8 Dec 2021

Forestry operators hope for recovery after 'perfect storm' hits log prices

7:40 pm on 8 December 2021

Forestry contractors are bracing for a tough summer as they wait for log prices to recover and harvesting to regain momentum.

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A recent survey of Forest Industry Contractors Association members found only about 35 percent were operating business as usual. Photo: 123RF

Prices were at near record levels earlier in 2021, but last month sunk to lows not seen since late 2015.

As a result the amount of logs heading to ports had slowed significantly, with many harvesting crews being told to work at a reduced capacity, or down tools.

China is New Zealand's largest overseas market for logs, accounting for about 70-90 percent of exports.

The Forest Owners Association president Phil Taylor said a "perfect storm" had caused the sudden drop in prices.

This included reduced processing capacity at sawmills in China and significant increases in shipping costs.

"International shipping at the moment has been significantly disrupted... basically everything is being impacted," Taylor said.

Phil Taylor said the situation was very fluid, but it anticipated the low prices would carry through into the first quarter of next year.

He said its biggest concern was the impact lower rates of harvesting had on logging and trucking contractors.

"Obviously they need to keep busy, they've got a lot of money invested in capital," he said.

The Forest Industry Contractors Association president Prue Younger said a recent survey of members found only about 35 percent were operating business as usual.

Younger said there was support available, including through regional Ministry of Social Development (MSD) offices.

"As an organisation we're doing as much as we can to get them some support with MSD and subsidies... and also looking at other industries they might be able to move their crews onto like horticulture, maybe viticulture."

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