FAQ's

Search Our Site

 

Find Our Most Frequent Questions Below

 OR Call 0800 PHS LOGS



Woodlot Related Questions

The value of your stand depends on a number of factors, including:
• Tree species
• Type of tree crop – managed vs unmanaged
• Market conditions at time of harvesting
• Distance to markets
• Harvesting terrain
• Length of access roading
Our managers will come out to your property and provide you with a free no obligation proposal.

The value of your stand relies heavily on total stand volume and log product types within the stand. For smaller stands it is often not worth the cost of paying for a full stand inventory and our woodlot managers can give you a visual stand description.
For larger stands we recommend a full MARVL stand description is carried out and we can arrange for this to be done.

The optimum harvest age for a well grown and well tended radiata pine is somewhere between 26 -30 years of age.
This typically is when the stand has generated maximum growth verses the cost of capital invested. It is also the time of the rotation where trees have maximised their pruned clearwood growth and structural sawlogs have developed the high density fibre required for domestic framing sawlogs. However a number of other factors require consideration.

  • If your stand is of poor quality then it may be better to harvest it early and replant with newer tree stocks and apply better management regimes to achieve a better second crop in the future.
  • Market pricing may be peaking for export logs and your stands fit this specification better than the domestic market.
  • Your trees may be overhanging fencelines creating a nuisance on the farm and leading to repair work and fence breakages that you don’t need. Additionally, these types of stands shade pasture leading to reduced grass growth
  • The area in trees may be taking up valuable land that would now be better off in grass, with the grass providing a better return on your investment than the trees.
  • Old untended shelter belts may be decreasing the visual look of your farm. Harvesting them now and replanting with slower growing amenity species may be a better option.

Confused? Call a PHS manager now for a free no obligation quote on the value of your stands and options on the best time for your harvest.

Woodlot Sales Related Questions

Typically there are two main types of log sales - Managed Sale and Stumpage Sale.

1. Managed sale

This is where the owner appoints a professional harvesting/marketing company to oversee all aspects of the project on behalf of the owner. The project is very transparent for the owner, with the owner receiving a detailed report of all revenues received and costs incurred from the project. The owner should receive a written estimate from the management company detailing revenues and costs, as well as an estimate of the bottom line return to the owner.
The owner pays the management company a fee for providing the service and this fee should be detailed prior to the harvest beginning. Fee structures are usually based on a $ per tonne figure, or a % of net revenue returned from the project.
Because it is an open book project, the owner takes on the market risk, and will make more money should the market rise during the operation but conversely may lose revenue should the market fall during harvest. We like to use the managed sale approach mainly because we feel it returns the highest revenues to the forest owner, while allowing the owner to retain a hands-on approach to the operation on their property.

2. Stumpage sale

The advantage of the stumpage sale to the forest owner is that they have the surety of knowing exactly the $ per tonne figure they are going to receive for every tonne of wood harvested from their forest.  However stumpage buyers will discount their buy price to offset grade, volume and market risk, and thus returns can often be lower.

There are three subcategories to a stupage sale:

  • Graded (pay as cut) sale: This is where the stumpage buyer pays a different price for each grade cut. The significant risk for the forest owner in this sale method is the stumpage purchaser’s lack of incentive to optimise the grade outturn.
  • Composite (pay as cut): This is where the stumpage buyer pays a composite price for all logs removed. While this produces an incentive to optimise grade outturn, it is likely to result in a price discount-to mitigate the buyer’s risk that the grade mix is inferior to that assessed before harvesting.
  • Lump sum sale: This is where a stumpage buyer pays a lump sum for all logs before the start of harvest. The buyer takes all the risk of grade mix and total recoverable volume, as well as market risk. This typically leads to the buyer heavily discounting their bid price to cover this risk.

Additionally the forest owner will typically need to pay a forestry company a fee to take their forest to the market, package the stumpage sale and oversee the stumpage process for them. We will arrange stumpage sales for forest owners if required, and/or purchase forests on a lump sum basis.


SALES
METHOD
RISK TO
FOREST OWNER
CASH FLOW TO
FOREST OWNER
PROBABLE PRICE
DISCOUNT FOR RISK
Managed Graded Log Sale Moderate  Favourable Low
Graded Stumpage High  Favourable Moderate
Composite Stumpage Moderate Favourable High
Lump sum Stumpage Low Very  Favourable Very high

Your trees have been growing now for 25 years and you are going to get one shot at optimising the return from your investment.

You need to consider:

  • Revenue – Is the current log market the best for your stand of trees, and will it generate the best sales revenues for your logs?
  • Seasonal issues – Does it fit in with other farm operations? Do you need to consider winter vs summer harvesting due to soil type?
  • Costs – You need to consider harvesting and trucking costs, along with roading costs and the costs of transporting in a harvesting crew.
  • Log value recovery - Does the harvesting crew you are using have the necessary skills to optimise each tree stem into the highest value log components, at the appropriate log quality?
  • Return on Investment – Should you wait another year, or will you make more having the money in the bank or some alternative investment?
  • Land use – Is your current tree crop the best use of your land going forward?

The final return from any harvest /market operation is a combination of all of the above.

Call 0800 PHS LOGS for independent friendly advice on your woodlot harvest.



Still need help? Call us at 0800 PHS LOGS

Top tips that cost you nothing!

  1. Get your trees assessed as early as possible to get an indication of volume and infrastructure requirements
  2. Get on our newsletter market update list
  3. Phone for a chat, use us to keep yourself informed
  4. Ensure you become a priority client so we can ensure we have the crew capacity to harvest your stand when it suits you
  5. If you are looking to make changes to your land, subdividing or building - ask us for advice; our harvest plan and infrastructure planning has the potential to help you add value to your land or future project
  6. Ask lots of questions and ask for references