The early 1990’s planting boom means NZ will have a major increase in wood supply from 2016 onwards.
Most of these plantings are owned by small scale growers who hold under 100ha.
New Zealand will have half a million hectares of uncommitted radiata pine wood supply. Nearly 50% of total supply. They are owned by 15000 small scale forest owners.
Infrastructural bottlenecks, shortages in machinery and skills are certain under the current scenario.
Medium and smaller growers will suffer most.
|Now uncommitted 1st rotation stands with a very uneven age class distribution & owned by 15000 small-scale proprietors.|
|Now mainly forest with normalised age classes that are owned by a few large corporates & are commited to local processing|
A near trebling in wood supply will depress prices from the domestic milling market. The export market can soak up the extra supply but -
Increased wood supply will place strain on ports and access to shipping space.
Increased wood supply will place increase demand for roading, logging and cartage crews resulting in higher prices for these services.
Increased strain on infrastructure will result in harvesting ‘bottle necks’ making it harder to meet market demand resulting in lower revenues.
Higher costs. Lower revenues = depressed profits.