WoodWeek 10 May 2017
Looking to our own wood production capacity, here in New Zealand we appear to have hit our limits in labour capacity. This week the Forest Industry Contractors Association has been sharing the woes, as it looks for solutions for its members struggling to hire enough people for their harvesting and planting businesses. With other industries competing for our workers, and forestry employers now well known for drug-testing, it is getting harder to maintain production output with workers hard to find.
While tree-planting for carbon sequestration is unlikely to become an election issue soon, there is a continuing awareness of the need to grow our production and non-production forest estate. The message continues to be brought to the attention of the media, not by our own forest community alone, but increasingly by independent groups like Pure Advantage and the cross-party parliamentary group GLOBE-NZ. The role of a growing forest estate in meeting our ‘Paris Agreement’ international obligations will get a further promotion later this year from the Forest Owners Association.
But today we will leave the last word in this week’s wood news to a US- based economist, Ed Lotterman whose comments on the world’s favourite softwood feud may surprise you: "We have fought over Canadian softwood for decades. And whenever it came before an impartial third party in the past, the US has lost, regardless of what our own ITC had ruled. Over long periods we reneged on our word and refused to honor arbitration rulings, but we have never won the core case.”
This week we have for you:
Russian exports: a competitive forceAt the recent BC Council of Forest Industries (COFI) annual convention in Vancouver, WOOD MARKETS’ president Russ Taylor delivered an overview of the Russian forestry and sawmilling industry, detailing the means by which it has become a major competitive force in log and lumber export markets. Interestingly, much of the information and analysis seemed to come as a surprise to many attendees. The most common queries were related to Russia’s expanding and competitive sawmilling industry, its high profitability, and its increased export market share in China.
Russian Industry Overview:
For background, Russia is one of the world’s dominant log and lumber producers and exporters. Consider the following:
- Softwood timber harvest: Russia has a 12% market share of global output and surpassed Canada in 2014 for the #2 spot;
- Softwood lumber production: Russia represents 10% of global lumber production and that level is growing. It is the third-largest country producer (after the US and Canada);
- Softwood log exports: Russia has a 15% global market share and is second only to New Zealand; and
- Softwood lumber exports: Russia represents 21% of global lumber exports and has been growing its share steadily. It is now the second-largest country exporter (after Canada).
The trends in the Russian timber harvest (softwood and hardwood industrial roundwood) reveal steady gains since 2009 (when the Russian log export tax reached 25%). The Russian export tax subsequently reduced log exports to China, and exports to other countries dropped to almost zero. The exception was Finland: pulpwood exports persisted following changes to the export tax (in 2012) when Russia was admitted to the WTO. A summary of total Russian log and softwood lumber exports shows a dramatic fall in log exports and an increase in lumber exports. The Russian log export tax and, more recently, the devaluation of the ruble, have created a high-margin sawmilling industry that is processing more sawlogs within Russia, and exporting more lumber/fewer logs.
As we have been saying for more than two years, the Russians are coming. This is a result of competitive costs coupled with major capital investments into logging, sawmilling, value-added processing and logistics. With a competitive advantage, due to the devalued ruble, Russian mills will continue to gain lumber market share in China, especially as they increase their volume of kiln-dried and higher-grade lumber. Also of note, Chinese mills at the border are adding sawmill and value-added equipment to process Russian logs and produce high-value kiln-dried lumber that can be shipped much further afield. Furthermore, with FSC- certified timber and lumber, Russian producers are learning about the economic returns of providing customers with the sizes and grades of lumber they need/want — a big change from ten years ago.
The simple fact is that Russia poses a growing threat to all other countries exporting lumber to China. The country’s influx of investment into forestry and sawmill capital improvements has greatly enhanced its cost-competitiveness, and it would be perilous to underestimate the extent of the country’s growing dominance.
Source: International WOOD MARKETS Group, www.woodmarkets.com
Northland forestry shortage: 50 jobs availableA global demand for logs and competition for workers in primary industries have left Northland with an acute shortage of labourers in the forestry sector- a situation that may delay planting and harvesting of trees.
At least 50 workers to perform a variety of jobs such as machine operators, planting, and tree pruning across the region are needed immediately and some forestry contractors are already looking to hire from the Pacific Islands and Philippines.
Forestry contractors began experiencing the shortage two years ago but it has now become dire.
Kevin Ihaka, owner of Forest Protection Services in Whangarei which does planting and pruning of mostly pine forests on behalf of forest owners throughout Northland, has just placed a job advertisement for 15 more workers.
He said the situation was critical for contractors as a lot of trees were ready to be harvested.
"The export price for logs is good so the forestry industry is in good shape. The demand for logs looks like it will hang around for a number of years but we can't get workers.
"We can take people without any skills and train them and when you look at the number of people who are unemployed in Northland, forestry work is something they can do."
Mr Ihaka, who is on the Forest Industry Contractors Association board, said labour shortage was more prevalent in Northland and Gisborne and he feared jobs such as planting and harvesting may not get done or could be delayed if more people were not recruited on time.
Part of the reason people lost interest in forestry work, he said, was because some contractors did not treat their staff well in the past which gave the sector a bad name.
But he said employment laws have since toughened and work conditions have become safer after the introduction of mechanical harvesters which should entice Northlanders to consider forestry as a long term career.
Compulsory alcohol and drug testing either put people off from applying for roles in the forestry sector or they left employment but Mr Ihaka said workers were changing their habits because of job security.
According to the Ministry for Primary Industries, Northland had 131,333ha of forest area in which radiata pine, douglas fir, cypress, other softwood, eucalypt, and other hardwood were grown as at April 1, 2016.
OneForest has advertised for proposal to harvest 70,000 tonnes of trees in Broadwood, 48km southeast of Kaitaia, from July and company director Des Minehan said forest contractors needed to train and educate locals so they stayed in the job for long.
The company opened an office in Kaitaia two years and ago works with small forest growers of between 20 and 100 hectare blocks throughout Northland.
Source: Northern Advocate
Capacity crowd expected for HarvestTECHFollowing our successful and well-attended international conference on logging innovations in Kelso, Washington last month, the team here at Innovatek has turned it's attention to finalising bookings for the last few seats available for HarvestTECH 2017 on 20-21 June in Rotorua.
With Earlybird rates closing this Friday we are still experiencing high registration rates. HarvestTECH and the two associated field trips are now getting close to selling out.
Over 350 people have now registered. However, one of the field tours has already been filled and just a few remaining spaces are left on the FGR Field Tour planned for the day before the conference, Monday 19 June. We now fully expect this event to be SOLD OUT.
Details of the conference content is on the event website: www.harvesttech.events.
Some truly innovative harvesting operations are also going to be profiled for local companies at the event. For the first time in New Zealand people at HarvestTECH will get a chance to see the innovative new tree-felling carriage developed by Dale Ewers and his teams at Moutere Logging and DC Equipment (see inset photo).
Our forest future: One year onDr David Hall (via Pure Advantage)
One year ago I released the Our Forest Future report for Pure Advantage. It identified that New Zealand was facing a trend of net forest loss – and argued that we needed to turn this trend around. I called for 1.3 million hectares of new forest to reduce New Zealand’s forward liabilities for degraded natural assets and foreign carbon offsets. Our future forest, I argued, was an essential element in getting New Zealand on track to net zero greenhouse gas emissions.
This issue was largely off the public radar then – but how things change. Since last year, there have been some crucial shifts in government rhetoric, as well as a blossoming of forest-related initiatives throughout the country (more on these below). The need for net forest gain was also reinforced and refined by last month’s Vivid Economics’ report, Net Zero in New Zealand, prepared for the cross-party parliamentary group GLOBE-NZ. This report took a cross-sectoral approach, exploring not only forestry and land use, but also the potential for emissions reductions in energy, industry, waste and agriculture; and how all these elements hang together.
The Vivid Economics report explored three potential pathways to reduce New Zealand’s greenhouse gas emissions: Off Track, Innovative and Resourceful. Crucially, all these scenarios anticipate substantial new forest planting over the coming decades.
The Resourceful scenario boosts forest area by 2.3 million hectares by 2050, about one-third of this in native regeneration. Innovative aims for 1.5 million hectares of new forest, about one-quarter native regeneration. It also de-intensifies agriculture by converting 1.5 million hectares of pasture to horticulture. Along with changes in other sectors, both of these scenarios put us on track to meet our Paris Agreement promise of net zero emissions by the second-half of this century.
Even the less ambitious Off Track scenario, which only keeps our net emissions a tad below their current levels, requires us to add 388,000 hectares of plantation forest. Under this scenario, we would still need to expand our net stocked forest area by 9,300 hectares annually until 2070. Yet the reality is that, over the last ten years, our plantation forests are shrinking at an equivalent rate – from 1.81 million hectares in 2005 to 1.72 million hectares in 2015. Most of this deforested land was intended for dairy conversion.
Source: Pure Advantage
ANZ Commodity Price IndexWhile the headline ANZ Commodity Price Index dipped 0.2% in April, the underlying detail for New Zealand’s main commodities remained robust. The headline index was driven lower by dairy (-2.5% m/m), while the non-dairy component rose 1.2% m/m. Continued weakness in the NZD also added to local exporter returns, with local prices up 0.5% m/m and 20.4% y/y. The NZD index is now at its highest level since 2013/14 when milk powder prices were at record highs.
Despite some global jitters for commodity prices, New Zealand’s main basket continues to perform well for now. This strength has been driven primarily by supply shortages in some sectors, but also robust demand from Asia (especially China) and the US for some products.
In terms of sector specifics:
Tasmania: Forestry growth plan releasedMinisterial Advisory Council releases forestry growth plan - A report from the Ministerial Advisory Council on Forestry has quietly been put online, appearing to contradict aspects of the state government’s forest policy.
The council was tasked with reporting to Resources Minister Guy Barnett on possible strategies for the forest industry going forward.
Its Strategic Growth Plan recommends an “agreed and stable” approach to forest policy.
The Forestry (Unlocking Production Forests) Bill passed the lower house in March, and is now before the Legislative Council.
The bill’s objective is to open up 356,000 hectares of previously protected Tasmanian forest to logging, in the hope of satisfying Forestry Tasmania’s annual sawlog quota of 137,000 cubic metres.
Wilderness Society campaign manager Vica Bayley said the growth plan “fundamentally undermined” the government’s legislation.
“This growth plan nowhere points to reversing the protection offered to … forest reserves so they can be logged,” Mr Bayley said.
Mr Barnett said he “welcomed” the report.
Source: The Advocate
More coverage from ABC News:
The influential Ministerial Advisory Council (MAC) on Forestry has delivered its growth strategy for the industry to the Tasmanian Government — highlighting the growth in private plantation resources, and reinforcing the industry's future as one led by the private sector.
The plan, delivered to the Government in March, predicts the most significant growth in private plantation forests — which already provide more than half of Tasmania's annual wood harvest.
Public resource, or the forests managed by the state-owned Forestry Tasmania, is the main supplier to the sawmilling and veneering industries, and the specialty timber sector.
In October, the Government announced Forestry Tasmania would be downsized and revamped in an effort to stem its financial losses.
The Advisory Council plan said growth would be contingent on ensuring the Forestry Tasmania was "financially stable, commercially-focused and fully compensated for all community flow- on benefit".
It also recommends an "understanding of the environmental, social and economic implications, prior to any decision of Parliament on changes to the production forest estate (increases or decreases)".
Contentious legislation to open up 350,000 hectares of forests earmarked for protection for logging is in limbo before the Tasmanian Legislative Council.
The Ministerial Advisory Council plan stresses community expectations about forest management and environmental practices must be met.
Myrtle rust found in New ZealandMyrtle rust found in New Zealand - Late last week. Primary Industries Minister Nathan Guy and Conservation Minister Maggie Barry have announced, "We regret to inform you that a biosecurity response is underway after the detection of myrtle rust on mainland New Zealand for the first time.
Myrtle rust is a fungal disease which can seriously damage various species of native and introduced plants in the myrtle family, including pohutukawa, rata, manuka, gum, bottlebrush and feijoa.
“The Ministry for Primary Industries (MPI) was notified on Tuesday evening by a nursery in Kerikeri that five pohutakawa seedlings had suspected myrtle rust, and laboratory testing has now confirmed this,” says Mr Guy.
“MPI has moved quickly and initiated a Restricted Place notice to restrict the movement of any plants and people at the site, and is treating nursery stock with fungicide spray as a precaution. Work is also underway to trace any stock that has left the nursery and all other nurseries in Kerikeri are being inspected today.
“The disease is prevalent in eastern Australia and Tasmania, and was discovered on Raoul Island in late March this year. Myrtle rust spores are microscopic and can easily spread across large distances by wind. Officials believe that wind was the likely pathway of incursion into Raoul Island, and it’s likely that wind has carried spores to mainland New Zealand from Australia.”
Conservation Minister Maggie Barry says the incursion could have serious consequences for some native species. “Myrtle rust generally attacks soft new leaf growth, and severe infestations can kill affected plants. This could include native species like the pohutakawa and the rata,” says Ms Barry.
In Australia, the fungus has had different levels of impact on myrtle species, with some more seriously affected than others.
“Myrtle rust has long been expected to arrive in New Zealand, and since the Australian outbreak began in 2010, the Government has worked on a range of measures to help manage and adapt to the fungus in the long term if necessary,” says Ms Barry.
“This includes accelerating work already underway to collect and store germplasm from affected species, searching for signs of resistant myrtle strains which could be incorporated into a breeding programme and monitoring at 800 locations across the country.”
“DOC will also be conducting inspections of our myrtle species on public conservation land in Northland for any early signs of the fungus.”
There is no known method of controlling the disease in the wild, apart from application of fungicide in very small areas as a last resort. Even if eradication is achieved, there is an ongoing risk of reinfection from Australia.
“It’s very disappointing that this fungal disease has appeared in New Zealand. However, I want to thank the staff and owner of Kerikeri Plant Production nursery for making such a prompt notification to MPI,” says Mr Guy.
Anyone believing they have seen myrtle rust on plants in New Zealand should call MPI on 0800 80 99 66. It is very important not to touch the plants or attempt to collect samples as this will spread the disease.
In particular, anyone who has purchased any plants from the myrtle family in the last month should check for physical signs and contact MPI if any are seen.
For regular updates from the trust click here
Source: Project Crimson Trust
China to introduce tall wood building codeIn late February China’s Ministry of Housing and Urban-Rural Development (MOHURD) issued “Technical standard for multi-storey and high-rise timber buildings (GB/T51226 – 2017)”. In line with a global push towards taller wood structures, the code aims to broaden the scope of application of timber structures beyond the current 3-storey limit.
The new code allows wood structures up to 5-storeys. Moreover, on a case-to-case basis, structures up to 56 meters or 18 stories may be approved for construction in the lowest seismically rated zone in China (6 degree seismic) subject to local authority approval and expert endorsement. The code officially takes effect on October 1st, 2017.
Barriers remain for wood - While the code marks another step forward in the Chinese market, it is unlikely to result in a tall wood construction boom. Several barriers remain:
> floor area in 5-storey construction is restricted to that previously permitted under the 3-storey limitation. Therefore, individual floors will be proportionately smaller in footprint.
A lot of work remains to be done with fire code authorities to enable larger buildings in height and area. Local fire bureaus may need education to understand the new TWB code.
Canada recognized as an expert in tall wood - Thanks to the 18-storey Brock Commons residence at UBC Canada, widely viewed as a leader in tall wood. Accordingly Canada Wood is a member of the TWB code committee.
CW China provided Canadian research findings and best-practices to support the code development process. Canadian experts also collaborated with the Tianjin Fire Research Institute on joint fire safety research.
Source: Canada Wood
Wilding pines work extensiveWilding pines control work nears million hectare mark - Primary Industries Minister Nathan Guy and Conservation Minister Maggie Barry say wilding pines control work has nearly reached its first year target of a million hectares.
“20 per cent of New Zealand will be covered in unwanted wilding conifers within 20 years if their spread isn't stopped. They already cover more than 1.8 million hectares of New Zealand and until now have been spreading at about 5 per cent a year,” Mr Guy says.
“The National Wilding Conifer Control Programme was put in place in 2016 to prevent their spread and systematically remove them from much of the land already taken over.”
Ms Barry says wildings compete with native plants and animals for sunlight and water and can severely alter natural landscapes. “The control programme is to protect our conservation land, iconic landscapes, tourist routes, high country farming heritage and sensitive water catchments from these invaders,” Ms Barry says.
“Last year the Government committed an additional $16 million to wilding control over the next four years and that’s on top of an $11 million already spent each year.”
“Control work has involved targeted aerial spraying of individual trees in remote areas where there is light wilding infestation, and ground control in more heavily infested areas. The programme this year covers 14 initial priority areas, including extensive areas of conservation land and farmland in Central North Island, Marlborough, Canterbury, Otago and Southland.”
Minister Guy says wilding conifer are incredibly hard to get rid of once they become established.
“Prevention is the best form of management. Removing young seedlings before they start producing seeds costs less than $10 per hectare, but removing mature trees can cost over $10,000 per hectare.” Minister Barry says wildings are public enemy number one in the War on Weeds and top the Dirty Dozen 2017 list.
“The Department of Conservation’s Community Fund has financed a number of community groups, trusts and organisations to carry out wilding conifer control ion work in 2016/17, complementing the work of the national control programme by reducing wilding conifer spread in low density areas.”
The Wilding Conifer Control Programme has already started preliminary planning for 2017/18 control operations.
The Programme is being implemented by the Ministry for Primary Industries, Department of Conservation, and Land Information New Zealand in partnership with other central government agencies, iwi groups, local government, forestry and farming industries, landowners, researchers and community trusts and organisations.
(Is there an) Objective view of CAN-USA softwood feud?Sometimes when you see other people arguing it gives you time to reflect on your own situation and think about how good you have it. In this instance I am referring to the lack of political involvement in New Zealand's forest products industries compared to the ongoing saga that is the latest skirmish in a 30-year 'US vs Canada' softwood trade war.
It's impact on our markets is probably negligible to slightly positive (prices are forced up by tariffs). Recognising that, we try to minimise our coverage of the gamesmanship not detailing each body blow in the shadow boxing. Most of posturing is done between politicians with, quite possibly, nothing more useful to do. Here in New Zealand, it gives us time to reflect how lucky we are that our forests were sold by the Crown back in the 1980's. Think of the hot air that hasn't been generated here as we just get on with the business of sustainable forestry and it's environmentally friendly products that ensure our collective livelihood.
Forest products, principally lumber and pulp and paper, account for 35 per cent of all exports from B.C. Our province represents half of Canada’s softwood lumber production. And roughly half of BC softwood lumber exports are destined for the United States.
So this week’s action by the US Department of Commerce to slap countervailing duties averaging 20 per cent on Canadian lumber exports on the dubious charge that they are subsidized is a serious matter that demands quick resolution. Unfortunately, the resolution process through the World Trade Organization, the North American Free Trade Agreement settlement mechanism and/or litigation is anything but quick.
A one-year standstill following the expiry of the last softwood lumber agreement was intended to give the parties time to work out a new deal. But softwood lumber was not high on the agenda of outgoing US president Barack Obama and talks stalled.
This is an expensive and unnecessary trade dispute that has strained Canada-US relations for more than 30 years. Although Canada has won most of the battles over softwood lumber, companies must pay the duties until the matter makes it way through international tribunals. Last time around, the duties amounted to $5 billion US and, although most was repaid after Canada’s victory, US companies kept $1 billion. While Canada’s sunny ways prime minister, Justin Trudeau, takes the soft diplomacy approach and says it’s important to have a “constructive working relationship” with the US, BC’s Liberal Leader is playing bad cop, threatening to ban exports of US thermal coal through BC ports.
If may be coincidental that the latest lumber dispute is underway just as Canada, Mexico and the US are preparing to re-negotiate NAFTA. But perhaps this is an opportunity to end the 10-year cycle of lumber wars. Lumber is currently not part of NAFTA. Negotiators on both sides of the border should seek to include it in a revised free-trade agreement for the benefit of Canadian forestry workers and US consumers.
Source: Vancouver Sun
But today we will leave the last word on this from US-based economist, Ed Lotterman: Here is an extract, from his view, published in the Idaho Statesman earlier this week:
"We have fought over Canadian softwood for decades. And whenever it came before an impartial third party in the past, the U.S. has lost, regardless of what our own ITC had ruled. Over long periods we reneged on our word and refused to honor arbitration rulings, but we have never won the core case. We muscle Canada into some “voluntary” agreement that lasts for a decade or so and then we have another round of blustering.
Recognize also that while a higher proportion of our own lumber comes from private lands, our history of timber sales from public lands is not exactly pristine. We long have auctioned off federal timber plots. But often, the Forest Service spends more money building improvements like logging roads than it got in payments. So we effectively gave that timber away."
Source: Idaho Statesman via Tree Frog News
... almost finally ... mid-week funniesReturning home late one night from work, a blonde was shocked to find her house ransacked and burgled. She telephoned the police at once and reported the crime.
The police dispatcher broadcast the call on the radio and a K-9 unit, patrolling nearby, was the first to respond.
As the K-9 officer approached the house with his dog on a leash, the blonde ran out on the porch, shuddered at the sight of the cop and his dog, then sat down on the steps.
Putting her face in her hands, she moaned, "I come home to find all my possessions stolen."
"I call the police for help and what do they do? They send me a BLIND policeman."
"I won't be in here long."
He replied, "Well the judge did give you 6 years."
"Yeah I know, but I think the wife will break me out, she's never let me finish a sentence before."
Q: Why can't dinosaurs clap?
A: Because they are dead.
Buy and Sell
... and finally ... the art of stacking wood
Check out these artistic piles of firewood...
That's all for our mid-week wood news roundup.
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