Post from Rhod Lloyd on June 23, 2018 at 5:19pm
Is there a case for timely pruning?
From New Zealand Tree grower May 2018
Tenco is one of New Zealand’s largest exporters of forest products. We have built to this position since 1991 when the company was set up to export lumber to growing Asian export markets. Experience and reputation count; from small beginnings Tenco has become the largest independent exporter of New Zealand lumber and New Zealand’s 4th largest log exporter. Tenco has a regular shipping program of their own log vessels and in combination with these and other ships currently calls at 7 New Zealand ports (5 North Island and 2 South Island).
Tenco buys standing forests. Tenco currently has a number of forests which they purchased at harvestable age to log over a number of years for export and domestic markets. Tenco also regularly buys smaller tracts of forest to harvest immediately or immature forests to hold until harvest time. Tenco is interested in broadening the base of owners from whom it purchases forests and stands of trees. A deal with Tenco is a certain transaction. The owner and Tenco will agree on a value of the tree crop and then Tenco will pay this amount to the owner either in a lump sum amount or on rate per volume unit out-turn from the forest depending on the nature of the tree crop.
Tenco knows there are a lot of farmers who have trees that are close or ready to harvest and will be asking themselves how they should proceed with the sale of their trees. For some farmers the kind of certain transaction with money in the bank could well be appealing. Tenco is actively interested in buying harvestable forests or trees from areas including all the North Island (except the Gisborne and East Coast districts) and Nelson & Marlborough in the South Island .
If you own a forest in this area (16 years and older) and are ready to enter into this kind of agreement Tenco is interested to develop something with you.
Please contact: Josh.Bannan@tenco.co.nz
Work: +64 7 357 5356 Mobile: +64 21 921 595 www.tenco.co.nz
Two principles have emerged from a lifetime of plantation management research −
- That the size and the quality of trees at harvest are determined by the decisions at the time of planting such as site, species, genetics and spacing, and stand management in the first few years such as thinning and pruning.
- Log and tree returns at harvest are determined not by log and tree values at the time of early management decisions but by the price which exists on the day of harvest.
For sawlogs there are at least two decades between the time of early management decisions and that of the final harvest. To enhance the quality of the butt log, timely early pruning has been advocated, However, this increases management costs. Selective pruning − pruning only some of the final crop trees − is not feasible as on average, selected pruned trees tend to be soon overtaken by their unpruned neighbours.
In a recent article in the NZ Journal of Forestry, Tombleson quotes estimates that to compensate for the cost of pruning and the volume loss per hectare as a result of pruning, pruned logs at felling should command premiums of at least $80 a cubic metre. Current premiums for pruned logs are only about half this estimate.
For this reason, two of the largest plantation owners in the central North Island have generally decided not to prune. No other radiata growing country is effectively pruning on a large scale. Clear defect-free radiata is one of the best softwoods in the world, the equivalent of Ponderosa pine clears. The present competition for clearwood comes mostly from unsustainable old growth tropical trees. When harvested in 20 to 25 years time radiata pruned logs should be in considerable demand as there will be less international competition.
By concentrating simply on current log sale values, New Zealand could be seriously under-estimating the benefits of pruning. Certainly, the current premiums for pruned logs are lower than most growers or investors expected as well as being less than the compounded cost of pruning, but the downstream added value benefits are generally ignored.
Because of the possibility of pruned logs becoming sap-stained during sea transport, pruned logs are best processed in this country. Tombleson estimates that 12 plants in the central North Island process 1.226 million cubic metres of pruned logs a year, employ 1,575 staff and have an annual turnover of $734 million. These returns work out at $586 per cubic metre. This is an added value multiplier of more than three times the return that growers receive from supplying the domestic and export pruned log market, or over four times the returns for the best unpruned log exports.
I presume the central North Island forest owners have researched where future clearwood supplies will come from globally and have concluded that in the future, pruned logs could not command a $80 to $100 a cubic metre premium. The overseas forest owners appear to be most interested in reducing growing costs.They also appear to have little or no interest in downstream domestic processing.
Is there a case for timely pruning? Yes, there is.