Value of a managed forest farm
GOOD management is the key to getting the best returns from farm crops.
Trees can be a complementary and valuable crop on the farm that will deliver if well planned and managed.
Michael Owens is a progressive farmer from north Kilkenny. Michael runs a spring calving dairy herd along with some beef cattle in County Kilkenny, milking 125 cows on a holding of almost 80 hectares.
Having trained in forestry, Michael’s late father planted a small section of his farm 29 years ago consisting of 2.5 hectares of mainly spruce.
While forestry is certainly not the main farm enterprise, Michael has recently reaped the rewards of his late father’s decision, having overseen the management of his forest over the years. It has matured rapidly following two thinnings, in 2010 and 2014. Michael harvested his farm forest crop in October 2018.
According to Michael: “We are very happy with the way the harvesting worked out.
“The whole job was done in three days; it has produced over 750 tonnes, and the price we will receive is about €55 per tonne, perhaps even more... It will cost over 10 per cent of the money we receive to replant; the remainder is tax-free anyway.”
Timber prices can vary over time and according to a range of factors such as tree quality, forest type, wood-lot size and access. Managed forests are exempt from income tax but subject to relevant USC and PRSI charges.
With good management, forest owners can have a very valuable additional crop on their land. Michael was impressed with the timber and financial return from his forest, explaining that “It yielded pretty well, it was fairly straight and the product breakdown is 45 per cent sawlog, 37 per cent pallet wood, and the remainder is going to pulp. So that’s pretty decent for forestry.”
Michael is also very aware of the need for protection and enhancement of his farm environment.
“Number one, the weather was super, the ground was bone dry, there wasn’t a mark on the ground, but the brash was piled up in rows along the site and the forwarder (collecting the timber) travelled along these,” he says.
“Basically, it doesn’t touch the ground and didn’t impact with the soil in any way.”
The existing broad-leaf trees in the forest were also retained, and Michael will replant a further 10 per cent through the site for environmental and aesthetic reasons.”
Michael can now make plans for his forestry returns. He is aware that “When you are farming, you have a lot of options for what you are going to do with money”. Michael’s family is top of his priority list and he is also keen to invest in their future:
“I have four small children and hopefully they might go to college,” he says.
Many farmers like Michael could consider another crop on the farm without significant impacts on current enterprises. Through whole-farm planning, forests can fit into existing farms and provide options on appropriate land parcels.
In this way, forestry premiums combined with retained basic payments and income taxfree timber returns can provide additional income streams on the farm.
For a younger farmer, forestry may be an ideal way to help pay off that mortgage on a new family home or help in relation to necessary farm investments. And for older farmers, a forest makes for an ideal pension pot.
Michael is looking forward to getting his forest planted again and seeing the next forest establish and rapidly grow: “Hopefully when I am about 70 I will get some retirement money out of it,” he says. For further information, contact this writer at (087) 224 2283 or