RECENT SIGNIFICANT EVENTS!
Here are three recent blogs that have significant market-related information. They relate to blackwood price, supply and ongoing trading conditions. Forest policy, management and practice in Tasmania continue to provide difficult conditions for private blackwood growers and the future of the iconic Tasmanian blackwood industry.
The forest industry in Tasmania remains deeply mired in conflict and politics with little prospect for improvement in the near to medium term.
“There is always hope!”
URGENT MARKET UPDATE
I have recently discovered that the blackwood market in Tasmania is effective closed to private growers and certainly to any prospect of investment. Please read the following articles for further details:
State Government forest policy is subsidising the special timbers (including blackwood) industry in Tasmania to the exclusion of private growers. Until this policy is changed the prospect of creating a healthy, profitable blackwood market and a blackwood growers cooperative appears to be minimal. Given that they compete with private growers in both the special timbers and the Tas Oak markets, the lack of transparency and accountability at Forestry Tasmania is a real concern. Your help is urgently needed to change this situation.
Blackwood (Acacia melanoxylon) timber has been a premium Tasmanian product for over 100 years, making it’s way to the very end of the value-adding chain in the wood products market. Used to produce high quality veneer, furniture, flooring, cabinetry, craft and musical instruments it is Australia’s premier appearance-grade hardwood timber.
But with the public forest resource looking increasingly endangered from continuing community conflict and poor commercial performance, this iconic Tasmanian product is itself in danger of commercial extinction. That is unless Tasmanian farmers can be encouraged to take on the role of grower, that has historically been the responsibility of the State Government.
So why isn’t this shift in the blackwood market already happening? With such a commercial pedigree what is stopping Tasmanian farmers from growing blackwood? Does the blackwood market operate in a manner that allows for changes in supply, demand and price?
Farmers have for a long time relied on regular market updates and reports to help them run their businesses, what to grow, when to sell, plan ahead, etc.. Important market information on many rural commodities is regularly published to help farmers make important investment decisions. In Tasmania the Tasmanian Country weekly newspaper has been the main traditional source of information. The internet now provides an even greater range of additional information for farmers.
But has anyone ever seen a forest industry market report in Tasmanian Country?
Indeed market reports for the forest industry in Australia are very rare and generally not targeted at farmers/growers. Contrast this with the forest industry in New Zealand where regular market reports (eg. Friday Offcuts, Laurie Forestry Ltd.) are a standard feature. In a country where all the commercial forests are privately owned, this market transparency is absolutely essential for the industry to survive and adapt. With the long investment time frames in the forest industry it is vital to keep growers up to date with market information.
One of my objectives with the cooperative is to help improve blackwood market transparency so that investments in blackwood wood production can be made on the best available information. In fact getting any financial support for the cooperative will rely on the marketplace clearly demonstrating some professionalism.
Here are some of the topics that need to become much more transparent:
- Current markets
- Log specifications and price ranges
- Current Supply and Quality
- Forecast Demand
- Forecast Supply
- Key market issues
- Current planting rate
I invite anyone who is in the blackwood industry (farmers, sawmillers, wood merchants, producers, retailers, etc.) who wishes to contribute to this greater transparency to contact me. We can discuss what information can become public without compromising commercial interests.
In the mean time check out how New Zealand farmers keep up to date on the forestry market here.
Here is another website I find interesting. The Northeast Timber Exchange in the New England region of NE USA is a business harvesting and buying hardwood and softwood logs from private growers (mostly small farmers) and then on-selling. Lots of market and price transparency to keep farmers interested. A business model that is absolutely unheard-of here in Australia.
We also need to educate farmers about the factors that affect tree prices. The price of a cow is not determined by the retail price of eye fillet steak, although many farmers would wish otherwise!
Blackwood Tender Prices
Here are the latest (April 2013) tender prices for blackwood logs from Island Specialty Timbers (IST). These are the only publically available blackwood prices anywhere and reflect prices tendered for the handful of logs that IST put to tender every year.
The prices may be considered mill-door rather than stumpage, and therefore include harvesting, transport and handling costs.
IST don’t say what time period these prices reflect or how regularly they are updated. There is minimal information on log grades. Prices last updated 08/11/2013.
According to my own records the IST tender prices shown on their website are incorrect. My records show IST blackwood tender prices as follows:
Blackwood logs, plain grain – $250 – $600 / m3
Blackwood log shorts, good+ quality, plain grain, $275 – $600 / m3
Blackwood logs with birds-eye figure – from $550 – $2,900 / m3
Blackwood stump sections with fiddle-back grain – $500 – $800 / m3
Blackwood logs with fiddle-back grain – up to $1900 / m3
New Zealand farmers are expecting to get 250-300 cubic metres (m3) of clear premium blackwood sawlog (equivalent to the IST “plain grain” grade) per hectare at age 35 on an average (NZ) site. Wouldn’t it be great to have a hectare of fiddleback blackwood plantation growing down the back paddock?