The economics of farm /estate forestry ????

[Pilatus]

A lot of well meaning members of society keep on about why more trees should be planted on the planet , I have know problem with their idealistic views but how do the economics of tree planting /forestry stack up?
My thread title must be very hard to answer as their are quite a few different situations as to what age the wood land is on your farm/estate.
I guess if "Dad" has not bothered with managing the wood land for years there may be some nice trees ,that have some value in them that if harvested (cut down) by "Sons" new management will sell for good money if up to the spec of the market. So those trees may bring in a profit after costs of abstraction have been deducted. But as trees are so slow growing would you as the "Son" take down a few mature trees each year,or does one go for a quick profit and cut down as much mature/valuable timber as one can to make a quick profit , and sell some more mature timber in say another 15 /20 yrs time. Mean while "the Son"will have replanted or rely on the self regeneration of trees after the first cutting, to be growing for his next generation.
From what I gather when all said and done, farm /estate forestry is almost a break even enterprise , even with the inclusion of grants available for establishing woodland .
How many acres of woodland would you expect 2 full time foresters to look after ,the woodland consisting of mainly hardwood planted in the 1920's ,all on banks ?

 

[Steevo]

I think all woodland needs managing to do it right. If as in your example is hasn’t been managed, I’d be surprised if there were any nice mature trees. They might be mature, but not necessarily nice and with a reasonable value.

Forestry is a pretty specialist game as I understand it.

 

[browny88]

Post on the woodland management section of arbtalk.co.uk forums and then come back. You'll get some very well informed answers.

But at a guess I'd say the short answer is you'll lose money if its all planted on banks and it needs hand felling and winching to extract.

 

[Tubbylew]

@egbert has a bit to do with wood iirc

 

[Feldspar]

My experience is it's something you do (instead of leaving woods to their own devices) to keep the place looking tidy, but it doesn't make much money. Thinning last year did give a return, but that was due to lucky increase in timber prices and it took ages to give this return. I would not turn land into woodland unless there were big payments to do it. Loss of land use flexibility is a big thing to give up.

 

[Feldspar]

My experience is it's something you do (instead of leaving woods to their own devices) to keep the place looking tidy, but it doesn't make much money. Thinning last year did give a return, but that was due to lucky increase in timber prices and it took ages to give this return. I would not turn land into woodland unless there were big payments to do it. Loss of land use flexibility is a big thing to give up.

 

[Doing it for the kids]

My experience is it's something you do (instead of leaving woods to their own devices) to keep the place looking tidy, but it doesn't make much money. Thinning last year did give a return, but that was due to lucky increase in timber prices and it took ages to give this return. I would not turn land into woodland unless there were big payments to do it. Loss of land use flexibility is a big thing to give up.

this.

those ‘lucky enough’ to have it may try and look after it for shooting / visual amenity but I don’t know of many who make it a main business.

gov going to have to offer an awful lot of incentive to get any meaningful amount of farm land planted up Down south. There Are other things that we can grow that earn much more.

they should start with state owned land like the highways authority and show us the way.

 

[egbert]

@egbert has a bit to do with wood iirc

I do.


it's almost too wide a topic for a simple answer, but there are sound points raised already.

Planting new woods on productive farmland is a huge step.
It very quickly becomes subject to restrictions on ever going back to farmland - and if the State don't address that, I don't know how they expect us to queue up.

The job is littered with decades long investments which have produced stuff all, because of disease or changing markets.
IE those who grew beech, but have now found it out of favour, or ash, and are now finding dying on its feet, and worth no more than firewood.
Or -and I've been there- dedicated thousands, and decades to young oak, only for the grey squirrels to decimate it

Equally.... I lately bought oak off a farmer who cashed in to sort out some family stuff.
The oak was growing on clay -hence was very good- the market was right up, he pillaged it - with correct permits, although I'm mystified how the 60% 'take the best' thinning was allowed.
He cleared several tens of thousands I believe _ I was a bit part player in this-, then sold the scalped woodland for seriously good amenity money. (more than it would ever have been worth farmed)

He got lucky - although he and family had helped make their own luck.

Some estates I deal with seldom dip below the profit line, as once you've a mixed age established crop, the income is steady.

Tenanted land is a whole other ball game.
I've written agreement within my tenancy that I can grow a crop of trees under certain terms, but my landlord is unusual.

In many European countries, farmers would often own and manage their own bits of woodland, in some countries, this is encouraged with specific pro help and advice, lending to an integrated landscape and industry.
It bothers me that, as a nation, we don't aspire to this.
The vast Sitka mono-cultures in the north, remotely owned and managed by numbers have fostered a bitter division in many quarters.
While many lowland plantations and the knowledge/culture/trade that go with them are in the hands of monied estates.

And ag colleges are shockingly still omitting to make the fundamentals of silviculture part of EVERY allround farming course

I've greatly enjoyed watching my own plantings grow, and take great solace in them.
We're starting to use trees I've tended from saplings, milled ourselves, now going into buildings. That is a rare pleasure.

But how do you make it pay? Depends where you are geographically, on the tenure spectrum, and in your life!

 

[D14]

A lot of well meaning members of society keep on about why more trees should be planted on the planet , I have know problem with their idealistic views but how do the economics of tree planting /forestry stack up?
My thread title must be very hard to answer as their are quite a few different situations as to what age the wood land is on your farm/estate.
I guess if "Dad" has not bothered with managing the wood land for years there may be some nice trees ,that have some value in them that if harvested (cut down) by "Sons" new management will sell for good money if up to the spec of the market. So those trees may bring in a profit after costs of abstraction have been deducted. But as trees are so slow growing would you as the "Son" take down a few mature trees each year,or does one go for a quick profit and cut down as much mature/valuable timber as one can to make a quick profit , and sell some more mature timber in say another 15 /20 yrs time. Mean while "the Son"will have replanted or rely on the self regeneration of trees after the first cutting, to be growing for his next generation.
From what I gather when all said and done, farm /estate forestry is almost a break even enterprise , even with the inclusion of grants available for establishing woodland .
How many acres of woodland would you expect 2 full time foresters to look after ,the woodland consisting of mainly hardwood planted in the 1920's ,all on banks ?

As a connected point to this the ELMS scheme apparently will have some big tree planting carrots dropped in it to increase woodland across the country. The problem I see with this is that unless that carrot is equal to the price of selling bare open arable land in your area, nobody will take the offer up because if you plant trees you devalue your land and lets face it are you ever going to be allowed to remove them even?

So basically ELMS needs to pay the farmer the open land value to plant the trees whilst letting the farmer retain the ownership of it. Otherwise tree planting won't take off in majority of the country.

 

[egbert]

As a connected point to this the ELMS scheme apparently will have some big tree planting carrots dropped in it to increase woodland across the country. The problem I see with this is that unless that carrot is equal to the price of selling bare open arable land in your area, nobody will take the offer up because if you plant trees you devalue your land and lets face it are you ever going to be allowed to remove them even?

So basically ELMS needs to pay the farmer the open land value to plant the trees whilst letting the farmer retain the ownership of it. Otherwise tree planting won't take off in majority of the country.

or at the very least, have a commercial enough element plus annual payments to make it a business.
(managed lowland softwood with a sensible species spread tends to be a consistent performer)

but I'm afraid a lot of the lobbyists think it'll be rowan trees and hazels. locking up all that carbon for tens of thousands of years.......pass the sick bucket

 

[suffolksmallholder]

My father planted every single available acre from 1960 till 1980. Most grant funded and a senior Forestor in charge of operations. Those areas available from ex-arable are the most profitable as even though they weren't suitable for ag they were easy to plant and will never need sky-line type extraction.
Eight years back when I was in the game I grossed £85,000 from one seasons thinning on 1500 acres. Today there is the potential to clearfell all the larch. Firewood & chip are competing for top dog prices so there's no problem selling what I struggled to move at that time.
But this is the cycle, it comes and it goes and you have to have good infrastructure in place from the start to extract and move the produce in PDQ time without any hassle straight to Giddings or other specialist mills.
SS

 

[capfits]

I seem to recall a few years back that there was some kind of study up here in Scotland where it was suggested IIRC about 350 acres on 40 year planting harvest softwood rotation would make enough money to keep someone on the land.
Caveats were they were pretty actively managed and marketed the resulting timber to appropriate local markets, ie pulp,chipping etc was not the target.
Having recently looked at a neighbouring unit and not having the flat huge fields of Suffolk etc forestry with the grants and some of the off setting program that the oil majors were promoting it did make a decent business case, particularly when looking at potential capital uplift from woodland values (prior to Covid)
That said the amenity of a lot of woodland is great, but it should not blind anyone to harvesting at the appropriate times, ie when timber is worth money. To many estates have truly awful woodland management in place destroying value.
In last 2 timber harvesting operations the margin/ton has ranged from £27.50 to £40. Naturally some of this is driven by all these wood boilers.....

 

[suffolksmallholder]

I seem to recall a few years back that there was some kind of study up here in Scotland where it was suggested IIRC about 350 acres on 40 year planting harvest softwood rotation would make enough money to keep someone on the land.
Caveats were they were pretty actively managed and marketed the resulting timber to appropriate local markets, ie pulp,chipping etc was not the target.
Having recently looked at a neighbouring unit and not having the flat huge fields of Suffolk etc forestry with the grants and some of the off setting program that the oil majors were promoting it did make a decent business case, particularly when looking at potential capital uplift from woodland values (prior to Covid)
That said the amenity of a lot of woodland is great, but it should not blind anyone to harvesting at the appropriate times, ie when timber is worth money. To many estates have truly awful woodland management in place destroying value.
In last 2 timber harvesting operations the margin/ton has ranged from £27.50 to £40. Naturally some of this is driven by all these wood boilers.....

The truely awful woodland management is usually caused by Gamekeepers and shooting fraternity dictating when one can't do 'proper' forestry operations. The can't extends to a lot of the year......the Estates loss but cash is king.
SS

 

[brigadoon]

A lot of well meaning members of society keep on about why more trees should be planted on the planet , I have know problem with their idealistic views but how do the economics of tree planting /forestry stack up?
My thread title must be very hard to answer as their are quite a few different situations as to what age the wood land is on your farm/estate.
I guess if "Dad" has not bothered with managing the wood land for years there may be some nice trees ,that have some value in them that if harvested (cut down) by "Sons" new management will sell for good money if up to the spec of the market. So those trees may bring in a profit after costs of abstraction have been deducted. But as trees are so slow growing would you as the "Son" take down a few mature trees each year,or does one go for a quick profit and cut down as much mature/valuable timber as one can to make a quick profit , and sell some more mature timber in say another 15 /20 yrs time. Mean while "the Son"will have replanted or rely on the self regeneration of trees after the first cutting, to be growing for his next generation.
From what I gather when all said and done, farm /estate forestry is almost a break even enterprise , even with the inclusion of grants available for establishing woodland .
How many acres of woodland would you expect 2 full time foresters to look after ,the woodland consisting of mainly hardwood planted in the 1920's ,all on banks ?

As with so much else the devil is in the detail, there is in general a bias now towards continuous cover forestry - or in your terms - a few a year. However if Dad has not done any management then there is not likely to be all that much in the way of good stuff.

In order to have much in the way of choice you need ground that machinery can travel - which in SW Scotland at least is not all that common.

The big thing really is to have access to a market and there really is not an answer to your question on size - it all comes down to what machinery you have available and how close you can get a wagon

 

[suffolksmallholder]

Thing is, the woodland created did create the shooting spaces that the keepers so hated! Short memories......
My Dad's crew went to a number of woodland Estates in the day, with the Forestor in charge, to re-organise their woodland to the eventual benefit of the shooting... but folk soon forgot that. A very rich Americans Estate had the once over, before his time mind, but it was properly managed for a while.
Of course the local sawmills all benefitted as well including Ercol Furniture as there were some lovely beech butts extracted just when it was in high demand.
SS

 

[suffolksmallholder]

As with so much else the devil is in the detail, there is in general a bias now towards continuous cover forestry - or in your terms - a few a year. However if Dad has not done any management then there is not likely to be all that much in the way of good stuff.

In order to have much in the way of choice you need ground that machinery can travel - which in SW Scotland at least is not all that common.

The big thing really is to have access to a market and there really is not an answer to your question on size - it all comes down to what machinery you have available and how close you can get a wagon

I have friends up your way. Father and son both working in the business. Father is senior Tillhill and son is a harvesting manager for Euroforest. Plus of course there's Wilsons at Dalbeattie who are kept in good stead by the forest machinery they deal with. There's also James Jones sawmills dotted about.
SS

 

[D14]

My father planted every single available acre from 1960 till 1980. Most grant funded and a senior Forestor in charge of operations. Those areas available from ex-arable are the most profitable as even though they weren't suitable for ag they were easy to plant and will never need sky-line type extraction.
Eight years back when I was in the game I grossed £85,000 from one seasons thinning on 1500 acres. Today there is the potential to clearfell all the larch. Firewood & chip are competing for top dog prices so there's no problem selling what I struggled to move at that time.
But this is the cycle, it comes and it goes and you have to have good infrastructure in place from the start to extract and move the produce in PDQ time without any hassle straight to Giddings or other specialist mills.
SS

£56/acre gross before costs just shows how pointless woodland is? You could get £80/ac for doing nothing renting the land out whilst retaining the ‘arable land’ value. Woodland is only worth 25% of bare land value.

 

[egbert]

£56/acre gross before costs just shows how pointless woodland is? You could get £80/ac for doing nothing renting the land out whilst retaining the ‘arable land’ value. Woodland is only worth 25% of bare land value.

could you show me where all this woodland is at 25% of bare land values?

And if annual yield is something that interests you...
lowland conifer crops in the UK might be expected, under competent management, to be growing at upwards of 15/T per hectare per year.
Just standing chip wood values would put that at circa £375 standing. Suffolksmallholders larch sawlog material? If it's still growing at a reasonable rate, it's adding circa £1100/hect annually.

 

[brigadoon]

£56/acre gross before costs just shows how pointless woodland is? You could get £80/ac for doing nothing renting the land out whilst retaining the ‘arable land’ value. Woodland is only worth 25% of bare land value.

Somehow I suspect that there will not be much arable land in that 1500 acres, I also kind of suspect that at about 1t per acre gross they were not chasing returns but following a management plan.

 

[T Hectares]

We have around 350 acres of Woodland on the estate, it's pretty much the inherited mature type scenario and we are in a woodland CS agreement, we have had several capital grants to plant, fell, fence etc
and it all turns a margin making it better than not managing it, we also utilise anything not valuable into our Chip boilers adding more value, we recently had an Ash felling programme selling the firewood and chipping a years supply of fuel from the tops, there are tax perks to forestry too.
We have 13 acres of Poplars planted on some marginal parts of the farm but there's not enough money in it to encourage us to convert arable land to forestry.
We have looked at Carbon capture agreements but that's all terribly confusing, not very profitable and has raised more questions than answers from a landowners point of view.
Still, it all adds to value of the estate, it's another element to manage and we have some lovely Woods and fuel for our boilers, we just won't be rushing to expand this side of the business...