development of forest grower cooperatives as a way of building the industry.
  4. I’d be looking to establish good long term relationships with the better forest growers. This means I would have more confidence in the quality of the logs from those growers and be able to offer them a better price. That’s a win-win situation.

In fact the more I think about this the more I realise that whilst the sawlog may be important for the sawmiller for today, this week or this month; what is ultimately more important is the forest grower. How important is this forest grower to the sawmiller and the broader industry? That is the ultimate question for the sawmiller!

Greater log price transparency is a great beginning to help build the forest industry, but I suspect that much more is needed from the forest industry. The New Zealand experience supports this view. A broad level of industry/market support and encouragement is needed for landowners/forest owners to consider investing time and money over such a long period to grow quality wood.

As for North Carolina, North Carolina is home to 18.6 million acres (7.5 million ha) of forestland, 85% (6.4 million ha) of which is privately owned.  Approximately 64% of these privately held lands are owned by non-industrial landowners.  Despite the enormous growth our state has witnessed, 60% of North Carolina is still covered by forests.

https://www.ncforestry.org/nc-forest-data/forest-products-industry-in-north-carolina/

I wonder how many of these NC private forest owners have Woodland Management Plans?

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The Radical Sawmill

Sunrise

Sawlogs take a long time to grow! Decades long!!

So if you are a sawmiller looking to secure your resource/business beyond next week or next year, you need to be aggressive in the market place.

Selling sawn timber is fine but if there are no sawlogs coming in, then its game over.

Under the unique resource conditions of the forest industry it could be argued that for a sawmiller, buying sawlogs is actually more important than selling timber!

So here is one sawmiller from Ashville, North Carolina, USA who is very aggressive and up front about securing their future.

http://sunrisesawmill.com/

This sawmill provides a current table of prices they are prepared to pay forest growers for logs delivered to their mill, by species and log grade.

I have never seen a sawmiller in Australia who actively seeks to buy sawlogs in the open market like this.

This is one Radical Sawmiller!

http://sunrisesawmill.com/log-prices/

Converting these prices into something that Australian/New Zealand readers can understand is problematic because:

  • Americans trade logs using board feet (12” x 1” x 1”) as a volume measure; and
  • They confuse the log pricing issue even more by then applying a sawn recovery scaling factor so that the board foot volume changes depending upon the small end diameter of the log. Sunrise use the Doyle Log scaling factor.

The use of a log scaling factor makes the job of the forest grower even more difficult than it already is!

The job of the forest grower should be to grow quality and size/volume. It should be the responsibility of the log buyer to then recover the best value from the logs via markets and/or technology.

The Doyle Log scaling factor uses the log small end diameter (under bark) and log length. There is no allowance for log taper.

So I took the Doyle Table provided by Sunrise Sawmills and did a bit of maths to produce the following chart. As a straight forward conversion there are 424 board feet (BF) in a cubic metre (CUM). With the Doyle Log Scaling factor the number of board feet per cubic metre in a log increases as the diameter increases as the chart shows. This is to account for the fact that sawn recovery increases as log diameter increases. So in the USA log buyers only buy based on a notional “recovery”. The grower pays for wastage. In Australia and New Zealand logs are traded based on total log volume, with the buyers then responsible for maximising the value from the log.

I also did some calculations to see what effect a 2% log taper would have. Obvious it means that the grower is paying for even more waste (less recovery).

BF_CUMratio

On the positive side you could say that using the Doyle Scaling factor encourages/rewards growers for growing bigger trees, with larger logs getting three times the price of smaller logs.

But my feeling is that using this method for trading logs just confuses the issues.

With this chart in mind it is interesting to note the price difference at Sunrise between the veneer vs the prime sawlog. With veneer logs it is possible to get over 95% recovery. So in terms of volume recovered, the veneer and prime sawlogs are essentially the same price! But appearance grade veneer sells for much more by volume than sawn timber. These prices don’t quite add up.

These guys even have their own Facebook page:

https://www.facebook.com/Sunrise-Sawmill-193257651998/

It is good to see a sawmiller who understands the importance of aggressive transparent marketing in buying sawlogs and securing their future.

The question remains outstanding; does this aggressive marketing and log prices translate into a prosperous community of forest growers in North Carolina?

For Australian readers it needs to be understood that the eastern USA forest industry is entirely dominated by private forest owners. There is no logging of public native forest in the eastern USA. No subsidised sawlogs. If you are a sawmiller in the eastern USA you need to be low cost, efficient and aggressive in the marketplace. It’s all business; no politics! Just like in New Zealand there is no such thing as “resource security” in the forest industry in the USA. Such a concept doesn’t exist!

Oh how I wish this would happen in Australia.

The only basis for a successful forest industry is profitable tree growing (and radical sawmillers).

PS. A target blackwood plantation sawlog (60cm dbh pruned 6m) has approx 360 board feet by the Doyle Scaling factor. At $US1,000 per 1000 MF (Sunrise price for Black Walnut) that equates to $US360 per log. At the current exchange rate of $AU0.80 to $US1.00 that equates to $AU450 per log mill door. In my books that is a pretty acceptable price…….for a premium sawlog. For a premium veneer log I’d be expecting much, much more.

Guitar Makers Challenged by New Rosewood Restrictions—and What This Means for Players

rosewood2

This article appeared in the August 2017 issue of Acoustic Guitar magazine. It makes for interesting reading.

http://acousticguitar.com/guitar-makers-challenged-by-new-rosewood-restrictions-and-what-it-means-for-players/

It doesn’t provide much in the way of new information, but gives insight into the challenges the guitar industry is facing in a rapidly changing tonewood market, and the different responses.

So will the price of rosewood tonewood increase as a result of the new CITES restrictions?

Of course it will!

As supplies of illegal rosewood become restricted the demand for Indian rosewood will increase. Indian rosewood supply will not increase in the short term so price must go up. The basic laws of economics.

Guitar makers are caught between a guitar-buying public that is resistant to alternative species and a shrinking supply of traditional tonewoods.

But anyone who goes to any guitar maker’s website will see plenty of images and products made from rare and exotic tonewoods. Try and find the word “sustainable” on these websites!

The guitar industry does not seem to be terribly serious about the problem.

Bedell Guitars are one of the few standout examples of a company that is trying hard to build a sustainable tonewood future and pushing the market in that direction. Their website is pretty good.

http://bedellguitars.com/

Bedell still believe that logging rainforest and oldgrowth is sustainable and where their future is; unlike Taylor Guitars who are making the move towards plantation tonewoods.

When it comes to alternatives [tonewoods], there’s much more likelihood of supply chains being erratic in terms of quality and supply.”

Given that most of the world’s forests have been systematically plundered this is not surprising.

The guitar industry needs to start from scratch and help replant and grow new tonewood resources. Taylor Guitars are doing this. It’s time for the rest of the industry to get on board.

Tasmanian farmers are waiting to hear from the tonewood market.

Tasmanian blackwood – the [potentially] sustainable tonewood.

Has one act changed our course forever?

KL

Kevin Lyons (Tasmanian deputy premier 1969 – 1972)

http://www.themercury.com.au/news/tasmania/has-one-act-changed-our-course-forever/news-story/d1b6601e86aafbed4f06f20233e3c10f

This excellent short article in last Saturdays Mercury (5/8/2017) newspaper provides interesting background to how first the Hydro and then the forest industry became willing participants in the environmental wars that have dominated Tasmanian politics for the past 45 years.

The alleged bribing of a State MP and the bringing down of an elected Government provided the spark that went on to become first the dam wars (1970-1983) and then the forestry wars/crisis (1983-present).

The arrival of a party (the United Tasmania Group that went on to become the Greens) focused on the environment was a double-edged sword. It delivered victories for the natural world, and attracted support from disaffected Labor and Liberal voters.

However, without a mandate to govern, the presence of the Greens has helped marginalise the environment as a party-political issue rather than as a matter that should be front and centre of all human endeavour.

Anti-Green sentiment is now a factor in the voting patterns of a cohort of Tasmanians large enough to deliver power to whichever major party is prepared to harvest the negativity.

It is a vicious cycle. Divisions in our community are amplified by major parties competing for the anti-Green vote. Governing parties incite this conflict to maintain power. We have seen it all the way through from premiers such as Reece to Robin Gray and Paul Lennon, with overt displays of aggression and ridicule to green ideas in a bid to firm their voter base.

The forest industry is not mentioned specifically but any Tasmanian knows immediately what the author is talking about. Up until 2011 the forest industry was a more-than-willing participant in these high-stakes political games.

But the only winners in political games are the politicians. Everyone else loses!

And so many Tasmanians still believe the political rhetoric as if it was gospel. Finger pointing has become a Tasmanian obsession.

A vicious and destructive cycle indeed!

Recommended reading.

Special Timbers Welfare State

TSSMP

A mere 7 years after the last special species management plan was produced by Forestry Tasmania in 2010 comes another attempt at failed forest policy in Tasmania.

http://www.stategrowth.tas.gov.au/forestry/special_species_timber_management_plan

This new Plan will open up 420,000 ha of pristine public native rainforest and oldgrowth for taxpayer funded plundering by the special timbers industry. This includes 225,000 ha of rainforest and oldgrowth in conservation reserves.

The Plan is essentially a help-yourself DIY approach to public forest management, with an Open Season on the last of Tasmania’s rainforest and oldgrowth.

After the Executive Summary the Plan begins by trying to tell us how important the special timbers industry is; total industry employment, total value, etc.

It’s like the Government telling us that Centrelink is a commercial business not welfare.

The Tasmanian Government believes in Welfare State Forestry, even whilst in competition with private tree growers! So profitability, good commercial management and responsible forest management are out the door.

This draft Plan is not a business plan.

This draft special timbers management plan begins with the premise that Tasmania’s last remaining oldgrowth and rainforests exist to be plundered…….at taxpayers expense……for the exclusive benefit of a handful of local woodworkers!

This draft special timbers management plan does not begin with the premise that Tasmania’s premium timbers should be sold into competitive open markets to help fund schools, roads and hospitals.

Nor does the Plan even consider whether these forests are more valuable left untouched.

In 2010 the special timbers industry was formally admitted into Tasmania’s Welfare State. This new draft management plan now takes that Welfare State to a whole new level of plunder, waste and welfare.

The only basis for a successful forest industry is profitable tree growing.

This Plan represents the exact opposite. It’s a disaster for current and potential private blackwood growers.

The draft Plan is open for submissions until 9am Monday 28 August 2017. Submissions can be sent directly to the Department of State Growth by emailing: specialspecies@stategrowth.tas.gov.au

The Plan will become law once it is signed and gazetted by the Minister.

It can’t be “fixed”!

Trucks

http://www.themercury.com.au/news/opinion/latest-policy-proposals-would-have-done-nothing-to-resolve-issues-in-tasmanias-forestry-industry/news-story/4d90132d87faf0c065a6725126f0334c

This excellent article in today’s Mercury newspaper succinctly captures the pain suffering and the high cost to Tasmania of the failures of the last 35 years.

But I certainly don’t agree with the authors final note that the political system can somehow find a solution to the problem.

The one fundamental lesson of the last 35 years is that Tasmania’s political system cannot solve the forestry crisis.

Whilst we continue to log public native forest there will always be politics, conflict, corruption and waste.

That is the fundamental lesson.

This is true not just in Tasmania, which provides the most extreme case, but in all Australian States where public native forest is logged.

Putting our hopes in the political system again, when all indications are that the forthcoming State election will be a bitter and divisive contest with forestry once more a major issue, is sheer lunacy; a classic example of Einstein’s definition of insanity.

No political party (Liberal, Labor or Greens) has a plan to resolve Tasmania’s forestry crisis.

It is time to stop the endless madness.

It is time for the Tasmanian community to speak.

Insanity …

LogTruck

http://tasmaniantimes.com/index.php?/weblog/article/insanity-1/

Here’s an excellent article by economist Graeme Wells on the failures and incredible waste of past and present Government forest policy in Tasmania. It makes for sober reading.

Unfortunately Tasmania’s political system only exacerbates the problem.

When will Tasmania get a fully commercial, profitable forest industry?