Category Archives: Markets

IST Tender Results 2020-21

Island Specialty Timbers (IST), the only source of competitive, transparent market blackwood log prices, conducted 10 log tenders during the year, making up for the shortfall last year due to the pandemic.

https://www.islandspecialtytimbers.com.au/

IST is a business enterprise of Sustainable Timber Tasmania (STT) which sources and retails raw material of Tasmanian specialty timbers from harvest or salvage operations conducted on State owned Permanent Timber Production Zone land (PTPZl).

You can read my previous annual tender summaries here:

https://blackwoodgrowers.com.au/?s=tender

Blackwood Results

2021 was a champagne year for blackwood!

2021 was the year that plain-grain blackwood sawlog broke the $1,000 per cubic metre price barrier!

Prices for good quality plain grain blackwood sawlogs have been sitting above $800 per cubic metres for the last few years, as seen in the chart below, but this year they broke through the price ceiling.

Premium plain grain sawlogs are what can be grown in blackwood plantations.

Will this result encourage Sustainable Timbers Tasmania/IST to put more blackwood sawlogs to tender?

Will this result capture the attention and imagination of Tasmanian farmers?

This year IST put 10 blackwood logs to tender, a total of 11.9 cubic metres, or 4.4% of the total volume put to tender for the year.

One log was unsold at tender, as was a 2 cubic metre pack of sawn blackwood boards.

Two logs had feature grain and sold between $1,250 and $1,300 per cubic metre.

The other 7 logs were plain grain, with prices ranging from $300 to $1,100 per cubic metre. Lower prices were paid for smaller logs and logs with defects (spiral grain, scars, branch knots).

Higher prices were paid for large, good quality logs.

All up the 8.14 cubic metres of plain grain blackwood logs sold for $4,259.

The following chart shows the average size characteristics of sold plain grain blackwood logs. The target sawlog for a blackwood plantation has a volume of 1.5 cubic metres and a small end diameter (SED) of around 50 cm.

Remember these are tiny log volumes sold into the small southern Tasmanian market. They represent mill door prices not stumpages.

As usual IST has a policy of minimising the amount of blackwood logs it puts to tender, despite the fact that around 10,000 cubic metres of blackwood are harvested from public native forests in Tasmania each year, and sold at “Government prices”.

Imagine if IST put 10 cubic metres of blackwood sawlog at each tender, to attract mainland and maybe even overseas buyers.

Imagine if Government forest policy was about profitable tree growers and not sawmill welfare.

Imagine what that change would do for the forest industry and Tasmania!

These positive blackwood log price signals should be resulting in more blackwood plantations being established, helping to build the industry and make Tasmanian farmers more profitable.

One hectare of well managed blackwood plantation has the potential to produce approx 300 cubic metres of premium sawlog after 30 – 35 years. At $1,000 per cubic metre that equates to $300,000 per ha in todays market.

How many Tasmanian farms have difficult corners, steep slopes and weedy areas that could be more productive growing quality wood?

General Results

Overall IST put 272 cubic metres of specialty timbers to tender in 2020-21 of which 252 cubic metres sold for total revenue of $262,700.

Last year Sustainable Timbers Tasmania sold 7,921 cubic metres of specialty timbers, so these competitive tender sales represent a mere 3% of specialty timber sales from public native forests in Tasmania.

The following chart shows the volume and price summary for all log tenders back to 2015. The price spike in the January 2021 tender was due to this tender being an all Huon pine (Lagarostrobos franklinii) tender.

The tiny volumes and wide variability in species and quality of logs that IST put to tender makes assessing trends over time difficult.

The next chart shows the average volume of the sold logs. Here there is a clear trend of diminishing log size. If it wasn’t for the occasional large eucalypt log IST throws into the tender mix, this trend of diminishing log size would be even more pronounced.

The following 2 charts show the above data summarised by year:

2020-21 was significant for a) the major increase in volume of specialty timbers put to tender, and b) a record unit price set for a single log at IST.

The record unit price of $5,300 per cubic metre was for a Black heart sassafras log at the March 2021 tender. The log was only 2.5 metres long with a volume of only 0.16 cubic metres, so total price was only $850!!

The highest price paid for a single log was at the same March 2021 tender where another Black heart sassafras log of 1.3 cubic metres sold for $5,570.

The main focus of IST tenders is black heart sassafras (Atherosperma moschatum) which can command very high prices for good logs.

https://en.wikipedia.org/wiki/Atherosperma

However the tree is slow growing (500+ years to reach commercial size) and is restricted to rainforest and old growth eucalypt forest, so supplies of this species are dwindling.

Surprisingly the marketplace continues to support the plundering of Tasmania’s last ancient forests!

Five Year Review

Again it is important to recognise that this data represents tiny volumes sold into the small southern Tasmanian market. The results DO NOT represent the wider Tasmanian, Australian or international markets.

The results are also influenced by the fact that IST is NOT a commercial business. Like its parent Sustainable Timbers Tasmania, IST is NOT obliged to make a profit. These rare timber resources are brought to market at taxpayer expense.

https://www.theguardian.com/environment/2018/mar/29/tasmanian-forest-agreement-delivers-13bn-losses-in-giant-on-taxpayers

Looking at the annual aggregate results of the IST tenders three trends are apparent:

  1. the maximum price paid for quality wood is increasing; and
  2. the volume unsold at tender is decreasing. Whether this is due to a) IST becoming better at excluding logs that will not sell, and/or b) increasing demand for quality wood, is unclear. The fact that both the average and minimum prices paid remain steady indicates better log selection rather than increasing demand. Certainly the quality of product put to tender by IST varies enormously.
  3. the average price paid for quality wood has not changed over the last 5 years, remaining at around $1,000 per cubic metre.

The 7-year trend for plain grain blackwood logs is less clear, but the volumes are microscopic!

In general the prices paid for plain grain blackwood logs have been good, with indications in the last few years of solid price increases.

Since blackwood is the only Tasmanian specialty timber species that can be grown in commercial plantations, this is good news!

Will the Government and the forest industry make use of this valuable positive market information?

Almost certainly not!

Going backwards!

There are many reasons why the forest industry in Australia is going backwards.

Here is just one small example:

PF Olsen is a forestry services company which started in New Zealand, but has also opened offices in Australia.

Here is their New Zealand website:

https://nz.pfolsen.com/market-info-news/

Notice the headings across the top of the page.

Now here is their Australian website:

https://au.pfolsen.com/

Notice the headings across the top of the page. How do they compare with the New Zealand website?

The Australian website contains nothing about Contractors & Suppliers nor about Market Information & News!

Why is that?

Are there no forestry markets in Australia?

Do tree growers in Australia not want access to uptodate market information?

Or is it because profitable tree growing is not the focus of the forest industry in Australia?

New Zealand has a real forest industry where the focus is on supporting tree growers to make sure they are as viable and profitable as possible. That way more farmers plant trees, the forest industry expands and has a successful future.

It is a successful simple industry model!

PF Olsen NZ is acutely aware of this and do their bit to ensure tree growers and the forest industry share a successful future.

Go to PF Olsen’s New Zealand website and check out their Market Info & News. It’s a great resource for NZ farmers!

Curiously PF Olsen Australia does not seem to share the same vision.

The focus of the forest industry in Australia has always been about supporting and subsidising domestic processors, at the expense of growers and the future of the industry.

Curious to hear your thoughts on this.

Please post a comment…

PS. If anyone can find a single Australian forest industry website that provides uptodate market information I’d love to know. Thanks.

An invitation to join the Forest Stewardship Council (FSC)

HI Gordon,

I’ve been reading your newsletter. Have you thought about joining your group up to FSC?

I’m in the environment chamber and on the board. Happy to talk about it if you are interested.

Cheers

I recently received this invitation to join the Australian branch of the FSC.

I’m making my reply to this invitation public because I believe the public and the marketplace need to better understand what is happening within the forest industry.

Hi XXXX

Thanks for the invitation for the Tasmanian Blackwood Growers Cooperative to join the FSC.

Twenty years ago I had hopes that the advent of the FSC would see major reform within the Australian forest industry.

Today I have no such illusions!

The fact that Bunnings/Officeworks will help shut down public native welfare forestry next year is indirectly due to the FSC, but otherwise the industry and the wood marketplace are utterly moribund.

Harsh words I know, but after a 40 year career that is the only conclusion I can come too.

The FSCs standards for “economically viable” are a joke. No they are worse than a joke! They are completely offensive and destructive to the future of the industry:.  

https://blackwoodgrowers.com.au/2019/05/13/fsc-supports-illegal-forestry-in-australia/

https://blackwoodgrowers.com.au/2016/10/17/competitive-neutrality-in-forestry/

Because of this “Standard”, private forest growers have no hope. Because of this “Standard” my Group has no future. How can it when annual taxpayer subsidies to public native welfare forestry are fully supported by the FSC and PEFC? Private growers don’t get FSC/PEFC approved annual taxpayer subsidies!!

Growing trees for wood production is a commercial activity. It is not welfare!

Should I join the FSC to help drive change within the FSC?

If Greenpeace resigned because it could not achieve meaningful change within the FSC what chance would I have of doing so?

https://blackwoodgrowers.com.au/2018/03/30/greenpeace-leaves-the-forest-stewardship-council-fsc/

Greenpeace is right! Third party certification without transparency is a waste of time. It becomes a form-filling, label-sticking exercise of little value.

So why would I join an organisation like the FSC that deliberately seeks to undermine private forest growers?

Taxpayer subsidised welfare forestry and profit-driven commercial forestry cannot coexist in the same marketplace.

It’s that simple!

The FSC supports welfare forestry and therefore undermines commercial forestry.

It’s that simple!

If the FSC wants to support and encourage farm forestry in Australia then it needs to change its assessment standards.

It’s that simple!

Yours sincerely,

Gordon Bradbury

Timber processor alarmed over ‘massive amount’ of softwood exported to China

A large truck carrying neatly piled wood logs enters a large yard with thousands of large wooden logs.

https://www.abc.net.au/news/2020-09-02/softwood-resource-exported-to-china-amid-log-supply-insecurity/12617994

Here we are. Sawmillers who have spent generations being on the Government payroll are now complaining about having to exist in a global competitive market.

With the sale of Government pine plantations, the new plantation owners are free to sell their logs to whoever they like, including customers who are prepared to pay more than domestic customers/sawmillers.

Imagine that! Competition and free trade in the forest industry. Who would have guessed?

This is a classic forest industry sob story, about poor hard-done-by sawmillers who can’t compete in a global marketplace.

The softwood industry is no longer part of the Welfare Forestry System in Australia, except in Western Australia and New South Wales, where Governments have yet to privatise their plantation estates.

I just love the pity-me language:

Our forefathers planted the trees — they were planted with a plan to create jobs into the future. It wasn’t about growing wood for Asia.”

A classic example of Trees-as-Welfare, not Trees-as-Commerce. The idea of growing trees to make a profit is anathema to these poor folk.

These sawmillers are demanding welfare not trees!

They are unwittingly demanding the destruction of their very own businesses and industry.

Clearly the Green Triangle Forest Industry Hub (GTFIH) is not the cohesive single-minded group that their website wants us to believe:

http://gtfih.com.au/

Tensions between growers and processors are running high!

The GTFIH has a plan to plant 50,000 ha of new plantation over the next 10 years. That definitely won’t happen with stories like this in the media.

Who would want to plant trees knowing you cannot trade in an open competitive market? Nobody that’s who!!

Unfortunately the article does not talk about prices and markets, or any idea of the growers side of the story.

And as for an industry Code of Conduct, that would be the final nail in the coffin for the already struggling forest industry in Australia.

What other primary producers in Australia face a more hostile political environment than tree growers? I can’t think of any! Happy to have your comments!

Anyone growing trees for wood production in Australia, whether plantation or native forest, should be very worried right now. Your investment is about to be destroyed by your politicians.

What a total mess the industry is!!

A proposal to develop New Zealand’s alternative, specialty timbers industry

cropped-p26-nicholas-presentation-blackwood-2011m.jpg

https://fgr.nz/2020/07/14/survey-a-proposed-industry-association-for-alternative-specialty-timbers-and-small-scale-sawmillers/

This sounds exciting!

As usual the New Zealand forest industry is generations ahead of anything happening here in Australia.

This new proposal to establish a NZ Specialty Timbers Association is just brilliant.

Unlike specialty timbers in Tasmania, the industry in NZ has nothing to do with plundering public native forests, or endless, repetitive political games.

New Zealand’s specialty timbers are farm-grown, and include plantations and managed native forest.

A discussion paper about the proposal is available from the above website. It is only 5 pages and well worth reading.

One of the interesting aspects of the proposal is the key role which portable sawmillers will play in the Association; providing the vital link between the marketplace and the thousands of specialty timbers growers in New Zealand.

The current focus of the discussion paper is on the NZ domestic markets which is fine. There are plenty of opportunities locally. But there are a few specialty species (incl. Blackwood) for which available volumes are already in excess of domestic demand, so that export markets must be developed immediately.

Two aspects that I believe are vital for the new Association to consider:

  1. An Industry Plan is needed, with objective, measurable goals and regular reviews. Having thousands of farmers randomly planting thousands of different timber species with no vision or coordination, will not build a viable future. The marketplace needs to develop a select list of preferred species, so that viable marketable quantities of quality wood from these species are available to the market.
  2. Lots of marketplace support and feedback, from builders, architects, craftspeople, etc., needs to be generated so that farmers can have a sense of what they are doing and why. Currently the marketplace completely avoids thinking 10, 20, 30 years into the future when it comes to timber supply. This must change!!

I will follow this story as it develops over the coming months and years.

Congratulations New Zealand!

You have done it again!!

A Change of Policy

BunningsBlockade

Having spent decades/generations complaining about protesting and blockading “greenies” in the public forests, and demanding legal and political protection from such activity, it seems the forest industry in Australia now openly supports a citizen’s right to protest and blockade.

https://www.abc.net.au/news/2020-07-22/bunnings-logging-protest-after-ditching-victorian-timber/12479914?fbclid=IwAR1HFW46QenXcPH6egLqbAWwTMZZN3EAuVmatbi8wao16Q1ANP9d2fQGOPg

Who would have guessed that such a dramatic change in industry policy was possible?

https://www.theguardian.com/australia-news/2020/feb/21/tasmanian-anti-logging-protesters-banned-from-forests-over-unsafe-behaviour

Even politicians who have been champions of “lock up the protestors”, have changed their spots and are preparing to chain themselves to the nearest Bunnings charity barbeque.

Will that be white or wholemeal bread with your sausage Maam? Onions? Sauce or mustard? I hope your chains are comfortable Maam! Can I get you a seat?

https://www.theadvocate.com.au/story/6846846/will-braddon-mp-hit-a-bunnings-jail-snag/?cs=12&fbclid=IwAR3yr7tdPMtrABF2Xz02fMTJODND20qQU8gf87ZpGo5buZuXeUQUcYfDK80

It’s not a good look for the forest industry. Bunnings Hardware is stepping out courageously and developing a social conscience, and the forest industry is demanding that they stop!!

I’m not going to mention the “H” word because people get offended by that kind of language. Instead I’m giving these people the benefit of the doubt and assume the forest industry is now a champion of freedom and democracy. The right to protest is a fundamental cornerstone of democracy….even when you are on the receiving end of the protest!

From now on the forest industry will welcome protestors to the public forests with open arms, divided by values but brothers and sisters in freedom and democracy!

And we will hear no more rubbish about Anti-Protest Laws in Australia from either the forest industry or politicians, otherwise I will be forced to use the “H” word!!

It’s a New Age!!

More industry-destroying salvage timber

Whilst wandering around the internet I came across some more Australian salvage timber prices that are completely outrageous!

Once again this is farm salvage macrocarpa cypress.

But these prices are beyond ridiculous.

These prices are total destructive of farm forestry and the greater forest industry.

“Structural” grade macrocarpa timber for $800 per cubic metre???

Even the seriously large sizes are the same cheap price.

These prices are for lengths up to 4.2 metres. Pay 20% extra for lengths of 4.2-4.9m, 30% extra for lengths of 5-5.9m, 40% extra for lengths of 6-6.5m.

Madd

This sawmiller’s motto is “quality timber at affordable prices”!!

More like “premium timber at give-away prices” buy now before it’s all gone!!

This sawmiller obviously believes he’s doing a good job helping farmers get rid of unwanted trees and turning them into something useful.

Instead they are guaranteeing that no one will have premium timber in the future!

When I made this chart up, I had to go back and check my figures to make sure I was doing it right. I could not believe what I was seeing.

No farmer is going to bother growing cypress (or any tree) for wood production when its “sold” on the market at these prices.

If the forest industry wants a future; if the marketplace wants to have premium wood in 20, 30 years time, then this nonsense must stop!!

This kind of pricing destroys your future!

https://blackwoodgrowers.com.au/2020/06/13/salvage-timber-markets-and-their-destructive-impact-on-the-forest-industry/

IST Tender Results 2019-20

IST 1219 log35b

Well I’m sure we can all agree. It definitely hasn’t been your average year!

Island Specialty Timbers (IST), the only source of open, competitive, transparent market blackwood log prices, managed to conduct 6 log tenders during the year. A normal year would see 8-9 log tenders.

https://www.islandspecialtytimbers.com.au/

IST is a business enterprise of Sustainable Timber Tasmania (STT) which sources and retails raw material of Tasmanian specialty timbers from harvest or salvage operations conducted on State owned Permanent Timber Production Zone land (PTPZl).

You can read my previous annual tender summaries here:

https://blackwoodgrowers.com.au/?s=tender

 

Blackwood Results

Despite the fact that blackwood is by far the most common specialty wood in Tasmania, IST insists on restricting tender sales of blackwood. Only 3 blackwood logs were put to tender this year in 2 of the 6 tenders; 3 logs out of a total of 194 logs put to tender!

That’s pretty pathetic!!

Tasmanian blackwood is the only specialty timber species that can be grown in commercial plantations. Having a plentiful supply of market information might actually stimulate investment in tree growing in Tasmania, but IST/STT and the Tasmanian Government are determined to prevent any useful market information being available.

IST/STT and the Tasmanian Government continue to support Welfare Forestry in Tasmania, instead of promoting a profitable commercial forest industry.

All 3 blackwood logs put to tender sold, 1 log had figured grain, the other 2 logs were plain grain.

All 3 logs were of good size and reasonable quality.

The figured grain blackwood log sold for $825/m3, total price $982.

The 2 plain grain blackwood logs sold for $400-$450/m3, total prices $468-$774.

The following chart shows the volume and price data for the last 6+ years for plain grain blackwood logs. Having enjoyed 4 years of steadily improving prices this year showed a subdued market.

These logs are sold into the small local Tasmanian market which restricts prices somewhat.

These prices are effectively mill door delivered, not stumpage prices.

IST 2020 blackwood prices

The following chart shows the range in size of the sold plain grain blackwood logs.

A target plantation grown blackwood log has a volume of 1.5 cubic metres and a small end diameter (SED) of approx. 50 cm.

IST 2020 blackwood vol SED

General Results

Overall IST put 112 cubic metres of specialty timbers to tender in 2019-20 of which 97 cubic metres sold for total revenue of $94,200.

Last year Sustainable Timbers Tasmania sold 9,747 cubic metres of specialty timbers, so these competitive tender sales represent a mere 1% of specialty timber sales from public forests in Tasmania.

The following chart shows the volume and price summary for all tenders back to 2015.

 

IST 2020 alltender volumes

The tiny volumes and wide variability in species and quality of logs that IST put to tender makes assessing trends over time difficult.

The next chart shows the average volume of the sold logs. Here there is a clear trend of diminishing log size. If it wasn’t for the occasional large eucalypt log IST throws into the tender mix, this trend of diminishing log size would be even more evident.

IST 2020 alltender logvol

The following 2 charts show the above data summarised by year:

IST 2020 annual volumes

What remains apparent is that the market continues to pay high prices for quality timber.

IST 2020 annual logvol

The main focus of IST tenders is black heart sassafras (Atherosperma moschatum) which can command very high prices for good logs.

https://en.wikipedia.org/wiki/Atherosperma

However the tree is slow growing (500+ years to reach commercial size) and is restricted to rainforest and old growth eucalypt forest, so supplies of this species are dwindling.

Surprisingly the marketplace continues to support the plundering of Tasmania’s last ancient forests!

For 2019-20 black heart sassafras made up 37% of sold volume and 52% of tender revenue, whilst eucalypt feature grain logs made up 22% of sold volume and 9% of tender revenue.

6.7 cubic metres of celery top pine logs (Phyllocladus aspleniifolius) were sold at an average price of $1,050 per cubic metre.

Overall highlights for the year were $4,975 per cubic metre paid for a small musk (Olearia argophylla) log; whilst a total price of $2,933 was paid for a medium sized black heart sassafras log.

Bunnings stops selling timber logged by VicForests after court ruling

Bunnings

https://www.theguardian.com/environment/2020/jul/01/bunnings-stops-selling-timber-logged-vicforests-court-ruling

HOORAY!!

Bunnings, Australia’s largest hardware chain and retailer of public native forest products, has brought forward its decision to end the sale of Vicforest products by 6 months.

Back in May the Federal Court ruled that Vicforests was in breach of Australia’s environmental laws. It’s not the first time Vicforests has been in court, so Bunnings has decided enough is enough!

https://www.theguardian.com/environment/2020/may/27/vicforests-breached-forestry-agreement-with-central-highlands-logging-court-rules

The first domino in the marketplace has fallen. The pressure will now mount in the marketplace for other businesses to follow Bunnings example.

The end of WELFARE FORESTRY in Australia is in sight.

Wesfarmers/Bunnings/Officeworks policy is to only sell FSC certified timber products come the 1st January 2021:

https://sustainability.wesfarmers.com.au/our-principles/sourcing/suppliers/

Now Vicforests, then Sustainable Timbers Tasmania will no longer enjoy Bunnings support come December.

Bunnings are to be congratulated on having a social conscience and sticking to it!

Made my day!!

Salvage Timber Markets and their Destructive Impact on the Forest Industry

If we had a real forest industry in Australia and properly functioning timber markets then salvage timber would be just another option in the marketplace. But neither of these conditions applies.

Australia does NOT have a real forest industry NOR does it have proper functioning timber markets.

So when I go to buy macrocarpa cypress timber for a project and pay a price that is ridiculously cheap I realise that, as a consumer, I am helping to destroy the forest industry that I am so passionate about.

The chart below shows the price list for green macrocarpa from the retailer I went to.

The chart shows that regardless what size timber you buy, you are paying the same very low price by volume.

This is salvage macrocarpa from old farm trees around Tasmania. The quality of the salvage timber is variable. But good quality macrocarpa is a premium timber.

Macrocarpa

Cypress is also an ideal farm forestry tree as New Zealand farmers are well aware. It is quick growing, easy to grow on a wide range of sites, and produces a premium timber.

https://www.nzffa.org.nz/farm-forestry-model/species/cypress/

But I know of only 4 farmers in Tasmania who are growing macrocarpa in small plantations.

This is despite the fact that the timber is in high demand.

So when sawmillers and log traders buy old farm trees and pay next-to-nothing for them, and timber retailers sell the timber for bargain prices, who gets the message that demand and prices are high? What farmers are going to invest in growing this premium timber when the marketplace fails as it clearly is?

If I had to pay the real (replacement) cost of growing this wood, plus a premium for the fact that I am buying a premium product, I would expect to pay MUCH MORE than $2,780 per cubic metre.

Never mind that the price list shows no price premium for large sizes as there should be.

If it was Tasmanian oak I’d be paying over $10,000 per cubic metre for my pieces of timber!!

This is a typical salvage timber price list.

The price list is designed to reflect the fact that no one is deliberately growing this wood in Tasmania.

In other words the price list is designed to prevent investment in tree growing.

Tasmania could have a thriving, valuable macrocarpa industry, but it chooses not too; as if Tasmania has a super abundance of commercial opportunities from which to choose.

Sawmillers and timber merchants traditionally take no responsibility for their own future. It is someone else’s job to encourage and support tree growers.

Would any of my New Zealand readers like to share their local price of macrocarpa/cypress timber?

Within Australia I would include public native forestry within this same “salvage” category since the market price for public native forest timbers does not reflect the cost of growing the wood.

It is the responsibility of the marketplace to support and encourage tree growing otherwise there will be no timber in the future.

How do we fix timber markets in Australia so they support commercial tree growing?

How do we stop the salvage timber market from undermining the forest industry?

When will Australia get a real forest industry?