WoodWeek 29 November 2017
This week, there was a statement from the Minister of Forestry Shane Jones who says worker safety will be an absolute priority in realising the Government's plan of planting one billion trees.
Looking to markets: NZ structural log prices rise to 24-year high and A-grade export logs hit a new record. New Zealand structural log prices rose to the highest level in 24 years and A-grade export logs hit a record as local mills compete with the export market to secure supply for the domestic construction market amid strong demand from China.
As we all know Douglas fir is the second most commonly planted commercial tree species in New Zealand. Thanks to our Scion-tists, forest owners and managers who grow Douglas fir now have a better understanding of how they might improve the performance of its timber.
Back to announcements from our new Government leaders: Associate Finance Minister David Parker and Minister for Land Information Eugenie Sage have issued new directives to the Overseas Investment Office as the first step to strengthening the overseas investment regime. Before Christmas they will be introducing legislation to ban foreign buyers of New Zealand’s existing houses.
Finally, of particular relevance to the forest and wood products industry is this news included in the OIO directive update: “The Government wants to see an increase in value added processing in the forestry sector and Minister Shane Jones will be making a separate announcement on this,” Parker added. We've got that story for you as well today - hot off the 'wireless network'.
This week we have for you:
Guest Editorial - How to plant 50M treesOnce again Peter Clark, CEO of PF Olsen is the source of practical insight into how our industry and the Government can work together to achieve the new vision of lifting out forestland coverage significantly.
Clarky’s Comment – A billion trees – The plan?
The plantation forest sector already plants about 50 million trees a year, mostly in restocking following harvest. If we count these towards the 100 million trees a year the new ambition is for an additional 50 million a year as new planting. That is entirely achievable. In the mid-1990s the private sector planted up to 100 million trees/annum as new planting, on top of restocking. But since then pastoral land values have doubled and in some cases trebled. That creates a challenge as the cost of land has a major impact on the investment returns from forestry.
Step 1. Be clear on the objectives. Any tree anywhere is not a plan that will meet my understanding of the main objectives, being:
2. Helping to meet NZ’s Paris Accord commitments, particularly in the 2020 – 2030 decade.
3. Land use change that supports water quality improvements.
Step 2. Put in place initiatives to address the blockages. Land, labour and tree stocks are the 3 main blockages to overcome. Of those land is by far the most challenging. To qualify under the Paris Accord the new forest must be on pasture land. Plantation forest owners do own pasture land. The Crown has some that may be suitable but by far the bulk is owned by farmers and iwi. These private landowners must be convinced that planting trees on their lands is a good idea.
Entry of agriculture in the ETS is a good start. That gives farmers a good incentive to look at the tree planting solution. Now with the ETS, especially if averaging is introduced, there is no need to wait 25 or more years for a cash return. Averaging increases the “safe carbon” on conversion of pasture to forest, and provided harvested trees are replanted it removes both the harvest payback liability and the risk of NZU repayments following a catastrophic loss.
Cash can flow after 5-6 years. Most hill country farmers do not yet appreciate that in addition to offering a natural hedge against a rising carbon price, well-located and managed woodlots are a more profitable land use than stock on that same land. Provision of information and extension services to farmers an iwi would be a good use of some Crown funding.
Labour for planting is in short supply - Adding an additional 50,000 ha cannot be achieved in year 1, even if we had the land and the tree stocks. There will need to be a build-up. In the meantime some introductory forestry training for young adults that teaches not only planting skills but also healthy living, work ethic, in some cases literacy, and keeps those young adults drug-free could be supported by the government.
Planting takes place over 4-5 months during winter. There are some all-year jobs in thinning and pruning of trees but this will not accommodate all those involved in planting. In addition to full- time roles for kiwi workers I anticipate a need for some seasonal workers from the Pacific Islands during the winter months. There will not be many extra seedlings available for 2018 planting as the 2018 seedling crop was already sown at the time Labour announced the billion tree policy. But nurseries can gear up to double production within 1 – 2 years so we can have seedlings available in 2019 and 2020 onwards.
But nurseries will only invest so much on speculation of sales; that also depend on land being available and ready for planting. They need firm orders before buying and sowing seed the year before planting. The government has a role to coordinate land availability, put landowners in touch with nurserymen or otherwise contract seedlings to be grown to ensure sufficient supply of seedlings.
But what about seed supply? What species and what genetics? The first 2 objectives suggest that most of the new planting should be in species that will:
2. Eventually support expansion of, and additional employment in, wood processing.
3. Contribute materially to carbon sequestration during 2020-2030.
That means fast-growing commercial species of the best genetic parentage known and available. Natives will have their place, especially for the water quality objective, and where commercial timber extraction is not viable or would risk serious loss of soil, such as on much of the land zoned red for erosion susceptibility under the new National Environmental Standard for plantation forestry.
Step 3. Support biosecurity, regional infrastructure, R&D, industry skills training and careers promotion. Landowners will gain restored confidence in the sector and in establishing forests on their land if they see the government supporting those activities that improve the profitability of growing trees. In particular the regional roads in Northland and East Coast and to a lesser extent other regions, are broken. So is the funding model for these roads. Taxpayer spending on these roads and other fundamental enablers benefits the whole regional economy. It is money better spent than on being a long- term owner of trees. There is private capital available for planting trees if the investment is profitable – from landowners and investors, including foreign investors.
Owning trees is very capital intensive. The Government has legitimate roles in showing leadership by planting some trees itself, and certainly in enabling the support infrastructure, but should have an exit plan for any trees it does establish using taxpayer funds. The greatest leverage on taxpayer funds employed will be in setting up the investment environment and encouraging the private sector to invest in tree planting.
Source: PF Olsen Wood Matters - Issue 103
Minister welcomes high-quality forestry investmentHigh-quality forestry investment welcomed - Forestry Minister Shane Jones says overseas investment in forestry that brings genuine benefits to New Zealand’s economy and its environment will be welcomed by the Government.
Mr Jones says he is pleased with the inclusion of a Forestry Directive in the new Ministerial Directive Letter issued to the Overseas Investment Office, which sets out the Government’s policy approach to overseas investment in sensitive New Zealand assets.
“The inclusion of a specific directive for forestry recognises the importance of forestry to the New Zealand economy and regional communities,” Mr Jones says.
“As part of the coalition agreement, this Government has committed to an ambitious tree planting programme that will require a partnership between the Crown and the sector itself. High-quality overseas investment can certainly help us achieve this goal.
“Forestry, and the processing of forest products, are significant sources of employment in our regions and we want to build on that to get more people into a sustainable workforce."
“I’ve heard first-hand from the industry the value of good overseas investment and the Forestry Directive recognises there is a role for overseas investors to play. However, we want to encourage value-added wood processing to generate jobs and other benefits for our regions."
“The new directive for forestry directs the Overseas Investment Office to place high importance on increased processing of primary products and the advancement of the Government’s policies when assessing applications for consent."
“It also emphasises that Ministers expect the Overseas Investment Office to impose conditions on consent where appropriate – for example, a requirement for the overseas investor to enter into a supply arrangement with a local processor,” Mr Jones says.
The letter recognises that conditions imposed on forest land may need to be for longer periods given the often long-term nature of these investments.
“Forestry has an important role to play in many of the Government’s priority areas – enhancing regional development, improving water quality, reducing carbon emissions and creating jobs – and I’m looking forward to seeing the sector prosper in the coming years,” Mr Jones says.
Want denser Douglas fir?Douglas fir is the second most commonly planted commercial tree species in New Zealand. Forest owners and managers who grow Douglas fir now have a better understanding of how they might improve the performance of its timber thanks to work carried out at Scion.
The research team looked at site-related factors that could influence wood density such as climate and soil fertility. They pulled together data on wood density collected over more than 50 years to assemble a dataset with data from around 10,800 trees. These data were “crunched” to develop models to explain the variation in wood density that occurs within and among trees.
They found that breast height outerwood density was higher in warmer areas. A similar relationship is seen for radiata pine where it is thought that warmer temperatures allow a longer period of production of denser latewood during the growing season. Soil fertility (ratio of carbon to nitrogen) was also found to affect wood density with trees grown on more fertile soil tending to have less dense wood. A similar relationship is also seen for radiata pine.
Silviculture factors such as stand density did not seem to have a great effect on wood density, which was a somewhat unexpected result. However, stand density is still expected to affect the mechanical properties of sawn timber, particularly through its effect on branch size.
Looking within trees, the pith to bark profile of wood density differs from that in radiata pine. It is high near the pith, decreases over the first few rings before increasing again and stabilising at around ring 30 from the pith. Density also tends to be higher at the tree base than at its top.
The wood density models developed in this work have been incorporated into the Forecaster growth and yield simulator. Using this, forest managers will be able to devise strategies that take into account the effects of site and silviculture on Douglas fir wood density to achieve desired end product outcomes.
Contact email@example.com for more information.
Jones: Worker safety is top priorityMinister of Forestry Shane Jones says worker safety will be an absolute priority in realising the Government's plan of planting one billion trees, and if he has his way road damage due to logging trucks will also be significantly reduced.
While the percentage of native trees to plant is yet to be decided, Shane Jones says forestry worker safety is paramount.
"Yes workers have a level of responsibility when it comes to their safety but beyond that, it's up to companies to have policies in place and know the circumstances, the number of incidents and extreme dangers that have occurred when safety measures weren't enough."
Jones' stance comes after calls from Maori shareholders themselves as well as the Labour Deputy Leader, for more top-tier industry and shareholder accountability.
During the Native Affairs Election Aotearoa 2017 debates Kelvin Davis said, "One of the issues is shareholders who don't have any skin in the game other than they're up here, they're putting pressure on the contractors to actually do more work and work harder and faster and if some of the responsibility fell on those people right at the top, then we might see a bit more safety."
Source: Maori Television
AgriHQ: Log prices still risingNZ structural log prices rise to 24-year high, A-grade export logs hit record - New Zealand structural log prices rose to the highest level in 24 years and A-grade export logs hit a record as local mills compete with the export market to secure supply for the domestic construction market amid strong demand from China.
The price for structural S1 logs increased to $130 a tonne this month, from $128 a tonne last month, marking the highest level since 1993, according to AgriHQ's monthly survey of exporters, forest owners and saw millers. Export log prices lifted between $2-to-$5 a tonne for the majority of grades, with the price for A-Grade logs touching $128 a tonne, up from $127 a tonne last month and the highest level since AgriHQ began collecting the data in 2008.
New Zealand is experiencing strong demand for its logs from China, which has clamped down on the harvesting of its own forests and reduced tariffs on imported logs to meet demand in its local market. AgriHQ said Chinese demand for softwood logs remains strong, lifting back to record levels in the latest data for September with Chinese imports of New Zealand logs currently tracking 10 percent ahead of last year.
"Those trading in the domestic log market are continuing to receiver near-record returns and there's nothing to signal that this situation will change anytime soon," said AgriHQ analyst Reece Brick. "Looking forward, all prospects will be determined by the direction the export log market takes."
Brick said wharf gate values climbed through October and early November and will likely hold high until the Chinese New Year period. Also known as the 'spring festival', the Chinese New Year falls on Feb. 16 next year, and the festival will last until March 2, about 15 days in total. As an official public holiday, Chinese people can get seven days' absence from work, from Feb. 15 to 21.
"Beyond that point, it's still a wait-and-see situation," Brick said.
He noted the latest situation and outlook report released by the Ministry of Primary Industries continues to shed a positive light on forestry's prospects over the next two years.
"They predict strong Chinese interest in logs over the short-medium term, underpinned by its ban of commercial logging of natural forests, falling Russian log supplies, and a 2 percent reduction on its imported log tax."
Brick said "the only proper negative" when it comes to the export market is shipping rates, which are rising faster than log values. However, this was being masked by a weaker New Zealand dollar, he said.
"There is still a level of uncertainty as to whether shipping rates have reached their peak or have a little more upswing to come," Brick said.
Still, he said "in terms of market fundamentals it is all still quite positive."
Source: BusinessDesk via Scoop
Log Max release new simulatorLog Max Training Simulator - Log max offers virtual simulator training in a low- stress environment for trainers and trainees, more importantly, simulators reduce impact on productivity by not using actual machines on-site.
The Log Max simulator is available in two setups, a desk mounted version or a fully integrated system.
Click here for more details on the new simulator.
PF Olsen Log Price IndexThe PF Olsen Log Price Index for November increased three dollars from the October index figure and is now at a $127 which is a record equal high with May of this year.
The index is currently $5 higher than the two-year average, $12 above the three-year average and $16 higher than the five-year average. Since November last year the index has ranged from $120-$127. This indicates how stable the markets have been over this period.
Forest Harvesting Optimisation Project ApprovedThe Australian Industry and Skills Committee (AISC) has approved the Case for Endorsement for the updated and revised units of competency, along with a Companion Volume Implementation Guide. The revised units will be released on to training.gov.au by the end of 2017, contained within the FWP Forest and Wood Products Training Package. Once published on training.gov.au, the units will be available for use by registered training organisations (RTOs).
Units in this project were reviewed and developed in line with current forest harvesting optimisation technology and the impact on utilisation processes. This process was led by the Forest Management and Harvesting Industry Reference Committee (IRC) and guided by an industry based Technical Advisory Committee.
Two new units were developed:
The following units were updated:
Copies of the final documents that were endorsed by the AISC can be viewed on the project webpage, by following this link.
New health and safety toolkit availableNew Government-endorsed health and safety toolkit now available SafePlus, a new Government developed and endorsed health and safety toolkit, is now available to all New Zealand businesses, and is set to help lift the health and safety performance in workplaces across the country.
SafePlus currently consists of three products: Resources and Guidance, the market-delivered Onsite Assessment and Advisory Service and the Online Self- Assessment tool.
Malcolm MacMillan, SafePlus Programme Manager says, “New Zealand has an unnecessarily high rate of serious workplace accidents. The social and economic cost of this in New Zealand workplaces is conservatively estimated at $3.5 billion each year, and inflicts an enormous emotional toll on the people affected. We need a change in our workplace health and safety culture and SafePlus provides an important toolkit to achieve that change.
“SafePlus digs deep into a business to assess workers practices, behaviours, attitudes and culture towards health and safety, this behavioural approach helps them identify opportunities and strive for excellence.”
The launch of the Onsite Assessment and Advisory Service includes the SafePlus Register of Independent Accredited Assessors so businesses will now be able to directly engage with assessors. The Accredited Assessors have been trained to deliver SafePlus and carry sector specific and generalist experience. This public register can be found at www.safeplus.nz
Mr MacMillan says, “SafePlus Accredited Assessors are an essential component of the SafePlus initiative. The services they provide during an Onsite Assessment and Advisory Service will change the way businesses view their health and safety in the workplace.
“Accredited Assessors use an approach that focuses on the people and their practices rather than written policies and procedures. They engage at all levels of a business, from senior leaders to front line workers, then use these insights to measure a business’s health and safety performance, and provide them with advice and guidance.”
SafePlus is a voluntary performance improvement toolkit that defines what good health and safety looks like in the workplace, and sits above minimum legal compliance. It is a joint harm prevention initiative developed by WorkSafe New Zealand, ACC and the Ministry of Business, Innovation and Employment (MBIE).
SafePlus has been developed in direct response to the Independent Taskforce into Health and Safety, and the Working Safer Reforms. Working Safer is aimed at reducing New Zealand’s workplace injury and death toll by 25 per cent by 2020. The Act’s key emphasis is on everyone in the workplace being responsible for health and safety.
For more information visit safeplus.nz
New directive for Overseas Investment OfficeNew directive for the Overseas Investment Office announced - Associate Finance Minister David Parker and Minister for Land Information Eugenie Sage, have announced today the strengthening of New Zealand’s overseas investment regime, by issuing a new Directive Letter to the Overseas Investment Office.
The Directive Letter sets out the Government’s policy approach to overseas investment in rural land. The directive does not change the rules regarding acquisitions of significant business assets.
“The existing directive is too loose,” says Mr Parker. “It only applied to very large farms more than 10 times the average farm size.
“In practice this meant restrictions in sales generally applied to sheep and beef farms over 7,146 ha or a dairy farm more than 1,987ha.
“This new directive tightens how we assess overseas investment in New Zealand to ensure authorised purchases provide genuine benefits.
“Too often we see investors buy a New Zealand farm, and then use existing systems, technology and management practices which don’t substantially add anything new, or create additional value to our economy.
“We want to make it clear that it is a privilege to own or control New Zealand’s sensitive assets, and this privilege must be earned. We campaigned on these changes and they won’t come as a surprise to potential investors,” says Mr Parker.
“Today’s announcement raises the bar for overseas investments in sensitive land by replacing the existing large farm directive, with a new and much broader, rural land directive which applies to all rural land larger than 5 hectares other than forestry,” says Ms Sage. “The large farm directive previously only applied to very large farms.”
“This directive acknowledges the importance of jobs, new technology and business skills, increased exports, processing of primary products and oversight and participation of New Zealanders,” says Ms Sage.
The new Directive Letter will come into force on 15 December 2017. All applications which are being assessed by the OIO at, and from, this date will be subject to the new directive letter.
Applications which have not been determined by 15 December, will be given a fair opportunity to make additional submissions under the new approach. The Overseas Investment Office continues to accept and process applications, and both Ministers and the OIO are making decisions on applications.
“This Directive Letter is the first step to strengthening the overseas investment regime,” says Mr Parker.
“We will be introducing legislation to ban foreign buyers of New Zealand’s existing houses before Christmas and other work to strengthen the Overseas Investment Act is underway.”
“The Government wants to see an increase in value added processing in the forestry sector and Minister Shane Jones will be making a separate announcement on this,” he says.
... almost finally ... for all you divers out thereLook at this - seriously ... the starfish/paua theory.
A paua diver claims he has accidentally discovered a way to make the shellfish delicacy spawn during harvest and boost paua numbers significantly.
Phil Walker fishes commercially in what is known as Area 7, stretching from Kahurangi Point on the West Coast to Clarence River on the east.
Walker said his daughter asked him about three years ago to bring a starfish home for her to take to school. The diver said when he put the starfish in with his paua catch, clouds of spawn were released.
"The starfish seemed to stress the paua, and they released the spawn," Walker said. "I've been doing it for more than three years now and I'm seeing much bigger stocks coming away in those areas.
Want to know more?
... and finally ... kids say the darndest things
A Kindergarten teacher was observing her classroom of children while they were
drawing. She would occasionally walk around to see each child's work.
Have a safe and productive week.
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