March 2023 NZ log market update

In Issue57 by FIEALeave a Comment

Opinion Piece, Marcus Musson, Director, Forest360

You don’t have to look too far to find a negative report on our industry when it comes to the effects of the recent biblical rain events on the mobilization of woody debris. The media will never let the truth get in the way of a good story and politicians will jump on any chance to get voters on side – even if they have very little idea about the subject they are pontificating about.

While the damage to the communities on the coast is devastating and we all empathise with everyone involved, pointing the finger squarely at forestry as the sole source of ‘slash’ is like referring to all utes in NZ as a ‘Hilux’s’ – part of the fleet, but there’s plenty of other brands in the mix. But that’s a story for another time.

The recent cyclones have obviously given the country a real hiding, and, as our teams operate in the rural environment, there are plenty of harvesting crews around the traps that are unable to operate due to road damage. This has seen a significant drop in the deliveries to the ports of Napier, Gisborne and Marsden with many exporters in those regions being caught with cargo-less vessels, which is less than ideal when you charter these on a daily hire basis.

To complicate matters, Gabrielle also laid flat around 6,000ha of forests in the Turangi/Taupo regions. Aerial photos show the destruction which looks like God’s big mitt has been swept across the land and the trees broken off as if they were spaghetti sticks. This area equates to around 2.5 million tonnes of logs and the time clock is ticking for the salvage of this volume as it gets pretty iffy past the 4 month mark once the trees have been blown over.

In this case, where the trees have been primarily snapped off rather than blown over with the roots on, the timeframe can be even shorter; as, once the bugs get under the bark, they are not suitable for any market other than pulp and firewood. The net effect of this windthrow is that there will be crews mobilised from around the regions to deal with this wind damage which will see a blip in the supply volumes from NZ. Whether this will be enough to offset the supply reduction from the other cyclone effected areas is yet to be seen as it’s likely there’ll be a lag of at least 4 weeks in this volume hitting the ports on mass.

The harvesting contractor workforce has been struggling with increased costs and erosion of working capital over the past few years with covid lockdowns, severe market fluctuations and endless winters. The inability for some to return to work post-cyclone will, unfortunately, be the end for a reasonable number.

This will undoubtedly reduce our harvest level going forward, especially in the Hawkes Bay and East Coast regions. To top it off: there were at least 40 log trucks drowned in the Hawkes Bay during the flood and around 25 of those have been written off (to date). This takes around 3,600 tonnes per day of cartage out of the system in the region, which is difficult to replace.

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Source: Forest360

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