Making the most cents out of timber harvesting
With annual timber production from the private forestry sector forecasted to increase to almost 3 million cubic metres by 2028 there are both challenges and opportunities for forest owners to get this rapidly expanding timber resource to market.
Timber harvesting is a process with many moving parts. Forest owners need to ask the right questions prior to both thinning and clearfelling, in order to maximise their forests’ potential. To help forest owners, Teagasc's Forestry Development Department ran two very successful conifer timber marketing events, entitled “Talking Timber”, in Charleville, Co. Cork and in Abbeyleix, Co. Laois on the 11th & 13th of June respectively.
The total attendance of more than 300 persons is a clear indication that these marketing events provided a welcome opportunity for farm forest owners to meet with and ask questions at 55 stands of timber buyers, harvesting contractors and foresters and to find out more about the timber selling process. The marketing days were aimed at giving forest owners a better understanding how the harvesting of their forest crop can be carried effectively and profitably.
In Abbeyleix, Minister of State Andrew Doyle TD highlighted the fact that almost 1 million cubic metres was produced by private forest owners in 2017. Most of this timber was processed in Ireland, helping to support 12,000 forest sector jobs, based mostly in rural areas. With annual timber production from the private forestry sector forecasted to increase to almost 3 million cubic metres by 2028 there are both challenges and opportunities for forest owners to get this rapidly expanding timber resource to market.
Professor Gerry Boyle , Director of Teagasc, pointed out in Charleville that the strong attendances at events demonstrates that forest owners recognise both the opportunity and need to build forest industry contacts, and to expand their own networks. Professor Boyle highlighted the need for forest owners to look after their crops, if they wish to maximise both the financial and environmental benefits of their crops.
Forest owners had previously highlighted the need for a suitable forum to engage with key players involved in the harvest and purchase of timber. In response twenty Talking Timber events have been organised by Teagasc since 2009 with the co-operation of the Irish timber industry and the Department of Agriculture, Food and the Marine (DAFM). Each event has included an outdoor demonstration organised by the Forestry Industries Ireland (FII), where attendees have the opportunity to view and discuss the quality of timber required by Irish sawmills. Similar to other farm-based products, the quality of the timber has a very important bearing on the market price offered according to sawmill representatives from Glennon Brothers and Murray Timber Group.
For the most recent Talking Timber events, the theme was “Making the most cents out of harvesting”. Short presentations from Teagasc, DAFM’s Forest Service, tax experts and forest owner representatives outlined some key issues regarding prices, felling licence applications, tax implications and how private forest owners can organise themselves effectively. Teagasc forestry advisors John Casey and Liam Kelly addressed critical forest owners’ questions such as how to prepare a crop for harvesting, what affects timber prices, the importance of having a harvesting contract and how important it is to know everyone’s role in the timber harvesting chain.
Frank Barrett, Department of Agriculture, Food and the Marine, highlighted the need for timely and fully completed felling licence applications. While foresters and forest owners might understand the operations and know what will happen on a harvesting site, other agencies may consider applications to be lacking in detail and this could potentially result in unnecessary delays. Since a productive 8 hectare plantation may generate €140,000 to €175,000 at clearfell stage, tax consultants for FDC and IFAC advised these potential revenues require tax planning in advance of harvesting. They also pointed out that since timber sales are income tax exempt and that the sale of trees is exempt from CGT but lands taxable, the transfer of wealth through forestry can be tax efficient.
Speakers from the Forest Owners Co-operative Society and the Laois Farm Forestry Group both stressed the need for the forest owners to organise themselves, to build networks and to access training. Both speakers welcomed the recently launched Forestry Knowledge Transfer Group (or KTG) scheme for 2019 and indicated their interest in organising new KT groups to provide forest owners with the essential tools to mobilise their valuable timber resource and to help maximise the income for their holding. It is hoped that the new KTG scheme will be as successful as the 33 KT groups in 2018, in which a total of just over 600 forest owners participated in groups delivered by both forestry industry and forest owner groups.