Category Archives: Forestry Tasmania

Special Timbers Welfare State

Posted on July 31, 2017 | Leave a comment

TSSMP

A mere 7 years after the last special species management plan was produced by Forestry Tasmania in 2010 comes another attempt at failed forest policy in Tasmania.

http://www.stategrowth.tas.gov.au/forestry/special_species_timber_management_plan

This new Plan will open up 420,000 ha of pristine public native rainforest and oldgrowth for taxpayer funded plundering by the special timbers industry. This includes 225,000 ha of rainforest and oldgrowth in conservation reserves.

The Plan is essentially a help-yourself DIY approach to public forest management, with an Open Season on the last of Tasmania’s rainforest and oldgrowth.

After the Executive Summary the Plan begins by trying to tell us how important the special timbers industry is; total industry employment, total value, etc.

It’s like the Government telling us that Centrelink is a commercial business not welfare.

The Tasmanian Government believes in Welfare State Forestry, even whilst in competition with private tree growers! So profitability, good commercial management and responsible forest management are out the door.

This draft Plan is not a business plan.

This draft special timbers management plan begins with the premise that Tasmania’s last remaining oldgrowth and rainforests exist to be plundered…….at taxpayers expense……for the exclusive benefit of a handful of local woodworkers!

This draft special timbers management plan does not begin with the premise that Tasmania’s premium timbers should be sold into competitive open markets to help fund schools, roads and hospitals.

Nor does the Plan even consider whether these forests are more valuable left untouched.

In 2010 the special timbers industry was formally admitted into Tasmania’s Welfare State. This new draft management plan now takes that Welfare State to a whole new level of plunder, waste and welfare.

The only basis for a successful forest industry is profitable tree growing.

This Plan represents the exact opposite. It’s a disaster for current and potential private blackwood growers.

The draft Plan is open for submissions until 9am Monday 28 August 2017. Submissions can be sent directly to the Department of State Growth by emailing: specialspecies@stategrowth.tas.gov.au

The Plan will become law once it is signed and gazetted by the Minister.

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Posted in 2018 State Election, Commentary, Forestry Tasmania, Management Plan, Politics

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IST Tender Results 2016-17

Posted on July 27, 2017 | 5 comments

ist

http://www.islandspecialtytimbers.com.au

Back in December last year I wrote my first report summarizing all tender results for Island Specialty Timbers given that IST itself provides little market information.

https://blackwoodgrowers.com.au/2016/12/13/island-specialty-timbers-tender-results/

So here is my half yearly update and financial year summary of their tender results.

A separate report looks specifically at IST blackwood tender results, given that blackwood is the only specialty timber species for which this information might have some use for market and investment purposes. No one is going to invest money based on the tender results for the other specialty species, which are too slow growing to allow for profitable investment.

https://blackwoodgrowers.com.au/2017/06/12/ist-blackwood-log-tender-results-2016-17/

Six-monthly update

The last 6 months have seen 4 IST tenders with total volume of 83 cubic metres of specialty timbers put to tender of which 58 cubic metres were sold, and total revenue of $49,100.

Financial year

The 12 months to June 2017 saw IST conduct 8 tenders with total volume of 166 cubic metres of specialty timbers of which 107.5 (64%) cubic metres sold for total revenue of $114,300.

This 166 cubic metres represents about 1% of the annual harvest of special timbers from Tasmania’s public native forests. The rest is sold at Government prices on long term sales contracts.

For harvesting the 166 cubic metres of special timbers in the year Forestry Tasmania received an additional $14,000 from Tasmanian taxpayers as compensation.

Compare this with the 3,000 tonne of specialty timbers auctioned by the Western Australian Forest Products Commission every year:

https://blackwoodgrowers.com.au/2017/05/01/special-timbers-in-western-australia/

IST2017pricechart

The above chart shows the log volumes and average unit prices paid per tender.

The price spike for December 2016 reflects a tender of 7 Huon pine lots.

The highest unit price for the year was a small black heart sassafras log of 0.49 cubic metres that sold for $5,100 per cubic metre!! This is an extraordinary price for such a small log.

The highest total price paid for a log was for a Huon pine log of 1.75 cubic metres that sold for $5,160.

These results show that when subject to competitive forces even the little southern Tasmanian special timbers market can afford to pay very good prices for quality logs.

Three species attracted strong demand and high prices over the year, these being black heart sassafras, huon pine and banksia with average log prices over $1,000 per cubic metre. Celery top pine sold for an average price of $630 per cubic metre. All of these species take 400-1,000+ years to reach maturity so I suspect even these prices are cheap.

Black heart sassafras made up 25% of the successful tendered volume but made up 44% of the sales revenue. Blackwood, the dominant special timber, made up 7% of the successful tendered volume but only 5% of the revenue. Huon pine made up 20% tendered volume and 11% revenue.

Black heart sassafras, blackwood, myrtle and wattle comprised 15%, 24%, 16% and 20% respectively of unsold log volume.

The low volume and variable quality of products tendered by IST makes it difficult to draw conclusions from these results, except to repeat that quality wood is worth big money.

Remember these prices are equivalent to mill door log prices, so harvesting and transport costs are theoretically included in the prices.

And don’t forget these public native forest specialty timbers come to you courteously of an $86.27 per cubic metre direct taxpayer subsidy.

https://blackwoodgrowers.com.au/2016/11/13/special-timbers-subsidised-charade-continues/

Tasmanian taxpayers certainly have abundant generosity (and deep pockets) when it comes to the forest industry.

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Posted in Forestry Tasmania, Island Specialty Timbers, Markets, Prices

IST Blackwood Log Tender Results 2016-17

Posted on June 12, 2017 | Leave a comment

1617logs

In the interests of greater market and price transparency in the forest industry here is my annual summary of blackwood log tender results from Island Specialty Timbers (IST) for the 2016-17 financial year.

http://www.islandspecialtytimbers.com.au

This is the only publically available competitive market price data for blackwood logs.

During the year 20 blackood lots, totalling 20.4 cubic metres, were put to tender over 5 of the 8 tenders held by IST. That equates to 1 single truck load of blackwood material! Of the 20 lots put to tender only 6 were sold, totalling 7.2 cubic metres!

It’s been a quiet year for the local blackwood market.

Last year (2015-16) Forestry Tasmania sold 9,580 cubic metres of blackwood logs and craftwood, with the vast bulk of this volume sold on private long term sales contracts. The tiny volume sold through public tender by IST represents just 0.07% of the blackwood harvested from the Tasmania’s public native forest.

http://www.forestrytas.com.au/about-us/publications

For the August and September 2016 tenders IST put to tender 7 lots comprising pairs of blackwood logs. In the August tender the pairs were logs cut from single trees, whilst in the September tender the pairs were from different trees. All were plain grain logs. Only 2 of the pairs from the August tender sold.

None of the 11 blackwood lots from the September and November 2016 tenders sold!

Then came the March 2017 tender where 2 large blackwood logs from the same tree featuring tear drop grain were put to tender. Total volume for these two logs was 2.59 cubic metres. The larger butt log went for $1575 per cubic metre whilst the smaller head log sold for $1625. Total value for this single blackwood tree totalled $4130!! These logs provided the highlight in an otherwise quiet year.

Actually despite the low volumes sold plain grain blackwood logs didn’t do so bad. The 4 plain grain lots that sold averaged $418 per cubic metre for some reasonable quality logs, with prices up to $550 per cubic metre. I regard that as a good price.

The table below summarises the IST blackwood tender results for the 2016-17 financial year:

IST 2017 BWD summary table

The 20.4 cubic metres of blackwood put to tender compares with the total of 166 cubic metres of specialty timbers that IST put to tender in 2016-17, or only 12% of the total volume. This is despite the fact that blackwood is by far the dominant specialty timber harvested in Tasmania.

The chart below shows the average blackwood tender prices and total volumes for the past 4 years.

IST BWD pricevolume trend

Unfortunately the volume of IST blackwood tender material is too small and the quality too variable to allow meaningful market/price comparisons between years. Also IST generally only caters to the local southern Tasmanian craftwood market.

Large volumes of large, good quality logs from blackwood plantations should generally command better prices than shown by the IST result.

The blackwood market desperately needs more tradability, more transparency and more commercial credibility.

The only basis for a successful forest industry is profitable tree growers within a competitive, transparent marketplace.

Caveats:

  1. Island Specialty Timbers (IST) is an enterprise of Forestry Tasmania established in 1992 to increase the recovery, availability and value of specialty timbers from harvesting activities in State forests.
  2. Forestry Tasmania manages its special timbers operations (including IST) as a taxpayer-funded, non-commercial, non-profit, community service. Last year each cubic metre of blackwood log harvested by Forestry Tasmania received a taxpayer subsidy of $86! No private blackwood grower received any taxpayer subsidy.
  3. Note that all logs and wood sold by IST come from the harvesting of public native old-growth forest and rainforest certified under AFS (PEFC).
  4. It is unlikely that this tiny set of market-based blackwood log prices is representative of the broader blackwood market.
  5. The dataset is too small and variable in quality to allow any analysis or correlations to be made between price and log quality apart from the obvious result that feature-grain logs attract a significant price premium over plain-grain.
  6. These tender prices are effectively mill door prices that already include harvesting and transport costs. They are not stumpage prices.

So whilst Forestry Tasmania, the State government and the State parliament all regard the special timbers industry as a taxpayer-funded community service and political play-thing rather than a commercial opportunity, then blackwood’s commercial future remains difficult.

“The lack of price transparency for forest products, particularly from hardwood forests/plantations [in Australia], represents an impediment to the uptake of farm forestry. Unlike other commodities, price information for forest products is not published through the newspaper or accessible online. Better price transparency is required to encourage smallscale investment in trees” (p. 71. FWPA Report PN: PNA243-1112/2, 2013).

http://www.fwpa.com.au/rd-and-e/market-access/229-the-case-for-renewed-development-in-plantations-identifying-forest-values-and-the-constraints-to-attainment-stage-one-and-two.html

This quote from a recent forest industry report says it all. Even the forest industry recognises price transparency is a major issue, but then does nothing about it. One of the authors of this report was none other than the Director of Forestry Tasmania!

For previous years IST tender reviews see:

https://blackwoodgrowers.com.au/2016/06/23/ist-blackwood-log-tender-results-2015-16/

https://blackwoodgrowers.com.au/2015/06/18/ist-blackwood-sawlog-tender-results-2014-15/

https://blackwoodgrowers.com.au/2014/06/14/blackwood-sawlog-tender-results-2013-14/

 

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Posted in Forestry Tasmania, Island Specialty Timbers, Prices

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Tasmanian Government Response to the Strategic Growth Plan

Posted on May 30, 2017 | Leave a comment

MACSGP2017

http://www.stategrowth.tas.gov.au/__data/assets/pdf_file/0011/149438/Tasmanian_Government_Response_To_Growth_Plan.pdf

The Tasmanian Government has released a statement outlining its response to the forest industry Strategic Growth Plan, which I previously reviewed:

https://blackwoodgrowers.com.au/2017/05/08/a-strategic-growth-plan-for-the-tasmanian-forests-fine-timber-and-wood-fibre-industry/

The Response keeps the focus of forest policy firmly on a public forest resource and a failed, self-declared bankrupt public forest manager.

Any transition to profitable private tree growers is completely out of the question.

Absolutely nothing has changed!

The bulk of the Response is about what the long suffering Tasmanian taxpayer will continue to do for the forest industry.

The continuing wanton waste of taxpayer’s money on the forest industry is beyond belief! The forest industry has access to the Treasury piggy bank like no other industry in Tasmania!

It now appears certain that the Tasmanian taxpayer will take over responsibility for funding the construction and maintenance of all thousands of kilometres of forestry roads on public land. This is a direct contravention of competitive neutrality.

Remember there are private forest growers who receive none of these taxpayer benefits.

Finally on to special timbers discussed on page 4 of the Response.

As part of the continuing forest industry gravy train, the Tasmanian taxpayer is throwing money at a propaganda initiative to tell us about the benefits of continuing to plunder the last of Tasmania’s oldgrowth and rainforests for the benefit of a handful of venerable craftspeople.

Tasmanian Special Timber Woodcraft Sector Community, Market Awareness and Engagement Program Funding

Funding of $115 000 has been provided to the Tasmanian Special Timbers Alliance for the development and implementation of a Tasmanian Special Timber Woodcraft Sector Community, Market Awareness and Engagement Program. This program will support the implementation of the Special Species Management Plan.

It is all so sad, pathetic and predictable.

Forestry in Tasmania continues to be nothing but waste, politics, and conflict.

Many Tasmanians seem more than happy with this outcome.

As a forester I find the situation incomprehensible.

40 years of this nonsense and it just goes on and on….

When will Tasmania get a fully commercial profitable forest industry?

Not in the foreseeable future that is for certain!

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Posted in 2018 State Election, Commentary, Forestry Tasmania, Politics

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A Strategic Growth Plan for the Tasmanian Forests, Fine Timber and Wood Fibre Industry

Posted on May 8, 2017 | 2 comments

MACSGP2017

http://www.stategrowth.tas.gov.au/__data/assets/pdf_file/0004/148855/Strategic_Growth_Plan.PDF (1.3 MB pdf)

The Tasmanian Ministerial Advisory Council on Forestry has finally produced a Strategic Plan for the industry.

Yes another strategic plan for the forest industry!!

Our public library shelves are at breaking point, weighed down by the dozens of these plans, strategies and reviews that have been produced over the past 40 years, all to no avail.

Two issues ensure that the use-by date of this Plan has already expired:

  1. The State Government deliberately excluded non-industry representatives from the Advisory Council. This Plan only represents the interests of a small select group of Tasmanians. It is a 100% political document! This Plan is only as good as the next election if that!
  2. The two most contentious issues of a) public forest management, and b) the future management of Forestry Tasmania, should have been dealt with a separate section within the Plan. Instead these issues are woven through the document, fundamentally compromising the entire Plan. If the forest industry cannot unchain itself from these two issues, and focus on profitable tree growing, then the forest industry is doomed.

If the future of the forest industry is to be based on profitable tree growing then this Plan fails completely!

Reviewing the Plan is therefore an academic/intellectual/painful exercise.

As a forester having read many previous forest industry plans and strategies, reading this Plan is painful and frustrating. Besides the poor structure and legibility, much of the contents are straight out of previous plans I’ve read. There are very few new ideas in this Plan.

The surreality of the Plan is overwhelming, in that the Plan completely ignores the current hostile political, social and economic context of the forest industry.

The Pros

“The future growth potential of private plantations is significant”. This statement on page 6 of the Plan says a lot about the future growth of the forest industry. Unfortunately it is not expanded upon anywhere else in the Plan.

“Government involvement will be as an enabler rather than as a commercial participant.” This statement on page 9 of the Plan is the most curious feature of the Plan. It stands alone with no further detail or explanation of what it might mean. It can be interpreted in a variety of ways.

“It is recommended the Forest Practices Act and the implementation of its provisions be reviewed in keeping with progressive developments in forest practices and science”. A review of the FPA is certainly needed, especially around plantation development and management. Forest plantations should exist within the same regulatory environment as any other primary industry, just like in New Zealand – a level playing field.

“While the industry comprises a diversity of often competing interests and business models, individual stakeholders also share a range of common interests. Within this context, there is a need for an umbrella organisation to develop and represent the shared interests of the whole of the value chain on matters of common concern”. The Plan calls for the formation of a new industry representative body. Private forest growers are the future of the forest industry. They need strong leadership and a strong voice.

That’s it! Four statements in the Plan that I think have some merit and potential. The rest of the Plan is padding or worse.

The Cons

The main con is the absence of non-industry representation on the Advisory Council, making this Plan a 100% political document;

The Plan assumes indefinite ongoing access to taxpayer subsidised public forest resource;

The complete absence of profitable tree growers and profitable tree-growing as the basis of any successful forest industry;

Log pricing is not discussed nor are transparent competitive markets;

The Plan is not a response to a review of the forest industry. Firstly we need a document that lists the major problems and challenges facing the forest industry. Then we need a strategy that addresses those problems and challenges. The logic needs to be transparent – problem, solution, outcome! By itself this document provides the reader with no context by which to judge the strategy, let alone any possible outcomes. I would classify this as a major flaw.

These Plans are always about what the Government can do for the industry, never about what the industry must do for itself; and

Hence always involve spending large amounts of taxpayer money;

Private Forests Tasmania is not mentioned in the Plan!!

The Plan retains the stupid rhetoric about “resource security”. The forest industry does not need “resource security”! The very successful New Zealand forest industry does not talk about resource security, because the NZ industry is based on a private forest resource. “Resource security” in NZ only comes from profitability; either pay a good market price or go out of business! “Resource security” is a forest industry euphemism for loss-making, taxpayer-subsidised, politically protected industry. “Resource security” is anti-competitive and against the principles of competitive neutrality. Private forest growers should not be subject to “resource security” so neither should the public forest grower. In my opinion the word “sustainable” has come to serve the same purpose within the industry. The Plan uses the word “sustainable” ad nauseum whilst the word “profit” appears only once!

The inability of the Strategy to recognise and address issues of competitive neutrality, such as the proposal that the State Government fund forest road construction and maintenance (p. 20). Government money must then also go to private forest growers for road construction and maintenance in order to achieve competitive neutrality!

The section on Meeting Community Expectations (p. 13) is a complete joke, in fact it is laughable.

The section on Special Species Timbers (p. 17) is a joke;

The section on Private Forests (p. 14) is completely inadequate. The objective of private forest growers is profitability. Improving profitability and competitiveness is not discussed in the Plan at all.

I could go on, but the patient is already in the Terminal Ward.

The weaknesses and omissions in this Plan mean that it has already been consigned to the dust bin of history. In 3 years time the Strategic Plan of 2017 will be long forgotten. Yet another failure by the Tasmanian forest industry to reinvent itself.

Another 3 years wasted. More subsidies, more politics, more community conflict can only follow.

PS. Another significant omission from the Plan is the subject of a budget and funding. Of course we all know that the long suffering taxpayer will be asked once again to throw money at the forest industry by way of this Plan, to the tune of $100s millions of dollars. Given the billions of dollars that have been wasted on the forest industry over the past 30 years, taxpayers should be extremely wary of supporting any forest industry plan that does not include significant forest policy and industry reform. This Plan contains very few recommendations for policy and industry reform.

PPS. If the forest industry and the Tasmanian community are serious about the future of the industry then I recommend these two reports as a good place to begin:

Two significant forest industry reports that went nowhere

These reports contain plenty of great recommendations for reform, none of which have ever been implemented.

PPPS.

Speaking of redundant Forestry Growth Plans does anyone remember this one?

Click to access corp_plan_2000.pdf

It’s a complete joke!! By December 2003 ………

Complete cloud cuckoo land stuff. And here we are 14 years later still in cloud cuckoo land. Pathetic!

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Posted in 2018 State Election, Forestry Tasmania, Management Plan, Politics

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Island Specialty Timbers Tender Results

Posted on December 13, 2016 | 2 comments

ist

http://www.islandspecialtytimbers.com.au

For the past three years I’ve been collecting, analysing and reporting blackwood log tender results from Island Specialty Timbers (IST) as, despite the miniscule volumes and generally poor quality, these are the only competitive blackwood log prices that are publically available.

Just for the fun of it I thought I would start collecting and analysing all the tender results. You never know what might turn up!

This data doesn’t have much market value. Besides blackwood, no one is going to invest money based on the tender results for the other specialty species, which are too slow growing to allow for profitable investment.

The best value this data has is to show what the marketplace might pay for premium quality timber. When Tasmanian public native forest oldgrowth and rainforest timbers are no longer available, will the marketplace come to better appreciate farm-grown Tasmanian blackwood?

Forestry Tasmania and the Tasmanian Government consider the management and harvesting of public native forest specialty timbers (including blackwood) as a taxpayer funded community service. So why does Forestry Tasmania/IST put these tiny volumes to tender and publish the results? What is the point?

Forestry Tasmania’s major product Tasmanian Oak has no price or market transparency. Why the need for competitive markets and price transparency for community-service specialty timbers, where there is no competitive markets and price transparency for eucalypt hardwood? It makes no sense!

IST was established ”to increase the recovery, availability and value of specialty timbers from harvesting activities in [Tasmanian] State forests”. Does IST achieve its stated objectives? Does it operate at a profit? We will never know!

Island Specialty Timbers has been operating for 25 years. In that time it has never produced a market report; and only in the last 3 years has Forestry Tasmania included IST sales highlights in its Annual Report.

http://www.forestrytas.com.au/about-us/publications

So far as I’m aware these are the only publically available competitive market log price results available anywhere in Australia!

30 million cubic metres of wood is harvested in Australia every year and all we have are competitive price results for less than 200 cubic metres! Isn’t that extraordinary??

Does the forest industry really want to encourage investment?

isttender-chart

The size and quality of products tendered by IST varies enormously so it is difficult to draw conclusions from these results.

Remember these prices are equivalent to mill door log prices, so harvesting and transport costs are theoretically included in the prices.

All up over the 15 months 210 cubic metres of logs were sold by tender with total revenue of $162,000. An additional $18,100 revenue was received by Forestry Tasmania directly from Tasmanian taxpayers to compensate for the costs of harvesting this 210 cubic metres.

87 cubic metres remained unsold from the tender process. Few of the logs tendered were of premium (Category 4) grade, most of which are sold under private long term sales agreements, including virtually all of the Huon pine.

Five species attract strong demand and high prices, these being black heart sassafras, plain white sassafras, king-billy and huon pine and leatherwood with average log prices over $1,000 per cubic metre. Celery top pine sold for an average price of $530 per cubic metre. All of these species take 400-1,000 years to reach maturity so I suspect even these prices are cheap.

And don’t forget these public native forest specialty timbers come to you courteously of an $86.27 per cubic metre direct taxpayer subsidy.

https://blackwoodgrowers.com.au/2016/11/13/special-timbers-subsidised-charade-continues/

Black heart sassafras and blackwood made up 25% each of the successful tendered volume over this 15 month period, but made up 46% and 6% of the sales revenue respectively. Blackwood comprised 55% of unsold log volume, perhaps suggesting that the local Tasmanian market for plain grain blackwood is saturated. This is not surprising given you can buy plain grain select blackwood timber in Tasmania for the same price as Radiata pine.

https://blackwoodgrowers.com.au/2016/11/12/blackwood-timber-price-list-summary-2016/

The harvesting of specialty timbers from Tasmanian public native forests is neither profitable nor sustainable.

I will provide an update on IST tender results every six months.

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Posted in Forestry Tasmania, Island Specialty Timbers, Markets, Prices

Wish List Revisited

Posted on December 5, 2016 | Leave a comment

Makeawish

The recent Ministerial Statement by Tasmanian Resources Minister Guy Barnett, and the strong negative reaction it provoked from both the community and the forest industry got me thinking about the wish list I wrote last year.

http://www.premier.tas.gov.au/releases/ministerial_statement_-_forestry

So I’ve decided to update my Wish List.

Does Tasmania want a successful forest industry?

If so then here are a few ideas:

  1. Government policy

Tasmanian Government forest policy continues to focus on public native forest, a failed State forest agency, and protecting local jobs at any cost. If we adopted this same thinking for any other primary industry Tasmania would be an economic basket case. Our politicians and large sections of the forest industry and the community still think of the forest industry as a community service, a government employment program.

Sorry guys but it’s the 21st century.

The only basis for a successful modern forest industry is profitable tree growing.

Most wood now grown and sold in Australia comes from private tree growers.

It is time to put the policy focus on profitable private tree growers and away from public native forest and a failed State forest agency.

Implementing the Federal Government’s Farm Forestry National Action Statement 2005 would be a good place to begin.

http://www.agriculture.gov.au/forestry/australias-forests/plantation-farm-forestry/publications/farm_forestry_national_action_statement

 

  1. Government structure

We need to think of forestry as a primary industry and not as a Government-run, politically-driven, taxpayer-funded employment program.

One example of this change would be to move Private Forests Tasmania (PFT) from the Department of State Growth Tasmania to the Department of Primary Industries, Parks, Water and Environment (DPIPWE). At the moment this DPIPWE website contains no mention of forestry at all:

http://dpipwe.tas.gov.au/agriculture

Why isn’t forestry regarded as a primary industry in Tasmania?

Why isn’t Private Forests Tasmania part of DPIPWE?

So that all commercial forest policy and practice is aligned with primary industry policy the Government Minister responsible for PFT/DPIPWE should also be responsible for Forestry Tasmania. Now does that sound logical or what?

  1. Private Forests Tasmania

Following from the above logic Private Forests Tasmania needs to become the dominant Government forest agency, NOT Forestry Tasmania.

  1. Forestry Tasmania

And following on we need to get the politics, conflict and the anti-competitive policies out of the industry. That means either a) completely transforming Forestry Tasmania into an independent, fully commercial, profitable business, or b) shutting down public native forest logging.

  1. Plantations

The future of the forest industry is plantations. And like all primary industries the only basis for a successful forest industry is for (public and private) tree growing to be transparently profitable. The forest industry and the Government need to do everything they can to encourage profitable market-driven plantation investment. No scams!! See below for my comments on forest practices and markets and transparency for two ways to achieve this.

  1. Native forests

If there is any value/profitability at all left in logging Tasmanian native forest it must be pretty marginal. The Tasmanian Oak brand has been pretty well trashed over the last 50 years. Commercially managing native forest is a very costly operation. The only way it can be viable is by producing very high value products from most of the resource. This has never happened. Certainly in the pulp and construction markets, which account for the vast majority of the wood market, native forests don’t stand a chance competing against plantation-grown wood.

  1. Special Timbers

Using scarce taxpayers money to cut down 400+ year old public native rainforest and oldgrowth in the 21st century, with the excuse that special timbers are an essential part of “Brand Tasmania”, makes no sense whatsoever. All wood production must be fully commercial and profitable. There must be no community-service forestry in Australia. Given that blackwood makes up the vast majority of special timbers production anyway, and it can be grown in commercial plantations, the focus of special timbers policy must change.

  1. Forest practices

I have four thoughts here:

  1. The current Tasmanian forest practices code was developed when community-service public native forestry dominated the industry. However in the spirit of over-regulation it provided a significant hurdle to private plantation development. The forest practices code needs to be reviewed within the light of the following three comments.
  2. We need to create a primary industries level playing field when it comes to environmental management, so that regulation does not distort land use decisions. New Zealand has this approach to “forest practices” with their Resource Management Act 1991. I don’t see why Tasmania should not follow their example.
  3. Following on from b) the Tasmanian Forest Practices Authority should be merged with the Tasmanian Environmental Protection Authority to provide environmental monitoring, regulation and research services across all jurisdictions. Why does the forest industry need its own separate environmental regulation system?

http://www.fpa.tas.gov.au/

http://epa.tas.gov.au/

  1. The Australian forest industry should work towards developing a single set of national plantation management guidelines for the whole country as much as it is able within the maze of different State jurisdictions. At the moment regulations governing plantation management vary enormously across Australia. This is stupid and anticompetitive. It will be a long process but a worthy goal.
  1. Tasmanian Farmers and Graziers Association

The Tasmanian Farmers and Graziers Association (TFGA) needs to become a genuine independent, vigorous advocate for private forest growers. The interests of private forest growers are not the same as those of sawmillers, or Forestry Tasmania nor the Government of the day. A thriving commercially competitive, profitable forest industry can only exist when private tree growers have a strong, fearless, independent voice. The TFGA is the only option currently available.

  1. Competition, prices, markets and transparency

The forest industry in Australia hates open market processes and transparency! This is not surprising given its history. When was the last time you saw a forestry market report in the Australian media? When was the last time you saw a sawmiller hang out his slate looking to buy sawlogs?

In my books this is the major challenge for the industry. There have been a few attempts in the past to change this but they have failed due to lack of industry support. The industry will have no future until it becomes fully commercial – aggressively commercial!!! It’s all about competition, prices, markets and transparency. Farmers will never take the forest industry seriously until this happens.

  1. Where to begin?

Tasmania is a great place for growing trees for wood production.

But Tasmania is a small island a long way from world markets.

Because of our size and remoteness we cannot compete well in commodity markets like pulpwood and construction timber. We must think small volume high value niche markets such as appearance grade timbers and timbers for specialty markets. New Zealand farmers are doing this. But it needs focus and a strategy, not a random shotgun approach. One obvious example is macrocarpa cypress. There is a growing demand for this timber, as a handful of people in Tasmania know very well. NZ has thousands of hectares of cypress plantation growing on farms. Why doesn’t Tasmania?

  1. Blackwood

Tasmanian blackwood provides another ideal example of a low volume high value forest product with which to help rebuild the forest industry. Quality appearance grade timber will always be sort after in the market, especially the super premium market. Tasmania could easily be producing 30,000 cubic metres of premium blackwood sawlog per year with the right policy and industry backing. At $500 per cubic metre that equates to $15 million in farm gate value per year. So where is the policy and industry support that will make this happen?

 

Unfortunately all of these ideas are so beyond current forest industry and political thinking they will never happen.

Certainly Minister Barnett’s Ministerial Statement contains nothing like the above plan.

No one is campaigning in Tasmania for private forest growers and a fully commercial profitable forest industry!

Tasmania does a good job running a successful dairy industry; and a pretty good job running beef, vegetable, apple, cherry and wine industries. So what is it about the forest industry?

When will Tasmania get a fully commercial profitable forest industry?

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Posted in Commentary, Forestry Tasmania, Politics

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Special Timbers Subsidised Charade Continues

Posted on November 13, 2016 | Leave a comment

bedroom_suite2

Forestry Tasmania, the State government forest agency tasked with commercially managing the public native forests of Tasmania, has released its Annual Report for 2016. Forestry Tasmania is Australia’s largest grower and producer of Tasmanian blackwood timber.

http://www.forestrytas.com.au/news/2016/10/forestry-tasmania-s-annual-report-2015-16

A previous blog has focused on the insolvency of the organisation and its dismal future.

https://blackwoodgrowers.com.au/2016/10/31/forestry-tasmanias-insolvency-report/

Here I limit my comments specifically to blackwood and other so called special timbers. These are mostly reported on pages 25-26 of the Annual Report.

Since 1991 Forestry Tasmania has had a commitment to supply 10,000 cubic metres per year of millable blackwood sawlog (Category 4 and Utility) to market.

Forestry Tasmania also calculates a blackwood (millable) sawlog sustainable yield which it must abide by. Forestry Tasmania only calculates 2 sustainable yields: one for eucalypt sawlog and one for blackwood sawlog. The blackwood sawlog sustainable yield is 3,000 cubic metres per year.

http://cdn.forestrytasmania.com.au/uploads/File/pdf/pdf2014/review_sustainable_blackwood_supply_2013.pdf

Once again Forestry Tasmania refuses to tell us how much millable blackwood sawlog it produced during the year. Once again all we are told is total special timbers production that includes outspec and craftwood. We are told that 8,007 cubic metres of millable special timbers sawlog was produced.

Once again the report refuses to tell us what prices blackwood and other special timbers achieved. The Government has already admitted that Forestry Tasmania’s prices are ridiculously low give-away prices!!

http://www.premier.tas.gov.au/releases/ministerial_statement_-_forestry

Once again the report refuses to reconcile blackwood sawlog production with the sustainable yield. The overcutting of the public native forest blackwood resource continues unabated.

Once again the special timbers report on pages 25-26 refuses to openly and honestly tell us that special timbers production is managed as a non-profit, non-commercial, taxpayer funded activity. Is Forestry Tasmania being deliberately deceitful?

Once again the long suffering Tasmanian taxpayer has been forced to subsidise the special timbers industry directly to the tune of $0.91 million (p. 70).

That equates to a direct subsidy of $86.27 for every cubic metre of our highest quality, most valuable sawlog, veneer log and old stump and lump of craftwood that was harvested during the year.

Every $10,000 dining suite, every $8,000 bedroom suite on the showroom floor includes a few hundred dollars of taxpayer subsidy. It really is an outrage and a terrible waste of public money that should be spent on our schools and hospitals.

If anyone in the blackwood industry or the Tasmanian community believes this charade equates to open, honest, transparent reporting by our public forest manager they should think again.

When will Tasmania get a fully commercial profitable forest industry?

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Posted in Commentary, Forestry Tasmania

Forestry Tasmania’s insolvency report

Posted on October 31, 2016 | Leave a comment

FTAR2016.jpg

FT is never going to make a profit. It sells its products too cheaply and is locked into too many loss making contracts. It even makes losses from supplying high quality sawlogs.

With brutally honest statements like that finance commentator John Lawrence carves up the latest Annual Report from Forestry Tasmania (FT), Australia’s largest grower and supplier of blackwood timber.

http://tasfintalk.blogspot.com.au/2016/10/forestry-tasmanias-insolvency-report.html

On top of that sawmillers are now threatening to close if they have to take on more of FTs costs or pay higher log prices.

Checkmate!!

http://www.abc.net.au/news/2016-10-27/sawmill-viability-doubts-under-forestry-tasmania-price-rises/7969776

You can get your own copy of the Annual Report here:

http://www.forestrytas.com.au/news/2016/10/forestry-tasmania-s-annual-report-2015-16

Forestry Tasmania is an absolute mess but after decades of poor policy and politics it is certainly no surprise.

Here’s another gem:

The past year is best described as a continuation of the de facto wind-up of FT commenced under the watchful eye of Treasury boss Tony Ferrall once he was appointed [to the FT Board] in May 2015. A complying Board is now in place, stacked with directors whose post nominals as long as your arm indicate academic forestry knowledge. Their insolvency experience however looks a little thin. That is the prime challenge facing the company. FT is not turning the corner. That’s yet to be found. There is no plan to build the forest industry. It’s an insolvency operation. Presumably Mr Ferrall is acting on instructions from Mr Gutwein, which makes the government a two faced outfit.

If you have any interest or “skin” in the blackwood industry as a sawmiller, logger, manufacturer, retailer or consumer you need to read Mr Lawrence’s analysis.

Is the blackwood industry going to go down with the sinking ship called FT, or will it turn to Tasmanian farmers to grow blackwood?

When will Tasmania get a fully commercial profitable forest industry?

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Posted in Forestry Tasmania, Politics

Forestry Tasmania declares bankruptcy!!

Posted on October 28, 2016 | Leave a comment

barnett2

This statement issued on the 26th of October by the Tasmanian Government contains the following statement from The Board of Forestry Tasmania:

On the 29th September 2016 the Board of Forestry Tasmania formally advised shareholder Ministers that, despite the efforts to date, the business was not operating profitably and would be unable to do so for the foreseeable future.

That is a formal declaration of bankruptcy.

Forestry Tasmania, Australia’s largest blackwood grower, is now officially trading whilst insolvent.

You can access the full Government statement here:

http://www.premier.tas.gov.au/releases/ministerial_statement_-_forestry

The statement is well worth reading and shows what a terrible mess is public native forest logging in Tasmania.

Another interesting point to note is that blackwood and other special species timbers will now be harvested from informal reserves including streamside reserves and wildlife habitat reserves.

The desperation to find more wood is incredible!

Whilst their Annual Report issued last Wednesday says this:

The Directors have reviewed the appropriateness of continuing to prepare the financial statements on the basis that Forestry Tasmania is a going concern.

Is FT misleading the market?

When will Tasmania get a fully commercial, profitable forest industry?

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Posted in Forestry Tasmania