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Eucalyptus nitens, recovery and economics of processing 15 year old trees for solid timber

Report Date: May 2015

Author: Dean Satchell, Sustainable Forest Solutions, R.D. 1 Kerikeri, Northland 0294
+64 21 2357554


Special thanks and acknowledgement go to:

  • MPI Sustainable Farming Fund
  • Neil Barr Farm Forestry Foundation
  • John Fairweather Specialty Timbers
  • North Canterbury, South Canterbury, South Otago and Southland branches of NZFFA
  • NZFFA Eucalyptus Action Group
  • NZFFA Research committee
Appendix 1: Assumptions in Discounted Cash Flow Analysis
Appendix 2: Sawn timber price estimates
Appendix 3: Literature review - Value-based survey pricing methods
Appendix 4: Literature review - Estimating profitability of growing E. nitens for solid timber production
Appendix 5: Sawmilling method
Appendix 6: Flooring price survey instrument
Appendix 7: Survey results table
Appendix 8: Survey analysis
Appendix 9: Wood physical properties, test results
Appendix 10: Glossary of terms
Appendix 11: Case study stand plot
Appendix 12: Comparison between levels of internal and surface checking
Appendix 13: Air drying experiment
Appendix 14: Sensitivity analysis

Appendix 2: Study Sawn Timber Price Estimates

In this page:


1. Flooring timber price estimates

The survey from which price estimates were based was undertaken in September 2014.

Wholesale prices for Victorian ash

A search of public domain information did not reveal wholesale prices according to grade and board size for Victorian ash flooring timber in New Zealand or Australia. Reporting wholesale prices for hardwood timber requires merchants to disclose the prices they pay for timber, but enquiries were mostly not successful. However, one price was disclosed for Victorian ash flooring timber from VicAsh Australia, being the price NZ wholesalers pay for Select grade 108 x 19 T&G flooring, landed in New Zealand. This was NZ $4.09 / lineal metre at 20 May 2014 (Brett Bould, VicAsh, pers. comm.)

The margin for retail prices from wholesale are considered to be approximately 30% (Duncan MacLeod, URS, pers. comm).

Graded-pairs comparison survey method - flooring board profiles

The graded-pairs comparison price discount for the comparison product from the reference product = 5.56%
Graded-pairs price for comparison product (E. nitens, select grade, nominal 125 mm width, >1200 mm length) = $3.86

Graded-pair price premiums or discounts for individual quality characteristics when summed form each product profile’s price discount or premium from the price of the reference product. Prices per nominal cubic metre of graded timber were calculated for each product profile and are presented below:

Wholesale Price Estimates for E. nitens Flooring Profiles, Graded-Pairs Comparison Pricing

 
Board Profile Length 300 - 600 Length 600 - 1200 mm Length >1200 mm
100 mm Width, Select/Clears Grade $1.15 $2.54 $2.96
100 mm Width, Standard Grade $0.77 $2.07 $2.49
100 mm Width, Feature/High Feature Grade $0.44 $1.65 $2.08
125 mm width, Select/Clears Grade grade $1.86 $3.44 $3.86
125 mm Width, Standard Grade $1.37 $2.82 $3.25
125 mm Width, Feature/High Feature Grade $0.94 $2.28 $2.70
150 mm Width, Select/Clears Grade $2.69 $4.48 $4.91
150 mm Width, Standard Grade $2.07 $3.70 $4.13
150 mm Width, Feature/High Feature Grade $1.52 $3.01 $3.44

 

Constant-sum allocation survey method - flooring board profiles

The constant-sum allocation price discount for the comparison product from the reference product = 1.75%
The constant-sum allocation price for the comparison product (E. nitens, select grade, nominal 125 mm width, >1200 mm length) = $4.02

Constant-sum price premiums or discounts for each profile were derived from the utility for that profile as a percentage of utility for the comparison product. Prices per nominal cubic metre of graded timber were calculated for each product profile and are presented below:

Wholesale Price Estimates for E. nitens Flooring Profiles, Constant-Sum Allocation Pricing

 
Board Profile Length 300 - 600 Length 600 - 1200 mm Length >1200 mm
100 mm Width, Select/Clears Grade $2.30 $2.58 $3.04
100 mm Width, Standard Grade $1.98 $2.26 $2.72
100 mm Width, Feature/High Feature Grade $1.65 $1.93 $2.39
125 mm Width, Select/Clears Grade grade $3.09 $3.44 $4.02
125 mm Width, Standard Grade $2.69 $3.04 $3.61
125 mm Width, Feature/High Feature Grade $2.27 $2.62 $3.20
150 mm Width, Select/Clears Grade $3.89 $4.31 $5.00
150 mm Width, Standard Grade $3.40 $3.83 $4.52
150 mm Width, Feature/High Feature Grade $2.91 $3.33 $4.02

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2. Laminated panel timber prices

Prices for timber stock used for constructing laminated panels were estimated as product residual values. Costs of constructing panels were deducted from the wholesale prices panels were sold for.

Wholesale Prices for Panel-Laminating Profiles as Residual Values

 
Board Profile Length 300 - 1500 mm Length >1500 mm
50 mm Width $1.35 $2.38
75 mm Width $2.03 $3.56

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Disclaimer: The opinions and information provided in this report have been provided in good faith and on the basis that every endeavour has been made to be accurate and not misleading and to exercise reasonable care, skill and judgement in providing such opinions and information. The Author and NZFFA will not be responsible if information is inaccurate or not up to date, nor will we be responsible if you use or rely on the information in any way.

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