Category Archives: Commentary

New Zealand Tree Growers Enjoying Good Times

Pine

New Zealand has one of the world’s most successful forest industries.

And right now they are riding the tide of strong demand and high prices.

New Zealand farmers will be raking in the money.

http://www.laurieforestry.co.nz/Monthly-Newsletter

Forest owners are enjoying the most sustained, stable and highest prices for logs ever recorded.

http://www.nzffa.org.nz/market-report/

http://www.scoop.co.nz/stories/BU1711/S00809/nz-structural-log-prices-rise-to-24-year-high.htm

It’s mostly about China and export markets.

Log export markets are absolutely vital to the New Zealand forest industry.

Why?

Because the New Zealand forest industry is ALL about profitable private tree growers. Local New Zealand sawmillers have to survive in a very competitive market. This keeps them focused, efficient and hardworking. That’s business!

And for that the forest industry makes a huge contribution to the New Zealand economy.

Why can’t Tasmania have a forest industry like New Zealand?

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Death Certificate

Logging

Anyone reading these two recent articles by finance commentator John Lawrence would wonder if there is anyone in Tasmanian politics or public forest administration with any intelligence or integrity.

What an extraordinary tale of corruption, incompetence and waste.

Forestry Tasmania’s demise in detail

And

Forestry Tasmania’s final report

“total government (cash) assistance to the (Tasmanian) forestry industry (including Forestry Tasmania) is $1.4 billion over the past 20 years”!!!

Let me type that again:

$1.4 billion over the past 20 years!!!!

That is an average $70 million per year in cash subsidies for 20 years to the Tasmanian forest industry.

WHAT AN INCREDIBLE WASTE!

John Lawrence has been analysing and reporting on the economics of public forest administration in Tasmania since 2009. He knows the details better than anyone.

http://tasfintalk.blogspot.com.au/search/label/Forestry%20Tasmania

Anyone who has a business dependent on Tasmanian timbers from public forests is on short notice.

Your days are numbered!

These two documents should be the Death Certificate of the public native forest industry in Tasmania.

As a forester I find it very difficult.

Standing Tall?

Farmer

What can you say about Tasmania farmers trying to grow trees for profit in what must be one of the most hostile marketplaces in the world for growing trees.

Why hostile? Tasmania is equivalent to the forest industry Middle East – a political/commercial/social war zone for the past 35 years with no peace in sight.

Are they deluded? Are they brave? Are they profitable?

They are certainly dedicated and passionate.

These farmers need to be wearing full body armour.

The ABC rural program Landline recently did a segment of farm forestry in Tasmania.

http://www.abc.net.au/news/2017-11-04/standing-tall:-tasmanias-forestry-future/9119218

As demand for timber outstrips local supply, the CSIRO is encouraging Tasmanian farmers and private landowners to join the agroforestry sector.

Even that one promotion sentence by the ABC is enough to make me despair.

Here’s a news story the ABC did about the Landline feature:

http://www.abc.net.au/news/2017-11-05/tasmania-farmers-sow-agroforestry-seeds-as-demand-for-wood-rises/9109216

It’s not a story I find very encouraging. In fact if I was a farmer reading this I’d be having a quiet laugh over my coffee.

As a forester I’ve been reading stories like these for the past 40 years whilst watching the forest industry march to oblivion. It’s the same old story, which hasn’t changed in 40 years. Obviously the story doesn’t work. Why?

One of the problems for these farmers is that they have no power in the political, social or commercial marketplace. They have no voice. No one represents their interests.

Notionally the Tasmanian Farmers and Graziers Association (TFGA) is supposed to represent the interests of farm forestry, but they do nothing. Why? Because doing something means standing up to the politicians and a sycophantic industry.

The TFGA can’t even create a farm forestry vision for the future. Not a single policy.

http://www.tfga.com.au/

So farmers like Graham and Roger are in No Man’s Land, caught between warring parties.

The ONLY basis for a successful forest industry is profitable tree growers, with minimal political and community conflict.

Tasmania is a very long way from that objective.

Tasmanian Rainforest Plunder

Rainforest2

As was inevitable the Tasmanian Government has now enacted the Tasmanian Special Species Management Plan October 2017.

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

It is a sad day for Tasmania.

With no transparency, accountability or oversight this Plan is guaranteed to become yet another Tasmanian forest industry disaster.

Why does Tasmania do it?

Tasmania is giving away its ancient rainforests.

Yes and blackwood too. That’s right! Free blackwood timber for the taking.

All you need to do is fill in the form, and grab your chainsaw and truck and help yourself.

4255 submissions were received in the public consultation process of the Plan of which 99.9% were explicitly opposed to rainforest and oldgrowth logging. But the Tasmanian Government holds the community in complete contempt and has enacted the Plan regardless.

It is now inevitable that the forestry wars will resume in earnest, with people calling for a market boycott.

I certainly support the call for a consumer boycott of Tasmanian timbers.

It is now well and truly time to shut down public native forestry in Tasmania. After 35 years of political and community conflict and $billions of dollars of taxpayers money wasted on a moribund industry it is time to stop this once and for all.

With a State election coming up in 2018 it will be interesting to see what position the Tasmanian Labor Party will take on this issue.

No matter what it is going to be yet another ugly bitter election campaign.

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?

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.