Forestry workers fear for future as prices plunge

Napier truck driver Andrew Northe says falling log prices could cost Hawke's Bay hundreds of jobs. Photo/Paul Taylor

Forestry jobs in Hawke's Bay are being lost and more are on the line as log prices fall.

Most logs exported from New Zealand are destined for China but a price correction after recent high prices has many in the industry wondering how low it will go.

Smaller operators are feeling the brunt of the fall - larger operators such as Pan Pac and Rayonier are still harvesting.

Rayonier managing director Paul Nicholls said many smaller operations had already shut down.

"We haven't got a good handle of how many crews have closed around the country, though we're talking quite a few," he said.

Rayonier has 18,000ha of Hawke's Bay's 135,000ha forestry estate.

"Our company hasn't changed - we can still sell everything we can produce and we are still making cash, though not always profit.

"We have scale on our side so we can do that. But if you are a single woodlot owner, depending on your location and cost of harvesting, you may decide to close your operation if you haven't already. Especially going into winter when costs go up because of the weather."

He said businesses had experienced differing price drops since the strong market peaked in March "but we have seen about 15 per cent to 20 per cent".

"By the time it sorts itself out we think there will be a 25 per cent drop."

Napier truck driver Andrew Northe said forestry crews were being laid off by log exporters "left, right and centre".

"We haul out from farm lots and the farmers have cancelled the harvesting because they are getting low prices," he said.

The main buyer of New Zealand logs, China, was over-supplied.

"We haul out for half a dozen forestry crews and they have all been laid off," he said.

"It is not just those workers that are being laid off, affiliated industries such as mine are coming to a stop.

"Even the guys at the port have had their hours dropped back.

"Pan Pac is different because they have their own market, mainly going to Japan, but the rest of us with wood going to China have been told, see you later."

He said he was grateful his employer was actively looking for more work for him, but until then he was being paid to sit at home.

"My boss rang me and said his advice was to look for another job and if things picked up in the future - we don't know when - he said he would like me to consider coming back.

"There are not many jobs available, which leaves me in a pretty sticky situation."

New Zealand Institute of Forestry (NZIF) councillor and Hawke's Bay forestry consultant Bob Pocknall said talk of widespread layoffs was "scaremongering" because future demand for people was assured.

"As an institute we place high emphasis on retaining infrastructure for the future and building on it," he said.

"It is well known we need to educate and build our staff resources."

Mr Pocknall is chairman of the organising committee for the NZIF annual conference currently under way in Napier. The conference was "an outstanding success both from a regional and national perspective".

The industry was in a very good position despite the log price correction, he said. "All of the estate jobs will just carry on. There will be a dent in returns but we have to focus on the long-term picture and that picture is still good.

"It is a matter of smoothing the troughs and capitalising on the gains when things improve."