26 FEATURE SUPPLEMENT
Thursday, April 21, 2022 Wairarapa Times-Age
FEATURE SUPPLEMENT 27
www.age.co.nz Thursday, April 21, 2022
FORESTRY IN WAIRARAPA Dynamic Forest Sector – It’s never boring Export log prices are conforming to the ‘constant change’ part of a dynamic system very well as illustrated in the graph below. This year we have seen export prices jump from $115/JAS (A grade) in January to $142/JAS in February now back to $123/ JAS in March. With a cost base of around $90/JAS in many regions, you’re looking at swings of 80-100% in net return to forest owners within a 3-month period. Much of this swing is around shipping cost increases since Putin started lobbing missiles at his neighbour. Actual CFR prices (sales price in China in $US) are reasonably strong in the mid $US170’s/JAS but foreign exchange and shipping costs have closed the bar early and taken the fun out of the party. While it appears that the upward pressure on shipping prices has abated, the China log demand has come o˝ the boil from around 80kJAS/day into the high 50kJAS/day. This reduction in demand can be contributed to several reasons but principally a slowing
construction sector and covid related shutdowns in sawmills and construction sites. Inmarket Chinese log inventory is in the 4.5Mm3 region which is a reduction from February, but this is likely to increase as NZ supply has strengthened following the March price increases – remembering it takes round 5 weeks from stump to market. While China holds tight with it’s covid elimination strategy (we all know how a˝ ective that is) we will likely see subdued demand and increased port waiting times as ports are shut without notice – dynamic. I have ÿ elded plenty of questions from forest owners regarding the impact of Putin’s rampage on the demand for NZ logs and lumber. It will be interesting to see how this plays out as Europe have e˝ ectively stopped any Russian log and lumber imports which will likely re-direct volume into China. Total Russian log/ lumber supply into Europe was in the vicinity of 25Mm3/ annum and should this redirect to China, might displace the
Severe Erosion accelerates with increasing storms
total NZ supply. This is unlikely, as Russia had imposed a log export ban in January this year. Ministers Shaw and Nash have shown how ‘dynamic’ they are by proposing changes to the ETS legislation by removing exotics from being able to be included as permanent forest from January 2023. This is more than likely an attempt to keep Damien O’Connor from going postal as mounting pressure from the Ag sector regarding farm to forest conversions will be giving him the sweats. While the “50 Shades of Greeners” will be feeling rather smug over this proposed change to policy, the reality is that there are plenty of farmers and Iwi landowners that have had the opportunity taken away from them to earn
an income o˝ very marginal land that is otherwise not viable for anything except continued erosion. The latest rain events on the east coast have shown, again, what the future holds for climate change on unsupported hill sides. Government’s idea that indigenous planting will work in these areas is ° awed as the cost of establishment far outweighs any carbon gains in the short to medium term – especially in this marginal country. Anyone that has tried to establish an indigenous forest from green pasture will know that every pest wants to eat it, every spray wants to kill it and even if pests, spray and weeds are kept under control, it wants to die anyway without constant nurture and babysitting.
In summary, there’s plenty going on in our wood-based world. Operationally there’s a few wrinkles with covid and logistics related issues, prices are a crap shoot going forward with global instability and Government policy meddling in the ETS are likely to see reduced ongoing investment in greenÿ elds projects which will likely pull the handbrake on increased carbon related land prices. The production forestry investors are rubbing their hands together so it’s not likely to see a slowing of farm conversions any time soon. So, lets raise a glass to being a dynamic industry, one thing’s for sure – it’s never boring. Marcus Musson Director Forest360
"Loss of productive land through erosion has a signiÿ cant impact on the environment, economy and local communities. So, while we can’t prevent storms and ° oods happening, we can help mitigate against the impacts on people and livelihoods from slips and erosion, in particular by planting trees," says Alex Wilson, grants and partnerships director, Forest Development, at Te Uru R˛k au – New Zealand Forest Service. Alex Wilson says erosion and its e˝ ects in hill country areas alone are estimated to cost New Zealand's economy $250 million to $350 million a year. "Taking steps to reducing erosion in the upper areas of a catchment is much more cost e˝ ective than putting in ° oodcontrol structures in the lower areas and cleaning up after a ° ood. Te Uru R˛k au – New Zealand Forest Service works to protect farmland from storm damage by supporting farmers to plant trees to stabilise land, re-establish vegetation, or retire their most vulnerable areas.” "Not only does this work retain productive soils on farms, it also reduces sediment entering waterways and potential downstream damage. It is particularly important to build on-farm resilience now in the
(ECFP) was established in 1992," Alex Wilson says. "Since that time, ECFP has partnered with Gisborne District Council to assist landowners in the planting or retirement of over 45,000ha of the most erodible land features in Gisborne. "While this is a signiÿ cant improvement, work still continues to reduce the impacts of erosion on the district; impacts most acutely felt by farmers and rural communities during heavy weather events, like the recent downpours on the east coast."
Severe farm erosion in Wairoa April 2022
face of a changing climate,” Alex Wilson says. The Sustainable Land Management Hill Country Erosion Programme is the Government’s primary means of reducing soil loss on private land – through actively partnering with councils. "Establishing partnerships between farmers, councils, and Te Uru R˛k au – New Zealand Forest Service is fundamental to the programme’s success. Since 2007, more than $200
million has been invested in erosion control through the programme. This includes funding from central government, councils, and farmers. We encourage farmers to work with local councils through these voluntary programmes – plan how to best protect the vulnerable parts of your property and get support to take action." Gisborne-Tair˛ whiti is the latest region to su˝ er signiÿ cant storm damage, particularly
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in the township of Tokomaru Bay, which has been cut in half by damage to a bridge on the main highway, and in Wairoa which has seen more storm damage on farms than cyclone Bola from the 1980’s. "Tair˛ whiti has a signiÿ cant proportion of highly erodible land – 3 times higher than in other regions across New Zealand. In recognition of the severe erosion problems in the Tair˛ whiti district the Erosion Control Funding Programme
Evidence of Hill Country Erosion Programme (HCEP) initiatives leading to more sustainable land management can be found in a series of case studies around New Zealand, including in Hawke’s Bay, Manawat˙- Whanganui, Nelson, Waikato, and Greater Wellington. Alex Wilson says the case studies clearly demonstrate how HCEP is funding the right tree in the right place for erosion control, helping to prevent erosion in hilly country, which means less sedimentation ° owing downstream – and better water quality for Kiwis to enjoy. Alex Wilson Te Uru Rakau – The New Zealand Forest Service