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New Zealand Journal of Forestry (2015) 60(3): 26–34
©New Zealand Institute of Forestry

Professional Paper
What proportion of the small-scale owners’ estate in the North Island is likely to be harvested?

Bruce Manley *,1, Justin Morgenroth 2, Rien Visser 3 and final year BForSc students of 2014

1 Head of School and Professor of Forest Management, School of Forestry, University of Canterbury, Christchurch. Corresponding author:
2 Senior Lecturer in Geospatial Technologies
3 Rien Visser is Associate Professor of Forest Engineering
*Corresponding author.

Abstract: The small-scale forest estate, much of which was planted in the 1990s, will provide an increasing proportion of New Zealand’s harvest volumes over the next decade. However there are questions about the proportion of this estate that will be harvested. Some small-scale forests may not be economic to harvest because of size, location and terrain. As part of Management Case Study 2014, Bachelor of Forestry Science (BForSc) students estimated the delivered wood cost (DWC) – total of harvesting, roading, transportation and marketing costs – for a sample of 60 small-scale forest blocks in each of seven regions covering the North Island. This analysis took into account the size, slope, location and roading requirements of each block and assumed a rotation age of 28 years. There is a wide distribution of DWCs in each region. Between 0% and 2.9% of the blocks in a region (North Island average 1%) had DWCs that exceeded the maximum export log price for the four years to March 2014. An additional 1.2% to 6.7% (North Island average 3.5%) of blocks had costs that were less than the maximum export log price but exceeded the average export log price. Some 30% to 73% (North Island average 46%) of blocks had costs that were less than the average export log price but exceeded the minimum export log price. Consequently while there is very small proportion of small-scale blocks that are unlikely to be harvested, the viability of harvesting a substantial proportion of the small-scale estate is very sensitive to log prices. In addition, when typical silvicultural, overhead and land rental costs are included and average log prices are applied, 11% of blocks had a negative stumpage or a negative internal rate of return (IRR) indicating that replanting is unlikely unless above-average prices are achieved.
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