Case study reveals forestry on coastal block near Bulls beats sheep and beef farming on profitability

While the study showed the average forestry contribution was 45 per cent, it made up 49 per cent of total gross income over the 10 years.

A case study on a coastal block near Bulls has crunched the numbers and shown farm forestry can beat sheep and beef production hands down on profitability even when grown on the poorer parts of the farm.

A summary of returns from main operations (forestry and sheep and beef) over a 10-year period show a clear margin between forestry and sheep and beef.

Worth noting in the study is the sandy nature of the property that gives a distinct advantage in access and far cheaper compared to other inland or hill country blocks, but also noteworthy is carbon credit trading was not included in the case study.

While the study showed the average forestry contribution was 45 per cent, it made up 49 per cent of total gross income over the 10 years. This was because the gross income varied considerably from about $200,000 to more than $400,000. Forestry income could have been higher if it hadn't involved some plantations where significant volumes of eucalypts that weren't big enough for saw logs had to be harvested and wound up as firewood.

Some of the alternative species have delayed payment arrangements and no recorded income yet. There was also lost volume in about 8ha of wide spaced, "agroforestry" where they tried to maintain grazing.

The case study revealed trees on the poorer 50 per cent of a property were matching gross revenue from sheep and beef on the better half and winning hands down on profitability. It was also noted that running a good forestry operation was pretty labour-intensive, contrary to 50 Shades of Green claims, but not a lot of other costs.

Approximately 40ha was harvested over the period, about the sustainable cut, but 8ha was agroforestry blocks with relatively low yields and some stands included alternative species that did not yield well and/or have not actually been paid for yet. If it was all conventional radiata the estimated gross returns would have been at least 10 per cent higher. Production thinning made a significant, but variable, contribution to forestry returns.

In addition there were higher costs for the livestock operations, especially fertiliser, hay and silage, animal health and other items. Harvesting costs were already deducted from "gross" returns for forestry, and re-establishment and silviculture costs are the major forestry specific costs. Those jobs were generally done by the owner, but more paid labour was used in the last two years.

Farm stats
+ Area: 247 ha Land Form: Foxton phase sand dunes. This is the older dune country with notably higher and generally more extensive dunes. Roughly 50/50 dunes and flats.

+ Soil Types: All the dunes and about half the flats are summer dry sands, with limited areas of better quality, moist sand soils and some silt loam.

+ Land Use: Forest area is approx. 110 ha (45 per cent). Long history of trees, but more formal forestry operation started by family in 1950s. Production thinning became important in the 1970s. Clear fell started in 1990 with an annual harvest every year since. Forestry is mostly on the sand dune with a bit on the dry flats.

+ Species: Majority radiata pine but 30 per cent or more is in alternative species, notably eucalypts, cypresses and blackwood. Radiata pine is an easy option that pays well, cypresses (macrocarpa) have paid well (some provided veneer for Beehive re-fit), but while eucalypts including some of the top timber species, have performed well, marketing is a challenge.

+ Other Operations: Sheep and beef breeding. 700 ewes/200 hoggets produce 1000-1100 lambs all sold store in spring. 80-90 breeding cows with weaner calves sold in March, sometimes earlier.