Pinus radiata farming is barking up the right tree
Farming pine plantations profitably isn’t just a road to riches for corporates, Andrea Fox discovers.
It’s a bit of a mystery to Malcolm Mackenzie why more hill country farmers don’t see that money does indeed grow on trees.
The Otorohanga farm forester reckons when prices are good, earnings from a pinus radiata harvest on challenging land can beat hands down those from sheep and beef farming the same contours.
‘‘Of course it depends where you are and how the trees are managed, but we netted slightly less than $55,000 per hectare [this year] at a time of good prices,’’ says Mackenzie, who with wife Alison has a 57 hectare picturesque rolling and gullied property with panoramic views on Owaikura Rd, north of Otorohanga. The couple have about 17ha of hill ridges in radiata, planted in separate blocks.
They are also partners in two Coromandel forests. One has just been valued and the return put at $25,000/ha, which might be ‘‘a better figure to go on’’ Mackenzie says. But it doesn’t properly reflect the potential earnings and such valuations tend to be conservative, he says.
President of the Waitomo Farm Forestry Association, which has membership in the low 20s, Mackenzie is an eyewitness to the decline in the sector.
‘‘Membership used to be significantly more and nationally, it has also diminished. Farm forestry was very popular in the 90s when log prices were high but it’s declined since.’’
Mackenzie cuts right to the chase on why growing radiata on marginal pasture hillsides should be considered.
‘‘The primary benefit is economics. They are far better than sheep and beef farmers will acknowledge. I can understand to some degree that most farmers don’t think 25 years ahead, but most stay on their farms that long and more.’’
Other benefits are soil conservation – radiata can hold up hillsides and stop soil run-off into waterways – and as a financial tool in succession planning.
‘‘A big advantage is providing capital to the retiring generation.
‘‘There’s still a lot of New Zealand hill country that should be under trees instead of pasture, primarily for soil conservation.’’
Radiata is generally harvested at 25 to 30 years old, but because these trees grow fast, Mackenzie has been known to call in the cutting contractors before this time, although he says millers prefer more mature wood, which improves in density as it ages.
The Mackenzies switched from cattle farming to dairy grazing with farm forestry 30 years ago because the maths said it was more profitable than farming their own livestock. They’ve done three harvests at Owaikura Rd, with the most recent being around 3500 tonnes from an area of 5.2ha. The net $55,000/ha harvest yield was in February-march this year. Good money can also be made from peeler logs, says Mackenzie. These are logs peeled for plywood once bark is removed.
The farm’s proximity to sawmillers in the King Country and greater Waikato region assists profitability, keeping trucking costs down. More than 30 per cent of the farm’s logs are processed locally. Te Kuiti’s RH Tregoweth is a major buyer of logs from the Mackenzies and other growers in the district. Creating and upgrading on-farm roads for the trucks is also a cost consideration.
Mackenzie says good management of radiata crops is important for profitability and farmers should be prepared to pay a professional harvest manager. He’s happy to pay a 4 per cent commission to Rotorua’s Wood Marketing Services to manage the sale of harvested wood, a process which starts up to three years before harvest date to ensure contractor availability.
‘‘You hear some horror stories about bad contractors which is why it pays to use a management company. It’s their responsibility to do a good job. It’s money well spent especially given health and safety laws and it’s another layer of expertise you can’t expect landowners to have.’’
While marketing of radiata is an established industry easily accessed by farm foresters, the same can’t be said for Tasmanian blackwood, a large attractive tree yielding beautiful hardwood for bench tops and furniture.
The Mackenzies have 20 hectares of them. They’re a picturesque feature of the approach to the farm, which has 1.8km of road frontage, and at 30-plus years old are ready for harvest. But buyers are scarce as hen’s teeth.
The blackwoods were planted from 1985 after the couple asked the regional council what trees to plant on a long steep and eroding ridgeline at the narrow front of the farm.
‘‘I was pretty ignorant about things forestry then and took advice from the regional council. Blackwoods were the flavour at the time. They thought 20 hectares of blackwoods was a good idea. Now I know it wasn’t from an economic point of view,’’ says Mackenzie.
The market in New Zealand is extremely limited. The Mackenzies have just two steady customers, specialist benchtop makers, and make small one-off sales to a furniture maker. Just 20 trees can be harvested a year and these are taken from the edge of the plantation (trees grow faster on the edge).
While the returns on this blue ribbon wood are good – the Mackenzies receive $3000 to $4500 per cubic metre of dried wood – the lack of an established market and people to manage harvests is a headache.
‘‘There’s a quite a bit of blackwood around because it was the flavour of the time, but not all have been managed well. I don’t profess to have managed them well because they are very demanding of pruning. Pruning is generally annual but you have to start earlier than with radiata, and because they are slow growing you may still be pruning at 10 years when with radiata you’re finished at six to seven years old.’’
With the next radiata crop just seven years old, there will be a big gap before the logging trucks move in again to Owaikura Rd. There’s new radiata planting to be done to replace trees harvested earlier this year, and Mackenzie intends to concentrate on blackwood marketing.
Not just for his own pocket, but for others who planted the trees in the 1980s.
‘‘I’ve been helping other farmers with reasonable success but in very small quantities. It makes sense to take a co-ordinated approach.’’
Top-grade blackwood has minimal knots and makes attractive flooring as well as benchtops and furniture. Secondgrade wood can be used for wall panelling and rustic furniture.
The Mackenzies bought their farm in 1980. Hastings-raised Mackenzie was at the time a farm adviser for the-then Ministry of Agriculture and Fisheries. Alison, born and bred in Masterton, was a nurse. She has recently retired as a midwife.
The farm was nearly 100ha in total and was intended to be a financial stepping stone to a larger property. They subsequently sold off 40ha and a lifestyle block.
They were farming sheep and beef and decided to stay after deals fell through. Mackenzie got an itch for farm forestry on challenging contours so sheep gave way to cattle, and later to dairy grazing only. These days a neighbour leases the pasture areas for young dairy stock.
The free-draining Maeroa volcanic ash soil property is much more fertile than trees need, says Mackenzie, who went on to become a farm forestry adviser and about 10 years ago joined the conservation staff of the QEII Trust as a regional representative, monitoring existing and new tree and bush covenants.
He left that job 18 months ago and is now retired. All costs, including fertiliser, associated with grazing are met by the neighbour but Mackenzie is happy to rotate stock – 40 heifers at the moment but soon to rise to 80 with new calf arrivals.
Meanwhile, he’s cranking up the wood-marketing efforts, enjoying travel with his wife and time with six grandchildren, and eyeing the very big job of replacing willows and poplars planted in farm gullies in the early days with radiata.