20 Mar 2014

China boosts tree economics

3:29 pm on 20 March 2014

A farm forestry representative says the booming log trade to China is helping to make growing trees on marginal farm land a paying proposition.

Middle Districts Farm Forestry Association chairman Denis Hocking says he's puzzled as to why there isn't more interest in tree planting on lower quality farmland.

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Photo: PHOTO NZ

He says the returns of more than $1000 per hectare per year are a lot higher than running sheep and beef cattle on the same land.

According to the Ministry for Primary Industries, log prices increased by 30 percent in the second half of last year.

Mr Hocking says that's being largely driven by demand from China.

"As a general policy of using your low grade, poor, low-producing, erosion-prone land for forestry in an integrated farming and forestry unit still makes so much sense.

"And the prices we've been receiving, particularly for the lower grade logs recently really have made a lot of those poorer areas very profitable."

Mr Hocking says despite this, interest in farm forestry has been waning over the past decade or so, although it's difficult to measure the extent of that.