Farmers turning waste land into forest

By TOM CLARKE

Small wood lots are likely to supply most new forestry plantings in the foreseeable future, says forestry consultant Barry Murphy.

While forest land is generally replanted after the trees have been harvested, few major new developments are taking place, he says. The big forestry companies have reached a level of investment they are happy with.

Mr Murphy has just joined Rotorua forestry consultants, Chandler Fraser Keating Ltd.

He says farmers - particularly with areas that are difficult to farm - see forestry as an alternative. This is where the major growth in new plantings is happening and these smaller growers will become increasingly important in providing wood flows.

"Corporates have probably developed a scale that they're comfortable with and maybe don't want to invest further into longer-term assets, where they have large amount of capital tied up," he says.

But if farmers have a land resource which is not productive with sheep or cattle, they see "they can get a dollar out of it by planting trees."

Mr Murphy says whether or not New Zealand needs further major plantings depends on its ability to sell wood products at the other end of the chain.

New Zealand harvests about 18 million cubic metres of wood a year, but in five years that will increase to some 30 million cubic metres.

"That's a pretty dramatic increase and a lot of it will occur in rural areas such as Northland," he says. "Handling it will certainly put pressure on the industry. Some of the skilled harvesting operators and the specialist equipment needed, especially for use in steep country, will be in short supply.

"It will also put pressure on regional infrastructures such as roading and port facilities, particularly in places like Northland, East Coast and Marlborough."

The industry is likely to remain largely cyclical, he says, because its products are subject to the normal ups and downs of commodity trading. However, many New Zealand forestry companies are trying to minimise those swings by moving closer to their ultimate customers.

Mr Murphy spent seven years with the Forest Service, during which he gained a bachelor of forestry science at Canterbury University. He then added an accountancy degree and joined Coopers & Lybrand, working in auditing.

That was followed with a commerce degree, a period in merchant banking, and a spell with the Tasman Lumber Company as an accountant. He returned to forestry management with Rayonier before joining Fletcher Challenge Forests Ltd as manager of the forest resources group.

Mr Murphy will be consulting on forestry projects throughout New Zealand and overseas.