WoodWeek – 25 May 2016

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Greetings from your WoodWeek news team. There is continued evidence of strength across our forest and wood products. Both logs for export, led by Chinese demand, as well as a buoyant domestic sawn timber market with prices continuing to lift for both pruned and structural logs. On the export log front AgriHQ analysts report a mix of sentiment in the export market outlook from local exporters. Certainly softwood log stocks in China’s ports are well down from their recent peak in April last year and the outlook is far more positive taking into account all wood supplies into China.

Underpinning the future of our forest industries is of course the investment in trees. This week the Financial Markets Authority announced it has now made its decisions affecting forestry schemes that are managed investment schemes. Many forestry schemes will be managed investment schemes and will need to comply with new obligations under the FMC Act by 30 November 2016. New obligations include having a licensed manager and increased governance measures.

Forestry training and success celebrated in Otago Southland and on the East Coast in the past week with close to a thousand people in total turning out for the ceremonies. The brilliant thing about these awards ceremonies is that local industry leaders and their outstanding employees get the recognition for their outstanding work right in front of their peers. The trend is growing as well with other regional wood councils set to follow suit.

Continuing on the forest growing theme this week, in Australia, timber industry body Forest and Wood Products Australia (FWPA) says a new plan for research into agroforestry will not be a repeat of failed managed investment schemes. Last Thursday, government funding was announced for a research and development project to look into growing trees for harvest on farmland. FWPA will coordinate the research to investigate the tree varieties, soil types and planning needed to introduce timber plantations on farm.

Finally, thanks to you – our faithful subscribers – for responding to our request for more funnies to ward off the jokes drought. More are still welcome, but in the meantime US presidential candidates might just keep us going for a while yet.

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Log prices bolstered by steady demand

NZ export log prices lift in May as weaker currency offsets higher shipping costs - New Zealand export log prices advanced this month as a decline in the local currency made the country's shipments more competitive, offsetting a lift in shipping costs.

The average wharf gate price for New Zealand A-grade logs edged up to $120 a tonne in May, from $119 a tonne in April, according to AgriHQ's monthly survey of exporters, forest owners and saw millers.

The in-market price of A-grade logs in China, New Zealand's largest market, advanced to US$113/JAS from US$111/JAS last month as inventory levels on Chinese ports remain moderate, following a relatively low build up of stock on ports during the Chinese New Year holiday period. Log inventories on Chinese ports are about 3.6 million cubic metres, with a consistent offtake of 50,000 to 55,000 cubic metres per day, although volumes are coming at a faster rate, suggesting inventories are building, AgriHQ said.

"The outlook for the market varies between NZ market participants," AgriHQ analysts Reece Brick and Shaye Lee said in their report. "Some believe the market will maintain its current trend in the coming months, given the recent stability of the market. Others are more pessimistic, believing current returns are too high to be maintained in the long run."

Chinese log imports lifted 2 percent to 6.1 million tonnes in the first quarter, with New Zealand and Russia each accounting for about a third of the trade. March imports lifted 53 percent from February, signalling recovery of market activity after the Chinese New Year and trade is expected to lift in the second quarter, in line with the seasonal trend, AgriHQ said.

Meanwhile, in the New Zealand domestic market, prices lifted for both pruned and structural logs as demand exceeded supply. In the pruned market, P1 logs rose to $181 a tonne from $180 a tonne last month, supported by house construction.

"The continuation of the housing boom has acted to support structural log markets," AgriHQ said. "Housing construction through both Auckland and Christchurch remains the main driver of demand, but interest in other centres such as Hamilton is also positive, as the high cost of living is leading to some moving away from the Auckland region."

In the structural market, S1 logs firmed to $114 a tonne from $112 a tonne last month. Demand for structural logs is expected to ease heading into harsher seasonal weather, which will slow construction activity, AgriHQ said.

Roundwood demand is stronger than anticipated as demand from the horticulture and viticulture industries is offsetting a decline in demand from the dairy industry. The pulp market was impacted by production issues at multiple mills, although prices remained unchanged at $49 a tonne as some of the backlogged log stock was pushed onto the export market, AgriHQ said.

Shipping rates to China edged up to US$14.7/JAS from US$14.2/JAS last month, while rates to South Korea advanced to US$16.2/JAS from US$15.1/JAS, and rates to India lifted to US$21.6/JAS from US$21.3/JAS.

"It is expected shipping rates will follow a similar trend to the oil price in the coming months, however the large number of shipping vessels operating at present will likely keep rates well below where the market has sat in recent years," AgriHQ said.

Source: BusinessDesk + Scoop

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New FMA rules for some forestry schemes

The Financial Markets Authority (FMA) has now made its decisions affecting forestry schemes that are managed investment schemes.

Forestry scheme obligations under the Financial Markets Conduct Act
Many forestry schemes will be managed investment schemes and will need to comply with new obligations under the FMC Act by 30 November 2016. New obligations include having a licensed manager and increased governance measures.

Help with the licensing process
To help forestry managers with the licensing process and to help applicants keep costs to a minimum, we have produced a licensing guide specifically for forestry managers. You can find the guide here (http://fma.govt.nz/compliance/guidance-library/managed-investments/licensing-guide-for-mis- managers-of-forestry-schemes/). FMA staff are happy to engage with applicants at any stage of the process.

Some schemes may not fall within the definition of a managed investment scheme in the FMC Act, and will not have FMC Act licensing and governance obligations. Our guide sets out our view of the relevant considerations in making this important decision.

Exemption relief
In general, the Financial Markets Authority considers that forestry schemes can and should comply with the same requirements under the FMC Act as other MIS. However, there are some specific requirements where, given the characteristics of forestry schemes, we recognise the costs of full compliance outweigh the benefits. To address these matters, the FMA has approved the following exemptions for forestry schemes and their custodians.

The enclosed PDF guide (see below) gives an update on those decisions and the support we are giving forestry schemes that are managed investment schemes with their new obligations under the Financial Markets Conduct Act. The licensing guide explains what to consider in deciding whether a scheme is a managed investment scheme and subject to the FMC Act.

Staff at the FMA have contacted some forest managers individually, but others may not be aware of the information who may be affected. We are asking managers wanting to rely on the exemption from licensing and updating governing documents to contact us so we can discuss whether they are eligible and the detail of the exemption. FMA is asking for an initial response from managers by 31 May to ensure exemptions are in place before the law takes effect.

See PDF for more information:
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Southern forestry celebrates successes

Forestry training and success celebrated in the South - Last Friday night the rugby stadium hosted forestry stars for a change. Organisers saw another outstanding turnout by local forestry companies, contractors and transport operators from throughout the lower South Island of New Zealand. The function was the Southern Wood Council Forestry Awards for 2016.

The Council, representing all major forest owners and most of the major wood processing companies in Otago and Southland ran the 2016 Awards programme in conjunction with the industry training organisation, Competenz. The event was designed to profile the real contribution that forestry and those working within the industry are making to the economic and social well-being of the region, celebrate the success of those from within the industry that have achieved formal training qualifications over the year and through a series of new awards, to recognise the industry’s top performers from across the lower South Island.

The industry certainly rallied on the night. Like 2015, over 350 forest managers, forestry contractors, transport operators and product and service suppliers to the industry from throughout the lower South Island attended the awards evening at Dunedin’s Forsyth Barr Stadium.

“The turnout by forestry workers, their families and supporters on the night is probably a true reflection of the momentum that’s been building over the last year or so with on-site training and safety in this region” says Brent Apthorp, Secretary of the Southern Wood Council. “In addition to celebrating the training achievements of forestry crews, many travelling into Dunedin, some driving 3-4 hours to attend the evening, also brought with them other workers to celebrate the year – and to recognise the success of forestry workers, crews and companies that had stood out over the past 12 months”.

Presenters and speakers at the awards programme included rural broadcaster Jamie MacKay from Newstalk ZB and Radio Sport’s show The Country, Hon Jo Goodhew, Associate Minister for Primary Industries, Peter Gallagher, All Blacks Physiotherapist and High Performance Sports Consultant, Stephanie Rotorangi, Principal Rural Fire Officer, Otago and representatives from local forestry companies.

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East coast forestry expertise recognised

Forestry Toast of the Town at Annual Awards Ceremony - Hoot Knowles has the reputation for working more than just a little magic in his job, so it was fitting the 36-year veteran of the forestry industry walked off with two big prizes at the seventh annual Eastland Wood Council Forestry Awards last Friday night.

More than 520 people packed the Showgrounds Park Events Centre to honour and applaud the many involved in the industry.

Hikurangi Forest Farms’ William ‘Hoot’ Knowles received the big one of the night – the Eastland Wood Council Skilled Forestry Professional of the Year, as well as the Eastland Port Roading Excellence Award. He started his career in 1980, graduating to his own forest roading business in 1994 before joining Hikurangi Forest Farms in 2011.

Those around him have nothing but praise for the man they say believes in never rushing a job, is dedicated and determined to provide a top quality product, is generous to work mates and fellow contractors, and has been known to weave a little magic around a job to preserve his roads.

Eastland Wood Council Forestry Awards chief judge Julian Kohn praised the efforts of all of those who kept the industry ticking along.

“These awards are all about those who are out there doing the work . . . it is not about senior management or the corporates, but the contractors and the people who service the industry – the men and women on the ground,” he said.

Mr Kohn and fellow judges Mark Preece and Sheldon Drummond were all impressed with the quality of entries for the 2016 awards.

A key driver behind the awards is to encourage forestry workers to continually up-skill themselves.

“There is a new generation of forestry professional coming through now. The younger ones are up-skilling far quicker – they are faster to learn and understand what is needed,” he said. “People outside think it is just about growing and cutting trees . . . well, it is a whole lot more than that.”

Three new categories were added for 2016, honouring excellence in breaker out, extraction and skid work and faller. Tom Wehi from Blackstump Logging took out the McInnes Driver Training Breaker Out Excellence Award, Kasimea Afu from Flavell Logging the Ernslaw One Faller Excellence Award and Stephen Harris from Speirs Logging the Bain and Sheppard Chartered Accountants Extraction and Skidwork Excellence Award.

Awards organiser, and chief executive of the EWC, Prue Younger is confident there’s more growth potential. Things are gaining momentum,” she says. “The loyalty of our sponsors is amazing and that area of the awards continues to grow. When we first introduced these awards, we wanted to unite the industry, up-skill the workers and profile success – we’ve achieved all that and more.”

The industry continued to attract new contractors to the market, which in turn meant more nominees in the future.

All Black great Buck Shelford was MC and guest speaker for the evening.

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Whanganui roads need boost for harvest

A special rate to cover the damage heavy trucks are expected to create on Whanganui's rural roads when forest harvesting accelerates is something the district council needs to get serious about.

That is the message from Wanganui Federated Farmers in its submission to the council's 2016- 17 annual plan.

Spokesman Tim Matthews told councillors they should look at what Ruapehu District Council is considering - a special differential rate to recover costs from the forest landowners.

Mr Matthews said Whanganui's rural roads would experience heavy vehicle movements at least four times and possibly 10 times higher than those currently servicing existing farming operations adjoining the forests.

"There is a clear case for introducing either a special forest road policy or a differential roading rate," he said.

Harvesting Whanganui's 15,000ha of pine plantations would have an impact of millions of dollars on those roads. A council study showed it would cost an extra $20 million over 30 years to provide the present level of roading "service".


Source: Wanganui Chronicle

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FWPA welcomes farm forestry boost

In Australia, timber industry body Forest and Wood Products Australia (FWPA) says a new plan for research into agroforestry will not be a repeat of failed managed investment schemes.

Last Thursday, Deputy Prime Minister Barnaby Joyce announced $520,000 in funding for a research and development project to look into growing trees for harvest on farmland.

FWPA will coordinate the research to investigate the tree varieties, soil types and planning needed to introduce timber plantations on farm.

Minister Joyce said the research would seek to allow farmers to diversify into planting trees for harvest and give farmers another source of on-farm revenue.

FWPA managing director Ric Sinclair said funding for the research project would benefit both timber processors and farmers.

FWPA will partner with several groups including Dairy Australia, the CSIRO and the Rural Industries Research and Development Corporation to carry out the project.

More >>

Source: ABC News

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Coming Soon! - XBOX Forestry

XBOX Forestry - what’s this you ask? It’s for youngster’s out there – and maybe young at heart. UIG Entertainment have just announced the answer to those who have a love of chopping down trees but don’t necessarily wish to spend a lot of time outdoors.

Forestry 2017: The Simulation will be hitting the Xbox One sometime in the first half of 2016 and according to the advertising out there, it’s going to appeal to those who like the sedate gaming features like the Farming Simulator.

"Cut yourself a new niche in the woodcutting business as Forestry 2017 takes you on an exciting business venture in your very own forest. As with the Farming titles, the game will feature realistic logging machinery and equipment. Everything you need to enjoy the fresh air and challenge your lumberjack skills. Learn to operate and master the tools of the trade and have fun driving ultra-cool harvesters, tractors and trucks".

"If you fancy getting up close and personal, you can always fire up your trusty chainsaw and shout ‘timber’ to your heart’s content. For a little bit of extra old-school fun, bring along your faithful logging horse to tow the timber away. Sell the wood and you can bank the profits or invest in more sophisticated machines to start your logging empire".

The game will also feature hired help with first and third person modes. There will be four types of trees that you can hack down for further processing and you will have the ability to choose from your incoming orders. You can adjust your production cycle where needed and also level your character up in-game.

Forestry 2017: The Simulation will be coming to Xbox One this summer. Here’s the announcement trailer.

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The Winners - Southern Wood Council Awards

Forestry staff of contractors and managers received about 120 National Training Certificates they had achieved in forestry and wood processing over the past year. Also awards were present to top local forest contractors and wood processing employees. In all, nine major industry awards were presented:

Training Excellence Award - Modern Apprentice of the Year (Sponsored by Southern Wood Council) : Award Winner; Keanu Falconer, Shane Griffin Logging

Training Excellence Award - Forestry Trainee of the Year (harvesting) (Sponsored by Rayonier/ Matariki Forests) : Award Winner; Wayde Lindsay, Shane Griffin Logging

Training Excellence Award - Forestry Trainee of the Year (silviculture) (Sponsored by Dynes Transport) : Award Winner; Darren Lundin, McHoull Contracting

Skilled Professionals Awards – Forestry Excellence Award (establishment, silviculture, fire, harvesting) (Sponsored by South Wood Export) : Award Winner; Craig Gamble, Gamble Forest Harvesting

Skilled Professionals Awards – Wood Processing Excellence Award (Sponsored by Competenz) : Award Winner; Phillip Townshend, Niagara Sawmilling Co

Skilled Professionals Awards – Forest Products/Logistics/Transport/Port Award (Sponsored by UDC) : Award Winner; Blair Keelty of McNeill Drilling Company Ltd (Logging Division)

Industry Excellence Awards – Forestry Environmental Management Excellence Award (Sponsored by Otago Regional Council) : Award Winner; Greg Kendall/Paul Hart of Ernslaw One

Industry Excellence Awards - Training Company/Contractor of the Year (Sponsored by City Forests) : Award Winner; Johnson Forestry Services

Industry Excellence Awards - Forest Products Health & Safety Award (Sponsored by Ernslaw One) : Award Winner; Gillion Logging

Tree Faller Certification – Otago Southland. Four new certificates for Professional Tree Faller Certification, a new scheme that has just been implemented in the Otago/Southland region were also awarded.

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The Winners - Eastland Wood Council Awards

- Trophies were awarded for:

Eastland Wood Council Skilled Forestry Professional of the Year: William (Hoot) Knowles, Hikurangi Forest Farms

Contractor of the Year: Steve Dewes, Dewes Contractors
(Sponsored by UDC New Zealand’s Finance Company)
(covers all supply chains, including logging, roading silviculture and distribution)

Outstanding Health and Safety Management Award:, : Eastland Port
(Sponsored by Williams & Wilshier and Pacific Haulage

Outstanding Environmental Management Award: Liam Watson, Ernslaw One
(Sponsored by Universal Engineering Ltd

Outstanding Regional Service Performance Award:Rural Fuel
(Sponsored by C3 Complete Cargo Care)

Certificates - Skilled Professionals

Forestry Excellence Award: (Individual-establishment, silviculture, fire and roading): Amohau Maxwell, Juken NZ
(Sponsored by Emerre & Hathaway)

Roading Excellence Award(Individual): William (Hoot) Knowles
(Sponsored by Eastland Port)

Harvesting Excellence Award (Individual): , Eru Rickard, X Men Logging
(Sponsored by Stihl Shop)

Distribution Excellence Award (log truck drivers, dispatch, port workers): Rob Lewis, C3
(Sponsored by MITO)

Wood Processing Excellence Award (Individual): Glen McCulloch, Double J Smallwoods
(Sponsored by EIT Tairawhiti)

Breaker Out Excellence Award: (individual), Tom Wehi, Blackstump Logging
(Sponsored by McInnes Driver Training

Faller Excellence Award: (individual) Kasimea Afu, Flavell Logging
(Sponsored by Ernslaw One Ltd)

Extraction & Skidwork Excellence Award (Individual): Stephen Harris, Spiers Logging
(Sponsored by Bain & Sheppard)

Training Excellence Awards
NZ Apprentice of the Year (Competenz Category): - Jasmine Kuru, Kuru Contracting.

(Sponsored by Competenz)

Trainee of the Year (Competenz Category): Rob Clarke, Kimberly Contractors.
(Sponsored by McCannic's)

Training Company/Contractor of the Year (FITEC Category): Diack Contractors, Ian & Marcella Diack
(Sponsored by Hikurangi Forest Farms)

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Kiwis are TOP tree climbers

New Zealanders have won both the men’s and women’s world championship titles at the International Tree Climbing Championship (ITCC) recently held in Texas. Sponsored by Husqvarna, the 40th ITCC Masters’ Challenge saw Kiwi James Kilpatrick, originally from Tauranga, win the men’s master’s challenge, while compatriot, Chrissy Spence from Morrinsville, took out the women’s event.

James Kilpatrick says the ITCC world title is the ultimate goal for climbers around the globe. “The challenge is not just physical but mentally tough too,” says James, who is now based in Germany, where he works as an arborist.

“Our Kiwi team has an impressive reputation when it comes to ITCC. Over the past five years we have been on the podium more than any other chapter and I'm proud and humbled to be in amongst this team of down-to-earth tree climbers doing what we love.

The Masters’ Challenge is the premier event at the tree-climbing competition, where the competitors with the highest preliminary event scores showcase their skills. The ITCC is run by the International Society of Arboriculture (ISA) and, since 1976, the annual event has seen the world’s best professional tree climbers gather to compete against each other and the clock. The range of events tests their ability to professionally and safely manoeuvre in a tree while performing work-related tree-care tasks.

More than 60 arborists from 18 countries competed at the 2016 competition in Beckenridge Park in San Antonio, Texas. New Zealand has an impressive, if little known, history in competitive tree climbing. Chrissy has now won the women’s world championship title four times and James has been Asia Pacific men’s champion three times before taking the global Masters title this year. Husqvarna ambassador Scott Forrest has claimed the men’s title three times.

Husqvarna has a long-standing association with the ISA and, as well as their coveted trophies, Chrissy and James both took home an armload of Husqvarna gear, including battery chainsaws to help them in their professional lives as working arborists.

Photo: 2016 ITCC champs, New Zealanders James Kilpatrick (left) and Chrissy Spence (photo: ISA).

Source: NZ Logger

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... almost finally ... Another great NZ export

Listen to these boys who have just made a big impact with the Aussies:
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... and finally ... Little Johnny meets Donald Trump!

Thanks to everyone who replied to our call for help

Now to the joke de jour:

Donald Trump was visiting a primary school in Orlando and visited a grade four class. They were in the middle of a discussion related to words and their meanings.

The teacher asked Mr. Trump if he would like to lead the discussion on the word 'tragedy.' So our illustrious Republican candidate asked the class for an example of a 'tragedy'.

One little boy stood up and offered: "If my best friend, who lives on a farm, is playing in the field and a tractor runs him over and kills him, that would be a tragedy."

"No," said Trump, "that would be an accident."

A little girl raised her hand: "If a school bus carrying 50 children drove off a cliff, killing everyone, that would be a tragedy."

"I'm afraid not," explained Trump. "That's what we would call great loss.."

The room went silent. No other child volunteered. Trump searched the room.

"Isn't there someone here who can give me an example of a tragedy?"

Finally at the back of the room, Little Johnny raised his hand.
The teacher held her breath.
In a quiet voice he said: "If the plane carrying you was struck by a 'friendly fire' missile and blown to smithereens that would be a tragedy."

"Fantastic!" exclaimed Trump, "That's right. And can you tell me why that would be a tragedy?"

"Well," says Johnny, "It has to be a tragedy, because it sure as hell wouldn't be a great loss... and you can bet your sweet ass it wouldn't be an accident either!"

The teacher, speechless as ever at Johnny's endless brilliance, left the room ...

Have a safe and productive week.

John Stulen

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