Category Archives: Prices

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.

Freeman Interview

Hi Graham,

Congratulations on winning the Tasmanian Tree Farmer of The Year 2021 Award.

It’s a prestigious award!

1. Firstly can you give my readers some background? How did you get into farming and into growing trees?

I was raised on my parents farm and for as long as I can remember I wanted to farm and own an area of land and bush. I got into growing trees for their aesthetics and the environmental benefits they provide.

Our farm (Judy, my wife and I) is broken up by a series of short steep drops running basically North to South and were covered in bracken fern and blackberry.  The prevailing winds are west/southwest so these banks seemed a percect place to provide erosion control and wind protection.  Providing shelter was our primary aim in planting trees.

2. What tree species are you growing and why? How much of your farm is dedicated to growing trees?

I wanted to grow a variety of species (probably too many) that I was interested in and thought may grow reasonably well in our climatic conditions.

Species include: Sequoia Sempervirens, Eucalyptus Regnans, Pinus Radiata, Cupressus Macrocarpa, Cupressus Lusitanica, Cupressocyparis Leylandii, Thuja Plicata, Psuedotsuga Menziesii, Chamaecyparis Lawsonia.

Approximately 14 hectares is plantation.  Native bush is predominantly backwood.

3. Do you enjoy growing trees?

Yes I enjoy growing trees and I find it very satisfying and fulfilling.

4. Can tree growing be a profitable addition to a farm enterprise in Tasmania?

Tree growing can be a profitable addition to a farming enterprise.  We have profitably harvested Blackwood (non plantation). Personally harvested and sold a small plantation of Radiata that was on the farm when purchased.  We have just completed a profitable thinning and on site milling of our oldest redwood plantation.

5. As a tree farmer how much support and interest do you get from the local forest industry and wood markets?

As growers of mainly small lots of specialty timbers I dont consider we fit the normal profile for local timber markets, however have had local interest in Redwoods, and can always sell Radiata.

6. How much do you know about wood markets, supply, demand and prices? Is this information readily available to you?

Finding a transparent comparison of prices can sometimes be a little difficult. There are established markets for Radiata, however there are no established markets for Redwoods.  C. Macrocarpa is attracting interest, however there is currently no transparent pricing for it.

7. As an award winning tree farmer do you think the market will now sit up and take notice and support and reward your efforts? In other words does the Award have any leverage in the marketplace?

I honestly do not know if the award will provide any leverage in the market place, however this should not be a negative.

8. Can you tell me where you think farm forestry will be in Tasmania in 20 years? Will it be a thriving profitable business or will it continue to struggle as it has for the past 50 years?

A very hard question!  I would love to see a time when farmers would plant a crop of trees as readily as a crop of potatoes.  I have no crystal ball but I think the reality is that it will continue to limp along.

I sincerely hope that the imperative for farming to achieve carbon neutrality may encourage farmers to store carbon.  Hopefully farmers may consider planting speciality timber trees such as blackwood and redwood etc., that can store carbon for the longer term.  The carbon credits for these plantations would be passed on with the sale of the farm and thus maybe help overcome the hesitancy of growing trees that require a longer time frame.

9. There are many issues holding farm forestry back in Tasmania. What do you think are the two most important of these issues?

Hard to limit it to two.

I think one is to provide clear and transparent pricing and encouragement from forestry companies so that farmers can be reasonably certain of achieving a satisfactory return for “locking up” part of their farm for a long period of time.

For the majority of farmers timber has to provide a return that at least gets close to equalling the return they may get for any other use they put their land too.

The other issues I see, especially for growers of longer term specialty species is how to encourage farmers to plant trees that personally they are unlikely to realise a monetary profit. Hopefully carbon neutrality may help.

10. Finally on a positive note, can you tell us about your best experience as a tree farmer.

Growing, felling and milling your own timber is extremely satisfying, however the most extreme experience is standing in a 40 year old plantation of Redwoods realising their beauty and knowing they were planted by us!

Kind regards

Graham and Judy

Thankyou Graham for your time, and may your tree-growing efforts not go unrewarded.

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!

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.

ACCC suing Government Business Enterprise (GBE) over alleged anti-competitive conduct

ACCC

At long last the Australian Competition and Consumer Commission (ACCC) is taking action against anti-competitive State Government businesses.

Hooray for that!!

https://www.abc.net.au/news/2019-12-09/accc-suing-tasports-over-alleged-misuse-of-market-power/11781852

And it is in Tasmania!!

Now who would EVER imagine anti-competitive GBE behaviour in Tasmania?

https://www.accc.gov.au/

I’ve written about this issue previously as it relates to the forest industry in Tasmania, particularly public native forestry:

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

and

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

ACCC Chairman Mr Rod Sims said the case against Tasports was the first of its kind under the amended misuse of market power provision, an “important law reform designed to protect the competitive process and help us address the harm that anti-competitive conduct does to consumers and the Australian economy“.

Does handing out $100 millions of taxpayer dollars over decades to a failed State-owned forest enterprise, which is in direct competition with private forest growers, amount to anti-competitive behaviour?

It sure does!

Does selling 99% of your forest produce “off-market” in long-term secret sales contracts, with absolutely no competition or price transparency, amount to anti-competitive behaviour?

It sure does?

Now is the ACCC prepared to take on any more anti-competitive Government Buisness Enterprises?

I sure hope so!

Wouldn’t it be a laugh for Sustainable Timbers Tasmania to gain FSC Certification, only to then be prosecuted by the ACCC for anti-competitive behaviour?

Only in Tasmania!

Tasmania will never have a proper commercial forest industry until anti-competitive welfare forestry is stopped.

 

IST Tender Results 2018-19

It’s time for my annual summary of Island Specialty Timbers (IST) log tender results.

http://www.islandspecialtytimbers.com.au/

https://blackwoodgrowers.com.au/2018/07/07/ist-tender-results-2017-18/

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?

Results

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.

IST 2019 tender results

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…

Average sold log vol 2019

This year I’ve created the same charts as above but aggregated on an annual basis.

IST 2019 tender annual

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 2019 tender annual log vol

Blackwood

Log27 1018b

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.

IST 2019 blackwood prices

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.

IST 2019 blackwood vol SED

Standout blackwood results for the year were:

  1. A massive 3.1 cubic metre figured grain log that sold for $800/m3 for a total price of $2480;
  2. 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.

IST blackwood price summary

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!

PriceVSlength

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.

Caveats

  • 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.

Indian Rosewood

And speaking of prices I must include my story from April about the record Indian Rosewood log price:

https://blackwoodgrowers.com.au/2019/04/15/rosewood-log-gets-record-price/

Assuming this is a plain grain rosewood log it is an extraordinary price of $AUD14,400 per cubic metre!

Rosewood log gets record price

RosewoodLog

https://timesofindia.indiatimes.com/city/kozhikode/rosewood-log-gets-record-price/articleshow/66172798.cms

This recent article in the Times of India caught my attention. That’s not surprising given my interest in log markets and prices.

The Indian Government has tight controls over the harvesting and sale of logs. These logs were Government owned. The Government retained the rights to the trees when the land was subdivided and sold.

The various State forest agencies in India conduct regular log auctions with the objective of improving market transparency, reducing corruption, and maximising the value adding for its forest products.

That’s right! Unlike here in Australia, the Government of India is not interested in subsidising sawmillers, boat builders and craftspeople.

East Indian Rosewood (Dalbergia latifolia) is a high value timber, and these numbers certainly confirm that.

Species: East Indian Rosewood (Dalbergia latifolia)

Log Class: I

Girth (cm): 246

Diameter (cm): 78

Length (m): 3.1

Volume (m3): 1.49

Unit price ($AUD): $14,400

Total price ($AUD): $21,500

No comment is made about the wood grain of the log, whether it was straight or feature grain.

I’ve converted the Indian prices to Australian dollar prices.

The log was purchased by Gemwood a company that amongst other products specialises in supplying the international tonewood market.

http://www.gemwood.com/

I wonder what impact such transparent competitive log prices have on the planting of trees in India? Do Indian farmers really plant rosewood trees knowing that in 100 years time someone will make money harvesting the trees? Do they appreciate that the rosewood trees they harvest today are due to the far-sighted benevolence of people 100 years ago?

In my 40 years as a forester I’ve never seen a newspaper article like this in Australia. That is because the forest industry in Australia believes that log prices and competitive transparent markets have no part to play in the industry’s future.

Across the Tasman Sea the very successful New Zealand forest industry has the opposite viewpoint.

Will we ever see prices like these for Australian logs?

And if we did would it have any impact on the tree-planting behaviour of our farming community?

When will Australia get a real forest industry?

PS. Just discovered this earlier news article about the harvesting of these rosewood trees. Certainly makes for an interesting story.

https://timesofindia.indiatimes.com/city/kozhikode/centuries-old-rosewood-trees-in-wayanad-face-the-axe/articleshow/63791118.cms

I wonder if that’s a Tasmanian record?

blackheart

At the recent January 2019 IST log tender a single black hearted sassafras log sold for $10,100!!

I wonder if that is a record price for a native forest log in Tasmania?

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

The log had the following measurements:

Length: 5.2 metres

Small end diameter: 71 cm

Large end diameter: 85 cm

Volume: 2.48 cubic metres

Unit Price: $4,075 per cubic metre

Black hearted sassafras is a slow growing rainforest tree native to Tasmania and Victoria.

Most black heart sassafras timber comes from unsustainable, taxpayer funded, public native forest logging in Tasmania, including the Government approved logging of Conservation Reserves.

Most Tasmanians and Australians don’t seem to care about Tasmanian forests!

Anyway it is an extraordinary price for a log.

IST Tender Results 2017-18

It’s time for my annual summary of Island Specialty Timbers (IST) log tender results.

http://www.islandspecialtytimbers.com.au/

This is the only competitive market forest log price data publically available anywhere in Australia.

General

During the year Island Specialty Timbers conducted 7 tenders putting a total of 154 cubic metres of special species logs, craftwood and sawn wood to tender.

Total sold volume was 99.8 cubic metres (65%).

Total tender revenue was $90,900.

201718ISTpricechart

The above chart shows the log volumes and log prices paid per tender. Craftwood and sawn wood are not included in this chart.

The large volume of unsold logs at the April 2018 tender was mostly due to a large parcel of Silver wattle (Acacia dealbata) logs.

201718ISTlogsizechart

The above chart shows the average volume of logs sold at tender by IST. For some context to this chart, the target plantation blackwood log is 1.5 cubic metres in volume (DBH 60 cm pruned to 6 metres). So it can be seen most of the IST logs sold at tender are small to very small in size.

The highlights for the year were a) a tiny black heart sassafras log (1.1m length, 30 cm small end diameter, 0.07 cubic metres volume) that sold for $3,800 per cubic metre. Indeed at this August 2017 tender 5 small BH sassafras logs totalling 0.54 cubic metres sold for a total of $2,025; and b) a very large huon pine log (4.3 cubic metres) sold for a total $4,623.

Two species attracted strong demand and high prices during the year, these being black heart sassafras (BHS) and huon pine, with average log prices well over $1,000 per cubic metre. BHS and huon pine made up 21% and 13% respectively of the sold volume. Blackwood and feature eucalypt/tas oak were the other major sellers at 18% and 23% of sold volume.

In fact 2 tear-drop grain tas oak logs sold for over $1,700 per cubic metre, an extraordinary price for a wood that the market generally regards as a cheap commodity.

Celery top pine sold for an average $580 per cubic metre (3.7 cubic metres total sold).

Silver wattle and blackwood made up 76% and 15% respectively of the unsold volume for the year.

So what can we say with three years of IST tender results in the chart?

Answer: Not much!

There is no apparent trend in price over the last 3 years. Sure the volumes are small, the market is restricted and the quality of produce is highly variable.

What can be said is that even given these limitations the market will pay very good prices for quality wood when it wants to, with maximum prices averaging $3,000 per cubic metre, even for tiny logs!

These tendered log volumes represent less than 1% of the special timbers annual harvest, and a mere 0.01% of the wood harvested annually from public native forest in Tasmania. The rest is sold at Government (non-market) prices on long term, perpetual sales contracts.

According to Forestry Tasmania’s Annual Report in 2016/17 IST sold a total of 829 cubic metres of product [tender and direct sales]. The annual report does not give separate accounts for IST so their income and costs are unknown.

Blackwood

Log8 102017a

In general the IST tender results provide little information that is useful to the marketplace with the exception of blackwood. Tasmanian blackwood is the only Tasmanian “special species” that has the potential to be grown commercially; the other species being too slow growing.

Sixteen blackwood logs (23.5 cubic metres) were put to tender in 2017-18 of which 10 were sold (16.3 cubic metres) for a total of $12,210.

Five of the sold logs (7.6 cubic metres), described as having figured grain, sold for a total of $7,460. These logs averaged 5.2 metres length, 57 cm small end diameter and 1.5 cubic metres volume.

The 5 plain grain logs (8.7 cubic metres) sold for a total of $4,754, an average price of $545 per cubic metre. These five logs averaged 6.0 metres in length, 54 cm small end diameter and 1.7 cubic metres volume. In other words these were good size, quality logs equivalent to what can be grown in a well managed blackwood plantation, which would produce approx. 300 cubic metres of high quality sawlog per hectare at harvest.

This is a very good price and a substantial increase on the last three years.

ISTBWDchart1718

The stand out blackwood results for the year were a) $1,300 per cubic metre for a 1.76 cubic metre log containing tear-drop figured grain, and b) $2,467 total price for a very large (2.53 cubic metre) figured log.

The unsold blackwood logs consisted of a) one huge figured grain log measuring 5.7m length 75 cm small end diametre and 3.4 cubic metre volume, and b) 5 plain grain logs averaging 4.3 metres length, 46 cm small end diameter and 0.8 cubic metres volume.

Remember these are tiny volumes in a small market (southern Tasmania). Whether they represent the broader blackwood market is unknown.

Remember these prices are “mill door” equivalent prices with harvesting and transport costs already “included”. They are not stumpage prices.

Also remember that Sustainable Timbers Tasmania/IST is a taxpayer funded community service organisation bringing these timbers to market from Tasmania’s public native oldgrowth and rainforests:

Tasmanian regional forest agreement delivers $1.3bn losses in ‘giant fraud’ on taxpayers

Softwood growers seek sector review

SWANpine

https://www.bdtimes.com.au/?news%2Fbusselton-dunsborough-times%2Fsoftwood-growers-seek-sector-review-ng-b88817681z

WOW!!

This must be the first time in my 40 year career as a forester that I’ve heard farm foresters openly complaining about Government control of forestry markets in Australia.

This is a unique event.

Hopefully this is the beginning of the major reform of the forest industry that is so desperately needed in Australia.

We really need to keep this discussion going.

And it’s not just about softwood prices.

It’s also about native forest log prices, and markets, transparency and competition.

It’s also about Government forest policy which is firmly focused on subsidising sawmills, and not about profitable tree growers.

This is true right around Australia!

I wish the WA farmers luck in their discussions with the State Government.

Even if you don’t succeed initially, keep the discussion going. Keep the campaign alive.

The fact that here we have farmers wanting to grow trees for wood production and yet we have Government policy directly hindering their efforts is beyond madness.

GOOD LUCK!