Category Archives: Cooperatives

Creating a functional wood market in Australia

Farm grown blackwood timber at Ceres Fair Wood, Melbourne. $10,000 per cubic metre. Ceres Fair Wood is one of the few businesses in Australia that cares about the future of quality wood.

The Past/Present

For thousands of years humans have been using wood for all sorts of reasons – to hunt, cook, stay warm, build shelter and wage war. And for all that time we have had natural forests to plunder. Whatever wood we could find we used, mostly with plenty of contempt and waste.

But the days of plundering natural forests are just about over.

One of the problems this history has created is dysfunctional wood markets.

Cheap plentiful wood from natural forests has meant no one has ever taken responsibility for the future. Cutting down and sawing up trees is simple. Getting trees planted and managed for the future is the real challenge.

There are thousands of businesses in Australia that rely on wood (harvesting, transport, milling, retail, manufacture, craft, music, art, etc.), and 99.99% of them take no interest or responsibility in the future supply of wood.

There is no relationship in the market between using and consuming wood and a tree being planted and managed.

Third party certification schemes such as Responsible Wood/PEFC and FSC are not building the forest industry and growing more wood for the future. Their goal is to save and better manage existing natural forests, not to grow more new wood resources.

The fact that the forest industry in Australia has never established any commercial credibility hasn’t helped the situation.

There must be a credible, transparent relationship between the price of wood and the cost of planting, growing and managing trees; and that relationship must encourage and support more tree planting to meet future demand.

My focus here is especially the premium solid wood market.

Until we build proper functioning wood markets in Australia most of these Australian businesses will disappear. Some will switch to imported wood when public native welfare forestry is shut down, but many will close. All for the want of a proper functioning wood market.

The Future

There are plenty of challenges that need to be addressed in order to build proper functioning wood markets but they are not insurmountable.

  1. Possibly the first and greatest challenge is market (and consumer) recognition and responsibility.

Proper functioning wood markets in Australia must be driven by the market and consumers.

Recent comments in the media by furniture makers and builders in Western Australia (in response to the shutting down of public native forestry) do not provide encouragement. Can you believe they would rather import timber from Indonesia than support local farm forestry?

How the thousands of wood-dependent businesses in Australia will come together to coordinate and plan their future is part of this challenge. Most of these businesses are too small to achieve much by themselves. The Australian Furniture Association could take on this role for furniture makers. Builders, cabinet makers and retailers could possibly join the AFA in this.

https://australianfurniture.org.au/

Is the AFA up to the challenge?

2. The second challenge is getting the farming community on board to plant, grow and manage the trees that the market wants.

I personally think this second challenge is by far the easier of the two.

Once farmers see the market change to being responsible and supportive they will quickly get on board.

There will need to be some serious talking and building trust, and careful management of risk.

Unlike the past where the market could pick and choose from a wide variety of natural forest woods, the market must now decide on which species it wishes to promote and support in farm forestry. Species must be fast growing and command sufficient market price to allow farmers to grow them commercially. Given we are talking 30+ years between investment/planting and harvest/revenue/profit, this will require careful consideration, coordination and planning.

The idea that farmers just randomly plant hundreds of different tree species in the hope of finding a buyer in the future just wont work. Farm forestry for the growing of high quality premium solid wood will require coordination and planning, driven by the market.

This is where organisations like the AFA must play a central role.

Final some discussion about markets.

Will there still be demand for premium quality solid wood in 30+ years time?

Certainly over my 40+ year career as a forester I have seen premium quality solid wood go from a being a common cheap product to a scarce expensive product, with all indications leading to its eventual disappearance from the Australian market entirely.

I think this is primarily a supply issue, rather than one of demand.

I see sufficient evidence that the market is prepared to pay very high prices for quality solid wood.

The problem is that in a dysfunctional wood market, these price/demand signals don’t trigger a supply response as they should. If we had a strong farm forestry culture in Australia and proper functioning wood markets, these price/demand signals would be making front page news. That is where we need to get too!

So dear reader, what do you think?

Comments and ideas welcome.

Queensland farmers growing African mahogany in plantations

MahoganyNQ

This recent ABC Landline story introduced me to yet another group of Australian farmers who are getting on and growing quality high value timber for the marketplace:

http://www.abc.net.au/news/2018-08-26/african-mahogany:-plantation-forestry-could-value/10166656

African mahogany (Khaya senegalensis) has a 200+ year reputation as a premium quality hardwood, but supplies from West Africa are all but exhausted.

Check out their website:

http://mahoganynq.com/

and on Facebook

https://www.facebook.com/MahoganyNQ/

These people are at the stage of first harvest and looking to break in to the fickle Australian timber market.

The question now is – will the Australian market support these farmers in their efforts to build a new forest industry?

To date the Australian market (architects, builders, joiners, furniture makers, consumers, etc.) has shown little interest in encouraging and supporting Australian farmers growing trees for wood production.

It’s well past time for that attitude to change.

This is a great story and definitely needs everyones support.

Who said Australian farmers won’t grow timber?

Now!

Anyone for growing Tasmanian blackwood?

The forests behind the label – Why standards are not enough

Here’s a great Ted Talk about going beyond Forest Certification with the focus on small scale forest growers like existing and potential Tasmanian blackwood growers.

And when I think about the synergies between their connect-with-the grower model and a Tasmanian Blackwood Growers Cooperative I get excited.

This is just what Tasmanian blackwood growers need to get the support and recognition.

It’s about connecting consumers and manufacturers with forest growers.

What a great idea!

The Ted Talk is by Constance McDermott who is a James Martin Senior Fellow and Chair of the Forest Governance Group at the Environmental Change Institute, University of Oxford.

http://www.eci.ox.ac.uk/people/cmcdermott.html

This is a 12 minute talk well worth watching.

New group looks to become Fonterra of forestry

Here’s a great story for all those 14,000 New Zealand farm forest growers with plantations coming due for harvesting. If this is successful it will revolutionise the already very successful New Zealand forest industry. Forestry is New Zealand’s third largest export earner after dairy and meat. Last year’s total forestry exports were worth $NZ4.3 billion.

Yesterday a new forestry company, United Forestry Group, targeting owners of small forests in New Zealand was launched. Its cornerstone shareholder is a joint venture between international timber marketer Pentarch, which is headquartered in Melbourne and has been operating in New Zealand for more than 10 years, and a Chinese conglomerate, Xiangyu Group. The company’s offering small forest owners (there are around 14,000 forests under 1000 hectares which account for just over a third of New Zealand’s plantation resource) benefits similar to the pastoral sector’s co-operatives such as Fonterra in marketing and economies of scale.

It is believed production from New Zealand’s small forest growers over the next 20 years could be worth $NZ30 billion.

http://www.fridayoffcuts.com/#1

http://www.3news.co.nz/United-Forestry-Group-aims-to-fight-wall-of-wood/tabid/421/articleID/357877/Default.aspx#ixzz3B9znGRRR

I wonder if the United Forestry Group will form sub-groups to offer these services to growers of other species besides Pinus radiata, such as blackwood? New Zealand blackwood growers would really benefit from such a service.

Those New Zealanders really do understand what forestry is all about.

I will be following this story closely over the coming years to see how it develops and keep readers informed. It’s good to have a good news story.

New laws a ‘watershed’ for co-operatives

Here’s a story on the ABC News website yesterday from Tasmanian rural reporter Sally Dakis.

New [first ever] national laws launched this week are expected to make co-operatives a more attractive business model. Read the full story here.

http://www.abc.net.au/news/2014-03-05/co-operative-law-business-structure/5299992

I hope the Tasmanian Government introduces the supporting legislation soon. Anything that will facilitate a blackwood growers cooperative is a good thing.

Here’s the website of the Business Council of Co-operatives and Mutuals.