Choosing land for planting for profit
, July 2005.
NZFFA Information leaflet No. 1 (2005).
Many of the people interested in planting trees for profit are farmers who already own the land and wish to diversify their income or capital assets in future. However, increasing numbers of tree planters are not farmers, but people who want to create a valuable asset by planting trees. The following is aimed principally at those who want to buy land for forestry, but much of it applies equally well to those who already own land and want to choose the best sites for planting.
How far is the site from the nearest port, or processing plant with ready access to export facilities? Long distance transport is costly and has a major impact on profitability. Transport costs for sites that are more than 100km from the market can seriously erode returns for logs.
How close is the site to a public road and is there legal access? Getting logs from the site to a public road requires good reliable access for logging trucks.
Roading to a suitable standard can be very expensive, particularly if the costs have to be met from only a small block of trees. If access would require upgrading, make sure the site is sufficiently large to bear the cost without seriously affecting profitability. The quality of access can also impinge quite significantly on silvicultural costs (site preparation, planting, releasing, pruning and thinning). If access is by right-of-way or paper road, ensure that there are no impediments to using that access.
Is the site flat, rolling or steep hill country? Steep topography not only increases silvicultural costs and preclude a production thinning, but can have a major impact on harvesting costs. If tracking is required for harvesting machinery, this will affect profitability, and if harvesting has to be by hauler rather than ground transport, costs will be even greater. Make sure that the drainage of flatter areas is naturally good enough for satisfactory tree growth, because there are no commercial species that will grow on poorly drained sites, and artificial drainage is usually expensive. Be aware that in cool climates, flat areas may be frost flats where it is difficult to get trees established.
Is the site covered by scrub or fern which needs to be removed before the site can be planted? Woody weeds can be expensive to remove or control, and if weeds like gorse and broom are not brought under control, they will affect the growth of trees and increase silvicultural costs.
Is the climate suitable for the species you wish to grow? Radiata pine is the principal commercial species and will grow on a wide variety of sites, but on cold, dry or exposed sites growth is slow and profitability may be seriously affected. Douglas-fir is more suitable for cold or snow-prone sites, but requires a good reliable rainfall to be profitable, and form can be badly affected on frost flats or exposed situations. Other species like cypresses and eucalypts will only grow well where they are not subject to serious water stress.
Site characteristics can affect both the quantity and quality of the wood produced. Deep, well-drained moisture-retentive sites of high fertility with good shelter are capable of high volume growth but wood quality and stem form are inferior and management is more difficult. Such sites are also of most value to farming. Sites of lower fertility produce less volume, but wood quality and tree form are better. Some low quality sites can be upgraded by adding fertiliser, but others (sands, and soils with low cation exchange capacity) are incapable of much improvement. Shallow soils are incapable of supporting high volumes/ha.
What are the likely risks to the growing stands? Animals, both wild and domestic can be a problem, and may need to be brought and kept under control at some cost. In cooler climates, some sites are prone to periodic snow damage, making profitable forestry very risky. Windthrow can ruin profitability, and is a particular risk where soils are shallow or seasonally wet, or the climate is windy.
Trees placed under stress by occasional droughts are especially susceptible to insect pests and diseases. In particular, macrocarpa is much more prone to canker, and Douglas-fir to needle-cast under such conditions.
Fire is an ever-present danger, especially in climates prone to drought, but risk can be minimised by avoiding sites adjacent to scrubland, fernland or other exotic forests. Although plantings should be consolidated into reasonable size blocks if possible (dozens of ha), if planning a major afforestation, consider planting in several locations to minimise the risk of fire or major climatic damage.
Are there any legal constraints on the title or local authority regulations that are likely to affect the profitability of growing trees?. When buying land, check to ensure that previous owners have no registered interests against the title, and make sure you are aware of any easements pertaining to the property, including powerline easements. Check that boundary fences follow the legal boundaries.
Forest activities such as roading or vegetation clearance, may require Resource Consents from Regional and District Councils under the provisions of the Resource Management Act 1991, and getting these consents may be costly.
Check the local District Plan to ensure that you can meet all the rules without incurring major costs. Check to see whether there is any likelihood of any archaeological sites on the property.
Even if you plan to do all the preparation and silviculture yourself, it is sensible to employ a reputable consultant before you commit yourself to any expenditure, because such a consultant may help you avoid pitfalls that you had not foreseen. In particular, consultants are aware of the many difficulties that can arise at the time of harvesting, and even if you have done everything else right in growing the trees, excess harvesting costs can seriously reduce the potential profitability of the whole enterprise.