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The projected peak in the wood supply - A need for action

Wink Sutton's Blog
Wednesday, February 27, 2013

The rate of new plantation establishment was low in the late 1980s but became exceptionally high in the early to mid 1990s. In the late 1990s and in the first decade of this century there has been almost no new planting. The result of this very uneven rate of new planting was well documented in the paper by Chris Goulding and Hamish Levack in the November 2012 issue of Tree Grower.

Because of the very uneven rate of new planting in the past there could be a flood of wood in the 2020s which will be followed by a major wood shortage in the 2030s and 2040s. In recognition of the seriousness of the problem, an NZFFA working group has been established to consider what might be done to resolve the matter − see the article by Howard Moore and Hamish Levack.

Coordination vital

Unless there is a co-ordinated effort, forest owners of the plantings of the 1990s will all be trying to market their wood at the same time. Without a co-ordinated wood supply there will be very serious consequences for New Zealand. Wood prices will inevitably decline as overseas buyers increasingly become aware of the wood surplus. Without a co-ordinated effort, overseas wood buyers will be able to play one forest owner off against another. The result could be not only reduce the returns of both forest owners and the New Zealand economy, but also result in a lack of investment in new planting. Who will be attracted to invest in plantations when the current wood price is so poor?

The prices for pruned logs will decline the most. The current price for pruned logs is so low that pruning is now considered a marginal investment. If the market is flooded with pruned logs and New Zealand is the only significant global supplier, the price could fall even more and there would be even less interest in pruning than there is now. That in itself will have serious consequences for the industry. If framing timber is to become the basis of New Zealand forestry, and not the production of clears, then there will be less international interest in New Zealand forestry because South America offers greater potential for investment in framing forestry.

Learn from the past

The annual global harvest of industrial wood is about 1.5 billion cubic metres. Therefore the New Zealand harvest of about 20 million cubic metres is not globally significant, but we are a significant exporter of logs. An increased supply from New Zealand could reduce the global price for logs as buyers play us off against other international log suppliers. Unfortunately we would be seen as being the cause of a decline in global log prices.

A concentrated planting effort, followed by almost no new planting, happened in the past. In the period 1925 to 1935 most of the older plantations were established. In the period 1935 to the mid 1950s there was almost no new planting.

If the earlier plantings had been harvested at about age 35, then considered to be the average rotation length, there would have been a peak wood supply in the late 1960s and the early 1970s. This peak in the wood supply would have been followed by a very serious decline in the wood harvest for the next 20 years. That this did not happen was because of a co-ordinated effort to smooth out the wood supply.

Some stands were left to grow on rotations far longer than originally intended. Other stands were late thinned to further lengthen the rotation. This very important co-ordinated effort has been poorly documented. For example, I can find no reference to it in the annual reports of the Forest Service. The big difference between what happened in the past and the present situation is that, while most of the plantations were originally owned by either the Forest Service or large companies, many of the new plantations are owned by about 20,000 of small-scale owners – forest partnerships, farm foresters and individuals.

Flattening the peak

To prevent what could be a disastrous development for the whole New Zealand forest industry there has to be urgent discussion of possible actions to flatten the peak wood supply of the 2020s and so prevent the inevitable wood supply shortage that will follow. To leave the matter to the free market is a certain way to invite the decline in faith in plantation forestry as well as the New Zealand economy.

As a responsible forest organisation whose members will almost certainly be adversely affected it is our duty to find a solution to the problem. With a co-ordinated effort we could turn, what if left to a free market, will be disaster into one in which forestry sector is a real winner.

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The importance of repeating the message

Wink Sutton's Blog
Thursday, November 29, 2012

My article on page 42 on the sawing of Hull’s pruned radiata raises a very relevant point. Even though I was involved in the preparation of Fenton’s report on his 1962 sawmill study, I had completely forgotten the relevance of that work. However, as I remembered Brown’s report, I always thought that the sawing of Hull’s trees was the first sawing of pruned radiata logs.

In my defence I want to say that Fenton’s report was not published until 1967. Although technically accurate the title was very general and gave little indication of what the paper was really about. Being a technical paper I very much doubt if anyone actually read the complete report. And if they did, I doubt if anyone gave much thought about the implications.

When I was a scientist at the Forest Research Institute (now Scion) I spent 20 to 25 per cent of my time visiting forests, giving talks and lectures and taking visitors around. Even though these activities took me away from my research they contributed greatly to my work. I have published many scientific papers and written many branch reports. I slowly became acutely aware that few of my publications had been read in full and more importantly, my writings were having little effect on operations. Forest managers do not have time to read research reports and even more importantly, they rarely have the training, experience or even the ability to interpret the practical implications of a scientific study.

By talking to other than research staff you soon found out if your research was relevant. Talking with practitioners often led to subtle, and occasionally big changes in your research.

The Director of Production Research, Harry Bunn, was an enthusiastic supporter of researchers getting out of the ivory tower of research and testing ideas with field staff. Harry knew from experience the value of forest visits, of field demonstration areas, meetings and of symposiums.

I had many arguments with Bob Fenton about the repetition of research findings. Bob was very much against scientists who repeated, by way of writings and talks, the same message. Encouraged by Harry Bunn we did just that and I am convinced we were right to constantly and consistently say the same thing. I was once at a meeting and, although I was out-numbered by those who held a different view, I repeated my usual message. The audience laughed. When I asked others why everyone seemed to laugh I was told almost everyone was expecting me to say what I did. When selling toothpaste, hamburgers, pizzas, travel agencies, one advertisement achieves nothing but repeating may prove effective. The same is true for effective scientists.

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Disclaimer: Personal views expressed in this blog are those of the writers and do not necessarily represent those of the NZ Farm Forestry Association.

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