Farm Forestry New Zealand

Sustainable indigenous forest management Where are we in 2012?

Alan Griffiths and Karlene Hill, New Zealand Tree Grower February 2012.

Trends in indigenous timber milling

The following table gives the volume in cubic metres of logs milled in each of the main categories provided for under the Forests Act 1949. As such they are not statements of the standing volume of trees felled or recovered, as the volume of logs removed from the forest is usually less than the volume measured as standing trees.

The difference is mainly waste from defective material left in the forest or off-cuts resulting from cutting to length or maximum payload weights for heli-lifting. The proportion of defective material not meeting commercial log standards varies between species groups and does not accurately reflect the volume of trees harvested. An indicative stumpage value is provided the table, based on average 2010 values.

About 75 per cent of the kauri and podocarp timber group milled was from West Coast Accord and SILNA forest. West Coast Accord forests are now under conservation management and there is very little harvesting and milling taking place on SILNA lands. Today, the majority of the timber production is from land under approved Sustainable Forest Management plans and permits as depicted in the next table.

The other milling provisions are minor provisions in the Forests Act allowing for the milling of timber from wind thrown and dead standing timber, trees felled for access ways, mining, public works, salvage and personal use approvals. The single biggest change has been in the harvesting and milling of podocarps and beech. Beech now comprises about 75 per cent of the indigenous timber harvested and milled in New Zealand. This is consistent with previous MAF forecasts that reflect the diminishing availability of podocarps.

Volume of logs milled
Year	Kauri and podocarps cubic metres	Beech cubic metres	Other hardwoods cubic metres	Total cubic metres	Indicative stumpage value
2000	41,631	16,458	981	59,074	$18.5 million
2010	5,517	10,148	111	15,776	$3.2 million

Volume milled by approval type
Year	SFM plans cubic metres	SFM permits cubic metres	Personal use cubic metres	Other milling provisions cubic metres	Total cubic metres
2000	5,488	2,898	474	50,214	59,074
2010	9,801	1,355	148	4,472	15,776

Area and approved harvest volumes under SFM plans and permits in late 2010
	Number	Area hectares	Podocarps and kauri cubic metres	Beech cubic metres	Broadleaved hardwoods cubic metres	Total cubic metres
SFM plans	48	49,132	3,324	68,942	6,283	78,559
SFM permits	394	57,056	47,288	30,755	21,219	99,263

The level of harvesting and milling timber from SFM plans is significantly less than the volumes approved for harvest, even allowing for proportional reduction from standing tree to logs at the mill. This reflects a lack of demand and market development for beech timber and timber products, partly a result of increasing importation of a range of cost competitive timber products from the Pacific Basin and elsewhere. Sadly this has led to a loss of a number of small to medium furniture manufacturers in New Zealand who have been unable to compete with these products.

Marketing and management opportunities

By the time this issue goes to print a workshop concluding a five year Sustainable Farming Fund project undertaken by the University of Canterbury will have been taken place. The workshop focussed on marketing opportunities for beech timbers.

As a minor part of the project MAF looked at the main geographic areas for privately owned beech forest in New Zealand and summarised these by region, area and species. Estimates were made of the timber volumes that may accrue to forest class and species. This data is presented for all private land that is potentially available for management and unfettered by covenants, and separately for Maori land. The report is available from the University of Canterbury, School of Forestry.

Areas of selected forest classes on private land
Region	Waikato BoP	Gisborne Hawke's Bay	Taranaki Manawatu Wanganui Wellington	Westland Tasman	Nelson Marlborough Canterbury	Otago Southland	Total
Total area	10,534	13,517	18,837	46,262	25,017	40,544	154,711
Maori land	8,800	11,736	2,754		152	6,185	29,627
Waitutu Inc						(11,500)	(166,211)

The results are interim, but provide a perspective about the existing and potential scale of the beech industry in New Zealand. In total there are about 165,000 hectares of privately owned indigenous forest in New Zealand with a major beech component. On this area there are an estimated 48 million cubic metres of standing tree volume, of which over 90 per cent are red and silver beech. About 20 per cent of this is on Maori land.

Annual gross increment of the beech component of this forest will vary significantly but often within the range two to five cubic metres per hectare each year. Sustainable harvests will be within the range one to four cubic metres per hectare each year. A harvest rate in this range for the area involved would be in the order of 350,000 cubic metres a year. This would be split almost evenly between red and silver beech, with a minor hard, mountain and black beech component. This is about five times the present level of approved harvests of beech under registered SFM plans.

There are a number of factors that will affect these estimates such as resource quality, accessibility, forest fragmentation along with the effects of rules in district and regional plans. However it is clear that, subject to these limitations and future markets, there is potential for sustainable management of beech forest in a number of regions at levels of production significantly higher than at present.

Overall and on Maori land, red beech and silver beech are by far the most important. They account for over 90 per cent of the beech component of the privately owned forest and on Maori land, 99 per cent of the beech resource.

What is the indigenous forestry sector worth?

In 2001 the value of the sawn timber from approved sources was estimated at $52 million a year if the total approved harvest was uplifted and sold. Applying an economic multiplier of 11 to the ‘delivered at mill’ log values, this translated to a total economic value of the indigenous forestry sector of $191 million and a forecast economic value in 2010 of $269 million.

Forecast production for 2010 was not reached, due in part to progressively increasing importations of price competitive furniture into New Zealand from Asia and China. The actual 2009/10 production of indigenous sawlogs was 16,000 cubic metres, of which around 9,000 cubic metres were beech and 6,000 cubic metres kauri and podocarps.

This is only about 25 per cent of the sustainable harvest available under SFM plans and permits. However, even at this reduced level, the value of the sawn timber is in the order of $11 to $12 million a year, and the economic value of the log production at this level is about $46 million a year applying the multiplier above. Although the production of indigenous timber is less than the approved annual sustainable rate by quite a margin, it appears to be stable and increasing slowly, mainly due to the efforts of the larger operators in the sector.

Where to from here?

There are some indications that the sector could enter a growth phase based on beech management. The management of the Longwood forests − the Waitutu Holding Company − is presently the largest production segment of the indigenous sector.

Sustainable Forest Products NZ Ltd is working in red and silver beech. It has management rights over about 5,000 hectares of private forest in Westland with approved sustainable harvests of red and silver beech of around 14,000 cubic metres.

In addition, following a protracted series of hearings, there are prospects for significant timber production from the 16,000 hectare Mangatu Incorporation forest in the East Coast under an approved SFM plan.A SFM plan forTuhoe forest in the Urewera is also in the offing. Both these forests hold substantial resources of both beech and hardwood – podocarp species.

There is in reality no shortage of forest to manage, rather the marketing innovation, entrepreneurship and ultimately timber demand needs to catch up. And as a worthwhile sector concentrating on high end use markets, there will continue to be opportunities to expand and build on the existing base.