26 Jul 2021

High log and beef prices push overall exports to record $6 billion

4:11 pm on 26 July 2021

Record prices for logs and beef have pushed up overall exports to a record $6 billion in the year to June.

Beef exports reached a new high of $411m in June 2021, while exports for logs and wood also reached a new high of $561m in June 2021.

Beef exports reached a new high of $411m in June 2021, while exports for logs and wood also reached a new high of $561m in June 2021. Photo: 123RF

That's a 17 percent or $871 million increase on the previous year.

New figures from Stats NZ show beef exports rose $31m to reach a new high of $411m in June 2021, compared with June 2020.

This increase was quantity driven, with volumes up 8.5 percent. The previous high for beef export values was in the month of March 2020 ($405m).

Exports for logs and wood reached a new high up $105m or 23 percent from June 2020 to $561m in June 2021.

Stats NZ international trade manager Alasdair Allen said the average value of untreated log exports has been steadily rising from the low in July 2020 to reach $199 per cu/m in June 2021.

Forest Owners Association president Phil Taylor said demand is strong domestically but also internationally with increased orders from China.

"Supply is significantly constrained and so as a result we've seen very strong pricing over the last nine months.

"Post Covid the supply chain has been significantly disrupted so that's created not only delays but obviously very significant costs."

Taylor said large fires in the Pacific Northwest and down the West Coast of the United States and in Chile had affected stocks, as well as the spruce disease affecting forests in Europe.

"New Zealand has always been a very good and effective supply chain, so given the global constraints China is looking at New Zealand. So, with the strong demand it creates a classic supply and demand imbalance pushing up the prices."

Growing demand in the domestic market was keeping forest owners and mills busy, he said.

"We're seeing a huge demand from our domestic processors and our preference is to supply them first with our high quality logs."

Earlier this year there were reports of a massive timber shortage in the building sector, but Taylor said there was plenty of stock.

"There's a lot of misinformation in that space. Forty percent of our 35 million cu/m goes into the domestic market."

But the increased prices and higher export volumes were not necessarily bringing in better returns for some forest owners.

"At a time when we've seen very high log prices, unfortunately, we've also seen very high freight prices ... while we're still having strong, strong prices, and it's a good time for us because of the high freight rates, that's taking some of the margins away," Taylor said.

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