Wairarapa Rural Outlook March 2020 by Wairarapa Times-Age

www.age.co.nz Thursday, March 26, 2020

WAIRARAPA

RURAL OUTLOOK

MARCH EDITION

WHAT TO DO WHEN THE DROUGHT BREAKS P20 ALTERNATIVE CROPS PROGRAMME PRODUCES INTERESTING RESULTS P26 STAY IN THE RIGHT HEADSPACE P40 Some stories in Wairarapa Rural Outlook were written prior to the most recent developments in the covid-19 pandemic.

WHAT TO DO WHEN THE DROUGHT BREAKS

Article by Sara Sutherland BVSc, Vet Services Wairarapa

Farmers seem to be divided in opinion as to whether the dry this summer is just a normal Wairarapa dry summer after a couple of wet summers, or the worst drought in 50 years. It’s early March as I’m writing this and I’m hanging out for them to declare it a drought, because as soon as that happens, then the drought usually breaks. Remember though – when the drought breaks your troubles may not be over. After you celebrate your lovely long gentle rain, and jump in a few puddles (because you’re never too old to jump in puddles), start to think about a couple of other animal health issues to expect. Worms, Facial Eczema, and ˜ y strike are three to

look out for. When pastures are really dry, eggs are less likely to hatch into larvae. Many of the larvae that do hatch will dry out or be killed by UV. Larvae need a bit of moisture to climb up out of the poo, on to the grass. Once we get 10 to15 millimetres of rain, those larvae start wiggling up on to grass and getting eaten. Barber’s Pole worm (Haemonchus contortus) likes warm and wet conditions. In the Wairarapa we don’t get this worm every year. That ÿ rst ˜ ush of feed after a drought is one situation where we often see them. Because the Barber’s Pole worm sucks blood, you will not see dags or diarrhoea. We have also had some cases of Barber’s Pole during the drought because animals are eating very close to

www.age.co.nz Thursday, March 26, 2020

IF YOU WANT TO KNOW WHAT IS GOING ON IN YOUR PADDOCKS, BRING IN SOME GRASS SAMPLES FOR US TO TEST – 50-60G OF GRASS (HALF A BREAD BAG FULL) CUT FROM AS CLOSE TO THE GROUND AS YOU CAN WITHOUT PICKING UP DIRT.

the ground and picking up any larvae that are there. The good news is that Barber’s Pole worm is easy to kill. Talk to your vet to discuss which drench you should use. So once it starts raining, when should you start to drench?

We can get a rough idea of how many worms they have by counting worm eggs in faecal samples (a “worm egg count” or “faecal egg count”). Talk to your vet about when to drench and which mobs to drench for your situation, and

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disease that likes warm and wet conditions, but for a quite di˛ erent reason. The disease is caused by a toxin released by a fungus – and fungi don’t like dry conditions or wind. Once the weather turns wet in the autumn, as long as it is

bring in some poo samples for us to test for worm eggs. You should all have a parasite control plan. Call your vet to discuss this. We do dispense small volumes of drench for lifestyle block farmers. Facial Eczema is another

still warm overnight, it doesn’t take long for spore counts to skyrocket. Clinical signs are droopy ears, swollen faces and peeling skin. These are an important animal health and welfare issue but these are just the tip of the iceberg. The real economic impact of FE is caused by liver damage. These end up being dry at scanning, or dead at lambing, or get culled earlier. Once the liver has been a˛ ected there is not much that you can do. Before the liver is a˛ ected, there are things you can do – getting them onto safer pastures (dry windy areas, crops, moving to Wanaka) or getting zinc into them (zinc does nothing after the liver is damaged). If you want to know what is going on in your paddocks, bring in some grass samples for us to test – 50-60g of grass (half a bread bag full) cut from as close to the ground as you can without picking up dirt. Who else likes warm and wet weather? Our old friend Lucilia cuprina – the Aussie Green

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Blow˜ y. Flies don’t like wind and dry weather. But a bit of wet wool when it is still over 12C overnight – that’s Lucilia’s idea of heaven. By heaven I mean laying lots of eggs which will turn into lots of maggots which will eat lots of sheep. There are di˛ erent ˜ avours of ˜ ystrike prevention. Like drenches, don’t just look at the brand name but put your glasses on and look at which chemical it contains. If you think Facial Eczema is bad for making sheep not get in lamb, ˜ ystrike is worse. Talk to your vet about which chemicals are the best to use, and we do dispense small quantities for lifestyle block owners with only a couple of sheep. So if I haven’t done anything else, I might have made you feel a bit better about drought! My last word - every millimetre of rain is something to celebrate, and you’re never too old to jump in puddles!

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MARCH EDITION

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OUTLOOK RURAL

WAIRARAPA

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Thursday, March 26, 2020 Wairarapa Times-Age

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Thursday, March 26, 2020 Wairarapa Times-Age

W AIR AR APA

RURAL OUTLOOK

MARCH EDITION

QUIET RURAL REAL ESTATE MARKET IN THE WAIRARAPA

A lack of listings is one of the most noticeable features of the Wairarapa rural real estate market as we head into autumn. There are very few sheep & beef farms - or dairy farms for that matter - being listed at present, notes real estate agent Tim Falloon, of One Agency in Masterton. This has been the case for many months. Tim suspects that for sheep & beef farmers there is not a lot of incentive to sell when they are enjoying good lamb prices. Meanwhile dairy farms are struggling with a lot of debt. The lack of willingness by the major banks to lend money to the agricultural industry is having an e˜ ect, Tim says. “Banks are trying to pull back their exposure a bit to the rural sector and that’s not helping farm sales, that’s for sure.” Data released by the Real Estate Institute of New Zealand (REINZ) shows there were 57 less

farm sales (-13.6%) for the three months ended January 2020 than for the three months ended January 2019. Overall, there were 363 farm sales in the three months ended January 2020, compared to 345 farm sales for the three months ended December 2019, an increase of 5.2%, and 420 farm sales for the three months ended January 2019. One thousand two hundred and seventy-seven farms were sold in the year to January 2020, 14.7% fewer than were sold in the year to January 2019, with 40.3% less dairy farms, 3.9% less Grazing farms, 28.4% less ÿ nishing farms and 9.8% less arable farms sold over the same period. The median price per hectare for all farms sold in the three months to January 2020 was $21,221 compared to $27,087 recorded for three months ended January 2019 - down 21.7%. The median price per hectare fell 7.7% compared to

“

IN THE WAIRARAPA, FOR THE THREE MONTHS TO JANUARY 2020, THERE WERE STRONG PRICES FOR TWO SMALL FINISHING BLOCKS BUT NO ACTIVITY IN ANY OTHER CATEGORY.”

December 2019. Numerous issues continue to impact the rural sector, says Brian Peacocke, Rural Spokesman at REINZ, “with the well-publicised restrictions emanating from some members of the banking sector now being trumped by market restrictions resulting from coronavirus to shortage of killing space at a critical time of the year to the onset of extraordinarily dry conditions bordering on drought throughout the North Island and the top of the South.” In the Wairarapa, for the three months to January 2020, there were strong prices for two small ÿ nishing blocks but no activity in any other category. However, there has been more activity in lifestyle properties.

Nationally, the number of lifestyle properties sold fell over the three months to January 2020 but prices remained buoyant. The median price for all lifestyle properties sold in the three months to January 2020 was $725,500, up $35,500 compared to the three months ended January 2019 for a 5.1% increase. Brian Peacocke notes that lifestyle properties in the south Wairarapa remain resilient, recording a slight increase in the median price. Tim Falloon agrees that the lifestyle market in the Wairarapa remains pretty strong, especially for properties that are closer to Wellington, making them an easier commute. But listings are quite tight at the moment.

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BEEF & LAMB POSTPONES EVENTS

Beef & Lamb NZ is postponing all events for the present. “It is paramount we protect our food producers and the rest of the red meat supply chain to keep this crucial part of the New Zealand economy going,” it says. “Ours is one of the industries that has so far been able to continue, and it is vital for our farmers and all New Zealanders that we take all measures to protect our second largest export sector and largest manufacturing employer. “We are conscious, for example, that if a farmer gets infected, they will have few options for getting assistance on their farm. “We will be increasing other ways that farmers can stay in touch with each other and get the tools and information needed: such as social media; potential delivery of workshops online; webinars; and emails.” Beef & Lamb NZ encourages farmers to reach out to their neighbours and discuss ways they could support each other, if for example, someone were to become sick or need to self-isolate.

It suggests contractors and visitors only enter your farm by pre-phone approval IF you have not got symptoms and have not travelled overseas. Federated Farmers (www.fedfarm.org.nz) suggests employers: • Ensure you meet your obligations under the HSWA to mitigate health and safety risks and protect their workers from them, so far as is reasonably practicable. • Develop a plan with your employees for likely scenarios in respect to COVID-19 in your workplace. • If an employee is sick with COVID-19, ensure they do not pose a threat to other employees. • If an employee can not work or is required to self isolate, work with them on matters like working from home, sick leave and special leave, in line with individual employment agreements. • Consider the type of work an employee is undertaking, including whether sta˜ can isolate themselves or work on their own, safely.

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ABOVE AVERAGE TEMPERATURES, NORMAL RAINFALL AND SOIL MOISTURE PREDICTED FOR WAIRARAPA Warmer than average ocean waters in the Coral Sea and west-central Paciÿ c Ocean are expected to have an in˛ uence on New Zealand’s climate during March to May, according to NIWA. Northerly air ˛ ows could bring an increase in humidity, moisture, and rainfall to New Zealand, it says in its “Seasonal climate outlook March May 2020.” New Zealand’s air temperatures are expected to be pushed in a warmer direction by above average sea surface temperatures near the North Island and in the Tasman Sea over the upcoming three months. Temperatures are most likely to be above average in the North Island, while rainfall is expected to be near normal. Air temperatures are most

likely to be above average (50-55% chance) in the North Island. During periodic northeasterly quarter air ˛ ow patterns, the country will be exposed to moist and humid conditions from the sub-tropics. This may be associated with heavy rainfall events. Soil moisture and river ˛ ows are about equally likely to be near normal or below normal in the east of the North Island (35-40% chance). For Gisborne, Hawke’s Bay and the Wairarapa NIWA says temperatures are most likely to be above average (50% chance), rainfall totals are most likely to be near normal (45% chance), and soil moisture levels and river ˛ ows are about equally likely to be near normal (40% chance) or below normal (35% chance).

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Thursday, March 26, 2020 Wairarapa Times-Age

CONSTRUCTED WETLAND TRIAL

A Wairarapa trial to measure the e˜ ectiveness of a constructed wetland in reducing nutrient loss and enhancing biodiversity is reaching a milestone this year. The trial at Kaiwaiwai Dairies near Lake Wairarapa has proven that a constructed wetland can reduce farm nitrogen losses by over 10 per cent, as well as providing other beneÿ ts. In September 2014, 0.75 ha of rushes and pasture was converted to a wetland as part of the Fresh Start initiative of the Ministry for the Environment. The project has been administered by Sustainable Wairarapa with shared funding at di˜ erent stages from the Ministry of Primary Industry, DairyNZ, Greater Wellington Regional Council and Landcorp. The trial has been brought to fruition by Groundtruth Ltd, a New Zealand company using science, technology and community engagement in innovative ways to enhance the management of ecosystems and productive landscapes. The wetland was constructed as three side-by-side “cells”, collecting water from a permanently ˛ owing peat drain, from around 50 hectares of farmland. The water ˛ ows from one cell into the next and ÿ nally back into the same drain, eventually making

Lifting the net in a farm drain its way into Lake Wairarapa. Natural wetlands were a common feature of the Ruamahanga River basin prior to European settlement. They provided a system for cleaning water on its way to Lake Wairarapa by removing sediment and some dissolved nutrients. Most of the wetlands have been drained and few now remain on farms, but the sediment and dissolved nutrients remain. Instead, pipe and open drains carry water away from the soil when it is saturated. The drainage water typically has elevated levels of Nitrate-Nitrogen

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(NO3-N) caused by urine patches from sheep and cattle. NO3-N is an important plant fertiliser, but it is highly soluble and leaches through soils, particularly after heavy rainfall. Dairy cows deposit large quantities of urine on to pasture, equating to 700 to 1000 kg N/ha under a urine patch. Reducing nitrogen in the feed and/or removing cows from grazing when the soil is wet reduces the risk to waterways. However these options are not always available, practical or economic. However, the constructed

wetland at Kaiwaiwai Dairies has shown that a well-designed wetland can signiÿ cantly reduce farm loss of nitrogen. The hard work is done by the microbes that live in the anaerobic environment at the bottom of the wetland, converting the nitrogen into nitrogen gas. Monthly water sampling has been done at Kaiwaiwai wetland since January 2015. On average, 665kg of nitrogen is removed from the total farm output of 6024 per year. So the wetland e˜ ectively reduces nitrogen loss from the farm by more than 10 per

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cent, which is higher than most constructed wetlands in New Zealand, according to NIWA. Results for total phosphorus were similar in that 14.3 per cent was removed, again above the 10 per cent removal normally expected. In summer, when heat makes the microbes more active, the results were even better. Data from monthly monitoring showed in summer all nitrate was removed from the incoming drainage water. Over the ÿ rst three summer months, on average the ÿ rst

wetland cell removed 52 per cent of the nitrate from the drainage water. The second removed 22 per cent and the third 26 per cent. A “bio blitz” was carried out in May 2018 to evaluate the increased biodiversity provided by a constructed wetland as compared with the neighbouring pasture. It found 160 species across both sides. There were 136 species on the wetland and 60 species on the paddock site. A number of species, particularly invertebrates, have yet to be identiÿ ed. The ÿ shing found both long and short ÿ n tuna eels, the long

ÿ n being classiÿ ed as at risk and declining by the Department of Conservation. Sustainable Wairarapa has published a guide on constructing a wetland, advising farmers to choose a “wet” area, usually dominated by rushes. Pasture production is relatively poor in these wet areas, and they are often the most expensive areas to drain on the farm. Alternatively farmers could construct a wetland at the bottom end of a farm drainage system, either where a permanent waterway exits the property or even at the end of a tile

MARCH EDITION

OUTLOOK RURAL

The wetland at Kaiwaiwai Dairies

drainage system. The guide says to avoid areas prone to ° ooding as this will disturb the ecosystem and disrupt nitrogen removal. A wetland that has water ° owing into it all year round provides the best results and the bigger the wetland, the more e˛ ective it is. As long as the water directed through the wetland eventually ° ows back into the original waterway, a resource consent is not normally required. Groundtruth director John-Paul Praat points out that a constructed wetland is only an option for some farms in the Wairarapa, usually on the plain but sometimes in hill country too. He adds that it is a “hands-on” project and fortunately one of the owners of Kaiwaiwai Dairies Ltd, Vern Brasell, has been very active in getting the best out of the wetland. “Establishing and maintaining the wetland has been a real team e˛ ort.” The current funding comes to an end in July this year. Some monitoring and data collection will continue with the support of GWRC and DairyNZ and the project team is hopeful further funding can be found to further study and hopefully replicate the beneÿ ts found at Kaiwaiwai.

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OUTLOOK RURAL

WAIRARAPA

MARCH EDITION

ALTERNATIVE CROPS PROGRAMME

They say it is an ill wind that blows provide them with food early in no good, and this applies to the the season before manuka starts recently lifted ban on growing ˛ owering. peas in the Wairarapa. “We got some fantastic The ban revealed the ˛ owering crops,” says Ivan, “but vulnerability of Wairarapa crop that didn’t lead to anything as farmers to unpredictable events. there wasn’t the interest from The need for diversiÿ cation apiarists to pay for the service. sparked the trial of a variety of “In saying that, we learned a alternative crops with the harvest lot from the project that will be of one of them about to be tested useful for introducing cover crops by artisan bakers around the in our systems to improve soil lower North Island. quality.” Eradicating pea weevils in the The programme also trialled Wairarapa is a real success story, red and white lentils to meet the says Ivan Lawrie, General Manager increasing consumer demand for Business & Operations at the plant-based protein. Foundation for Arable There were problems with Research (FAR), who the establishment of was involved in that the crops, especially process from the as beginning. niche crops For the past like lentils two years have limited FAR has been herbicide involved with options. the programme For lentils to Alternative Crops be an economic for the Wairarapa cropping option, with funding from the Ivan Lawrie with crop of yields would need to be Ministry for Primary irrigated durum wheat well above those of the Industries. trial, Ivan says. near Carterton Initially eight di° erent “We could grow these crops were investigated, although in the Wairarapa but the demand not all of them were grown is not strong and they are not a successfully. high value product competing One early and novel idea was with cheap imports.” to grow annual legume species Spelt, also trialled, is a niche as ˛ owering crops for bees, to cereal, often used in baked

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goods. With changes in consumer demands towards ancient grains in baked goods it has been identiÿ ed as a possible cropping option. The problem with this crop is that the available varieties need to be planted in autumn but in the Wairarapa the winters are too wet for most growers, says Ivan. Also trialled was high grade milling wheat which currently is not commonly grown in the Wairarapa.

The Arable Food Industry Council (AFIC) has recently set a goal of milling wheat selfsu˝ ciency in New Zealand by 2025. This is an ambitious target, requiring an estimated increase of 25,000-30,000 ha in production area. In light of this, high grade milling wheat is seen as an option worth exploring further in the Wairarapa. Ivan notes that Wairarapa company Breadcraft wants to

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results are very pleasing!” already being available. Now it is the turn of lower North The bigger issue is that the crops Island bakers to see what they can trialled need to o° er very good come up with, including some in returns to be competitive and the Wairarapa. markets need to be developed. “We turned the For this reason, wheat into 20kg Ivan expects bags of ˛ our and Wairarapa crop THE PEA WEEVIL have distributed farmers to return SHOWED HOW these to artisan to growing peas VULNERABLE bakers and pizza as they are a WAIRARAPA makers to get their ÿ nancially viable CROP FARMERS feedback and see option. But he if there is a general doesn’t see the ARE WHEN ONE enthusiasm for the trials as a waste of THING UPSETS THE crop. WHOLE INDUSTRY.” time. “We have “Most growers not been too will go back to prescriptive. There peas again but that are multiple applications, cous doesn’t fulÿ l the whole rotation. cous, ˛ at bread, pasta, and it They need other crops.” works very well as a component There is an interest among of artisan bread. It is a chance for some growers to try out other them to let their imagination ˛ ow.” crops such as sun˛ owers and Simultaneously, FAR is working buckwheat, he says. on the agronomy of the crop to “Some growers are more ensure yield and quality can make adventurous and keen to give it competitive. these a go.” Summing up, Ivan says most of Eradicating the pea weevil has the crops trialled can grow well in been a major success, Ivan says. the Wairarapa. “It’s a good story of collaboration There are issues around between growers, contractors, the infrastructure such as storage, industry and government. although these can be But he expects the search for overcome by farmers working alternatives to carry on. collaboratively. “The pea weevil showed how And for cereals, the Wairarapa vulnerable Wairarapa crop farmers has the advantage of a lot of are when one thing upsets the knowledge and infrastructure whole industry.”

“

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source all of its milling ˛ our from New Zealand. Milling wheat yields in Wairarapa have the potential to be as good as other regions, says Ivan. “It is a question of testing the right varieties that adapt to the region and meet the quality requirements of the industry.” Durum wheat is a cereal with a niche market, producing high quality semolina ideal for pasta making and other specialty uses. The yields in Year 1 were less than hoped for due to low plant density, but the quality was

“fantastic”, says Ivan. “The harvested crop was of excellent quality. It was processed through a stone mill in Canterbury, producing a whole durum wheat ˛ our sample which is of appealing colour and characteristics for artisan baking and potentially for fresh and dry pasta.” There is no better way of putting a product to the test than actually using it to cook and tasting the results, says Ivan. “FAR sta° had a go at pasta, pizza, and other recipes and the

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MARCH EDITION

A MOMENT WITH JOHNIE MCFADZEAN OF MCFADZEAN CATTLE COMPANY

What is your impression on the markets at present and do you feel optimistic? The situation is changing on a daily basis. In running your business, what are the sorts of things that are weighing most heavily on your mind at the moment? Coronavirus, Drought, and proposed water plans, the long term economic consequences in

New Zealand when good meat producing farm land turns into pine trees.

meat diet. By the age of 11-13 the latter children were ahead intellectually.

What areas are you feeling positive about? The fact that people around the world are recognizing the health beneÿ ts of red meat. For example, the Taiwanese have compared children raised on a vegetarian diet versus children on a balanced red

I assume you know other local sheep & beef farmers. What sort of mood is there amongst them at the moment? Concerns over covid-19 and the e° ect it will have on the markets, and what is turning out to be a severe drought.

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Tractor and farm machinery sales were down on 2019 compared to 2018 but hopefully 2020 will see previously deferred purchase decisions realised, says Tractor and Machinery Association (TAMA) president John Tulloch. TAMA statistics showed that during 2019, overall machinery sales were 4382 units compared to 4531 of all types sold in 2018. Mr Tulloch said as these units included everything from $1000 sprayers through $500,000 harvesters, it was more useful for meaningful comparisons to focus on the key machinery areas of grass and forage harvesting. These sales were 1787 units in 2018 compared to 1665 units last year: a decline of about 6.8%. In turn there were 4007 tractor sales in 2019 compared to 4640 in 2018, a drop of 13.6%. “Anything over 4000 tractor units is still a respectable result and showed we had a pretty

solid year. And certainly within the machinery sector, we had a better year than many were expecting considering the conditions.” These conditions included uncertainties around government policy on water quality and emissions plus challenges in obtaining ÿ nance as banks beefed up their equity reserves. 2020 is also shaping up to be another year of uncertainty with the unknown e˜ ects of the coronavirus and a general election. COVID19 could a˜ ect buyer conÿ dence and there may be some impact on sourcing

Tractor and Machinery Association (TAMA) president John Tulloch

preferred supplier. But only time will tell.” Mr Tulloch said the North Island drought conditions would have an e˜ ect on farmers although contractors might have a good season as feed reserves have been used up, requiring restocking. Farmers in Westland, Southland and Otago were also su˜ ering

Farmers and contractors are going to have to decide whether to make new purchases or invest in maintenance of their existing machines components from China although this had not yet occurred. “We just don’t know the actual impact yet. It could end up

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after a wet, cold spring followed by summer ° ooding. “The reduction in value of dairy company shares is also suppressing the mood and sentiment of dairy farmers even though the predicted payout of $7+ is still quite positive.” With all these factors it was hard to forecast how the tractor and farm machinery industry would fare by year end, he said. “I would like to think that this coming season might give us a slight increase because some farmers and contractors have deferred purchasing so there’s some pent-up demand to realise. “Many are saying ‘let’s wait and see’ but by the time they decide it could be too late to purchase in 2020. “Factory lead times are becoming longer as the machinery becomes more complex and technical. People need to order much earlier now to ensure their order can be imported in time so it’s important they make the buying decision sooner not later.” Speaking last week, Mr Tulloch said in the Wairarapa farmers have probably been budgeting for the impact of the current climate conditions. However, another signiÿ cant other event over the past couple of weeks - the fall in the value of the New Zealand dollar versus other countries - is going to put pressure on tractor and machinery suppliers to increase

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may change for the better in six their prices. “Most tractors and machinery months, but we just don’t know.” come from northern European In lieu of buying something countries like Germany, Britain, new, another option is to spend and France. more money on parts and “In a time of crisis, those servicing over winter, he says. countries’ currencies strengthen “However, machines do wear as they are out and the perceived to last thing you be more safer want is for ASK IF THERE whereas New your tractor or Zealand’s IS SOMETHING machinery to currency is small ALREADY IN break down in and seen to be STOCK THAT the middle of less safe.” the busy season, WOULD DO THE This means which will cost JOB AND AT distributors will you money PRESENT PRICES. likely need to and cause you THAT COULD BE increase their grief with your A BETTER PRICE prices, say Mr customers if you THAN LATER ON.” Tulloch. are a contractor. “They could “Contractors choose to may choose to manage the loss hold o˜ on their next purchases instead. That will depend on but they have a list of what they them and how they choose to want to buy next for a very good operate.” reason.” There is also the question But every cloud has a silver of how much lenders are lining and in this case, the New prepared to lend to farmers and Zealand dollar going down contractors, which will vary from means returns from exports will borrower to borrower, and what go up with the extra money sort of interest rate they apply going directly to farmers and which again varies from one their bottom line. business to another. Mr Tulloch suggests that where Given the situation Mr Tulloch possible, farmers and contractors suggests farmers and contractors conduct business as usual but be “ask if there is something already careful and responsible. in stock that would do the job “The last thing we want to see and at present prices. That could is the economy implode, and if be a better price than later on. we all stay at home, the whole It depends a little bit on how long the crisis goes on for. Things system will shut down.”

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NOT ALL DOOM AND GLOOM FOR FORESTRY BUT IT IS TOUGH! Despite the impact of Covid-19 on the world’s economies, Stuart Orme, land use consultant with Forest360 in Masterton, is optimistic about the long-term future demand and proÿ tability for New Zealand’s plantation forests. He notes that China currently has an inventory of seven million cubic metres of harvested logs, almost double the usual

levels, with fewer logs leaving their stockpiles as their economy restarts after shutting down. It will take some time for that surplus to be reduced and ° ows to return to near normal but perhaps somewhat perversely, NZD returns are actually close to long run averages with a weaker New Zealand dollar. It is current demand

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A SIGNIFICANT UPSIDE IS THE CURRENT REDUCTION IN SHIPPING RATES DUE TO REDUCED GLOBAL DEMAND AND FUEL COSTS AND A LOWER NEW ZEALAND DOLLAR. from New Zealand mills, which make up a signiÿ cant percentage of the regional market that are currently underpinning harvest operations. Timber from these mills is largely consumed domestically. The bulk of our processed timber exports go to Australia and developed Asian countries which will recover with time, including China as long as these supply chains continue to operate. A signiÿ cant upside is the current reduction in shipping rates due to reduced global demand and fuel costs and a lower New Zealand dollar. While these factors may not lift demand, they do reduce costs and provide increased grower returns.

This was the case some years ago and is what helped push returns to growers higher after the last big hit in mid-2015. That said, “everything has changed and will not be quite the same again,” Stuart says. “I’m not convinced it will be over in a couple of months.” In the meantime, Stuart believes the raft of actions announced by the government last week to combat the impact of Covid-19 will go some way to supporting many hit hard by reduced hours or complete stand down for those companies that qualify. Speciÿ cally, the wage subsidies that will be available for businesses in all parts of the country that can show they've had a 30 percent decline

in revenue for any month between January and June 2020 compared to the year before. In the meantime, from a forest perspective, there is no urgency to harvest trees that may have been planned to be chopped down soon. They can continue to grow into perpetuity. While radiata pine tends to be harvested around the age of 25 to 30 years, the species can easily be left to grow for a good 70 years or so and still be commercially viable. Stuart noted that the company’s Harvesting division is working hard to ensure work for contractors where they can where acceptable returns to forest owners exist and that the Land Use and Silvicultural side of Forest360 are still busy preparing for upcoming planting on many farms and forests in the country, helping farmer’s apply for 1 BT grants to plant trees on farms and in the climate mitigation space with carbon related work.

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