WoodWeek – 26 February 2020

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Greetings from our WoodWeek news team. How’s your day going? Today’s news is unlikely to make it any brighter, but on the other hand, you’ll be better informed. The Forest Owners Association says precautions in China against coronavirus have resulted in almost no offtake of logs for processing and exporters understand that the remaining log yard space at most ports near processing centres is quickly disappearing.

Moving to safety and technology, we have two exciting teams of speakers for our FIEA Forest Safety & Technology Conference series coming in May. In both Australia and New Zealand, the focus is on managing fatigue and culture in our workplaces. Our specialist speakers are experts in this area and will be bringing some powerful and practical tools. We recognise that the combined effects of the massive forest fires in Australia and the log jams for export to China are hurting businesses across the forest industries. To make it easier to bring your people to our safety conference series, we have extended the early-bird registration period. Click here for details.

Looking to market news, the China Customs Tariff Commission issued a notice recently that China will halve the additional tariffs on US$75 billion worth of some US products, effective from Valentine’s Day. This is a bid to promote the stable development of Sino-US economic and trade relations. The tariff rates on most of the logs and sawn wood imported from the US have been reduced to 5% from 10%. Meanwhile in Canada, the Ontario government has proposed increased logging on Crown-owned lands from 15 million cubic metres to 30 million cubic metres in a bid to boost industry.

To networking news now. Registrations are still available for our popular MobileTECHAg Conference running in early April in Rotorua. This event brings people from agriculture, horticulture and forest industries together. The speed of development here is astounding. It’s a great place to make new contacts for developers and users in the mobile technology area. Our young farmers’ panel is also a highly regarded session.

In Australia, the New South Wales government won’t proceed with privatising Forestry Corporation’s softwood plantation business after an unprecedented bushfire season. The government decided to forgo a long-term lease of the business after a five-month investigation which took into account recent damage to the state’s forestry assets.

Finally, we have an opinion piece from Nick Leggett, CEO of the Road Transport Forum on the lack of information for business owners about the upcoming referendum. As Nick explains, there are still more questions than answers on the binding cannabis referendum.

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Log jam at Chinese ports

Wharves in China can’t take more logs from New Zealand - Lack of space in Chinese ports is bringing a virtual halt to New Zealand log exports to China.

The Forest Owners Association says precautions in China against coronavirus have resulted in almost no offtake of logs in China for processing and exporters understand that the remaining log yard space at most ports near processing centres is quickly disappearing.

The Association President, Peter Weir says exporters had hoped that business would return to normal after the extended Lunar New Year holiday finished in China two weeks ago.

“That hasn’t happened. Many Chinese sawmills are yet to get back to work. New Zealand exporters have nowhere else to send the industrial grade logs they harvest.”

“While New Zealand’s domestic sawmills usually take about 40 percent of the harvest, sawmills supplying the New Zealand housing market will only buy stiffer and higher quality sawlogs or knot-free logs from pruned trees for joinery. The upper logs from a pruned true often grade out as industrial logs, and these logs are exported.”

“In regions where there is no domestic sawmilling, many harvest contracting crews are being put on reduced hours or, worst case, stood down. Regrettably many of our contractors have little alternative but to lay-off skilled workers.”

Log exports to China were worth $2.7 billion for the year to the end of December 2019. Over the past three months very large volumes of European spruce salvaged from forests under attack by insects have been shipped into log markets in China. Peter Weir says that that flood of salvaged logs is directly attributable to climate change with recent warm winters and longer summers.

“There would have been much less inventory pressure if these exports had not arrived in China, but the concern about coronavirus has happened at just the wrong time for New Zealand.”

Peter Weir says the situation is fluid with different forest owners and management companies taking different approaches.

“NZFOA members are doing what we can to retain our skilled labour force by sending better logs to domestic sawmills to make up for the shortfall from farm woodlots where logging has already ceased. We continue to invest in the silvicultural work, including pruning, thinning and preparing recently harvested land before replanting begins in May or June.”

“Most members will continue building safe forest roads and landings to be harvest ready when markets recover. But that may be some months.”

“Many larger forest companies are assisting contractors with business management and financial advice. In Poverty Bay, we are delighted with the support we are receiving from local Federated Farmers who are looking for jobs to employ forest workers. Every few extra hours of income are most welcome.”

Peter Weir says the Forest Owners Association is working closely with Te Uru R?kau in trying to lessen the impact of the log supply situation.

“We are coordination with the government seeing what we can do together. Neither of us can solve this situation, but working together as a partnership will lessen the impact. Our members are not looking for handouts, but we do want to work out equitable ways for working with the government to assist the various harvesting crews. They are ones who will need the help.”

“We are mindful too that a substantial reduction in harvesting is likely to have a major and rapid supply chain effect here in New Zealand, with a large dedicated workforce in trucking and port loading which is also going to feel the impact.”

Source: NZFOA

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Forestry Corporation privatisation halted

NSW government drops forestry privatisation plan after bushfires devastate plantation - Deputy premier John Barilaro says the government’s priority is ‘getting new trees in the ground and strengthening the industry’.

The New South Wales government won’t proceed with privatising Forestry Corporation’s softwood plantation business after an unprecedented bushfire season. The government decided to forgo a long-term lease of the business after a five-month investigation which took into account recent damage to the state’s forestry assets.

About 25% of Forestry Corporation’s softwood division suffered fire damage over the summer. NSW deputy premier John Barilaro said the government’s priority was to help the forestry industry get back on its feet.

“Regrowing our forests, getting new trees in the ground, and strengthening the industry so its long-term future is secure is where we are focusing our energy,” Barilaro said in a statement on late last week. The decision comes after Guardian Australia revealed in December the NSW government was poised to privatise state forests to raise $1bn for infrastructure projects.

The long-term lease of Forestry Corporation’s 230,000 hectares of softwood plantations was expected to be one of the first assets off the block. The state forests produce about 14% of Australia’s timber, including much of the supply for the housing industry.

More >>

Additional commentary >>

Source: The Guardian & ABC

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Workplace implications not addressed

Opinion - Nick Leggett, CEO, Road Transport Forum

More questions than answers on binding cannabis referendum - Remember the referendum that was Brexit, where people in the United Kingdom and Gibraltar merrily voted to leave the European Union, until they realised that that actually meant, and that it was binding?

In hindsight, quite a lot of people felt they didn’t really have enough information and didn’t quite realise what would happen after they made that tick on a referendum paper. Some were quite shocked it was binding.

We are worried that New Zealand voters will find themselves in a similar position come the 2020 general election day, 19 September, when they vote on whether or not to legalise recreational cannabis use in New Zealand. That’s recreational, not medicinal.

We believe there is not enough information to make a vote that the current coalition Government would consider binding.

The only information available from the Government is a badly written and half-finished Cannabis Legislation and Control Bill – Draft for Consultation. It looks a bit like a copy and paste job at this stage and I’m not sure anyone with a law degree has been involved to this point. This is a Bill that people will be asked if they support (yes), or not (no).

We were surprised to hear Prime Minister Jacinda Ardern answer a question in Parliament this week on the referendum by saying: ‘‘what we prepared is a draft bill so that there will be that full information to members of the public – that if they support the bill, that is the legislation that at least three parties in this House have said that they will then support to enact” (Hansard).

We think maybe the Prime Minister hasn’t read the bill. There are holes you could drive a truck through. Some of those for us are around road safety and workplace health and safety. The bill is silent on these matters.

In fact, the Minister who introduced the bill (Hon Andrew Little) was quoted as saying that exploring the risks of drugged driving and workplace impairment would be pushed back until after the referendum vote. Vote now and see what happens later!

We don’t believe that’s good enough. In this country, employers and Boards are bound by strict health and safety legislation – that if flouted can result in them going to prison – and we cannot see how this bill in any way correlates to that legislated responsibility.

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Source: Road Transport Forum

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China: US log tariffs halved

Reduced tariffs on US wood products - The China Customs Tariff Commission issued a notice on 6 February 2020 stating that China will halve the additional tariffs on US$75 billion worth of some US products as of 14 February 2020 in a bid to promote the stable development of Sino-US economic and trade relations.

This decision will halve the 10% and 5% rates on a list of US products that were subject to additional tariffs from 1 September 2019.

The tariffs for 270 items listed in the first section and 646 items in the second section of Annex 1 to the Notice was adjusted to 5% from 10% and for the 64 items listed in the third section along with 737 items in the fourth section had tariffs adjusted to 2.5% from 5%.

Apart from the above-mentioned adjustment, the other measures to additional tariffs on US products will continue to be implemented.

The tariff rates on most of the logs and sawnwood imported from the US have been reduced to 5% from 10%. The tariffs on poplar sawnwood and other North America sawn hardwoods have been cut to 2.5% from 5%. The tariff rates on most imported wood-based panels, wood crafts and furniture have been halved to 2.5% from 5%. In addition, tariffs on most of the imported woodworking machinery, woodworking tools, agroforestry tools and forestry machinery from the United States will be halved to 2.5% from 5%.

Analysts write “this move is good for timber traders, wood processors and furniture manufacturers who have been suffering from trade conflict and also disrupted production and trade due to the coronavirus control measures.

Further adjustment will mainly depend on future development in the economic and trade relations between the two countries. The commission said other additional tariff measures will continue to be implemented as stipulated and they will continue to work on tariff exemptions for imports from the US.

Source: Ministry of Finance of the People's Republic of China

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Forestry company directed to pay victims

Forestry company ordered to pay $100,000 to pair for terrifying ordeal - A forest company must pay a Tolaga Bay couple $50,000 each after a terrifying night they spent marooned on their roof amid rising floodwaters laden with forestry debris.

Aratu Forestry Limited, previously Hikurangi Forest Farms Limited, was yesterday fined a total of $379,500 on two charges brought by Gisborne District Council under the Resource Management Act of discharging contaminants — forestry waste and silt — to land in circumstances that enabled it to enter water.

The offence is punishable by a fine of up to $600,000.

The company was also ordered to pay three victims a total of $125,000 reparation for emotional harm.

Ten forestry companies were charged with similar RMA offences, which came to light in two extreme weather events that hit the region but impacted on different places on June 3 and 4 and June 11 and 12, 2018.

One of the charges against Aratu related to its Te Marunga forest, about 12km west of Tolaga Bay, which was affected by the earlier event when 47,000 cubic metres of forest waste ended up on the beach at Tolaga Bay and another 400,000 cubic metres was lodged elsewhere around the catchment, damaging properties, and blocking waterways, roads, and bridges.

None of the consents issued to Aratu (between 2008 and 2016) allowed discharge of forest debris to water. Its failures to observe the Forest Owners Code of Practice and the general failure to properly manage harvesting and earthworks on undoubtedly vulnerable areas (much of it the region's most erosion prone) were "reckless".

In setting sentence starting points for each charge, the judge took into account the maximum penalty, the vulnerability of the affected environment and extent of damage, the breaches of resource consent, the business activity aspect, need for deterrence, culpability, Aratu's remedial efforts and other factors, past good character and comparable cases.

The company's culpability was high, he said. A large scale forestry company should be aware of standards it was required to meet.

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Source: Gisborne Herald

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Research results for loggers

Earlier this week Forest Growers Research updated their publicly available reports database. There are a number of results that will be of interest to loggers.

Check them out with the links below:

Steep Land Harvesting Programme - Post Programme Report 19 Feb 2020 >>

Comparison of Felling Heads to Reduce Tree Breakage >>

Biomass recovery operations in New Zealand: a review of the review >>

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Carbon Match market update

Market Update - NZUs wax and wane. NZUs last traded today at $26.50, but the fixed price option still hangs over the market and spot NZU volumes moving through our screen are pretty light as a result. Best bid $26.40, best offer $26.70.

Carbon for the People … Or so it could be with Z's announcement earlier this week. While some of us scramble over the details of proposed ETS reforms (or indeed, scramble to even understand the detail as Stuff's Charlie Mitchell pointed out last week) - some businesses are just getting on with it and trying to do stuff we can all understand.

Last week saw the launch of Z's new Carbon Count app which will help customers - and even non-customers - to calculate and offset the emissions associated with the fuel they buy at the pump. Proceeds are sent directly to Permanent Forests New Zealand and with Z and its customers responsible for some 9 million tonnes of emissions every year, even a small percentage uptake could provide a welcome boost to owners of permanent forests in NZ. The initiative sits over and above ETS compliance obligations - which attach to almost all liquid fossil fuel sold in NZ. It all helps.

We've done a lot and we can do even more. Earlier this month, a much smaller business quietly stepped up with an even bigger announcement - a pledge to deliver 20% of New Zealand's 2030 commitment under the Paris agreement by planting 120 million trees which are expected to deliver some 36 million tonnes of the estimated 178 million tonne gap between our business as usual emissions and our target.

NZ Carbon Farming says that its new programme should have no impact on productive farmland as they will plant only on the most marginal of land. The pledge, however, is contingent on policy settings being made more flexible such that existing post-89 forest owners under the carbon stock accounting regime can use offset planting / land swaps where appropriate.

This in turn should help ensure that forests do end up really being the "right tree in the right place" and that land with a higher value use can continue to be put to that use.

Offset planting has been an option open to pre-1990 forest owners for over 5 years and is expected to be offered to new forest owners whose forests will be entered into the ETS under an "averaging" regime. But, under recent policy proposals, existing owners of post- 89 forest registered into the ETS before 2019 are not expected to have that option and would also be precluded from making use of offset planting. This needs to change, says NZCF.

Source: Carbon Match – every weekday from 1-5pm.

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Canada: Province plans doubling harvest

Regular readers will be well familiar with the effect that Europe's massive wood harvest boost has done for our biggest log export market. Well, watch out - if the plans in Eastern Canada come to fruition then a whole lot more wood is going to be hitting in the market, if not for export, then within North America at least.

In eastern Canada, the Ontario government's proposal to double logging volumes over the next decade goes too far in serving the forestry industry without doing enough to protect the province's wildlife, environmentalists said Tuesday as they called for a more balanced plan.

Groups including the David Suzuki Foundation, Ontario Nature and the Wildlands League said they oppose the plan introduced in early December, pushing instead for an approach that would maintain conservation efforts and protect endangered species while still achieving the governments stated goal of bolstering the province's forestry sector.

The Progressive Conservative party has proposed increasing logging on Crown- owned lands from 15 million cubic metres to 30 million cubic metres by 2030 in a bid to create more jobs and revitalize the industry.

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Buy and Sell

... and finally ... time for a joke

A little boy was doing his maths homework.
He said to himself, 'Two plus five, that son of a bitch is seven. Three plus six, that son of a bitch is nine....'
His mother heard what he was saying and gasped, 'What are you doing?'
The little boy answered, 'I'm doing my maths homework, Mum.'
'And this is how your teacher taught you to do it?' the mother asked
'Yes,' he answered.

Infuriated, the mother asked the teacher the next day, 'What are you teaching my son in math?'
The teacher replied, 'Right now, we are learning addition.'
The mother asked, 'And are you teaching them to say two plus two, that son of a bitch is four?'

After the teacher stopped laughing, she answered, 'What I taught them was, two plus two, THE SUM OF WHICH, is four.'


A man went to the police station wishing to speak with the burglar who had broken into his house the night before.

"You'll get your chance in court," the desk sergeant told him.

"No, no, no!" replied the man. "I want to know how he got into the house without waking my wife. I've been trying to do that for years!"


An elderly woman decided to prepare her will and told her preacher she had two final requests.
First, she wanted to be cremated, and second, she wanted her ashes scattered over K- Mart.

"K-Mart?" the preacher exclaimed.
"Why K-Mart?"
"Then I'll be sure my daughters visit me twice a week."


A language teacher was explaining to her class that in French, some nouns unlike their English counterparts, are grammatically designated as masculine or feminine.

'"House" in French, is feminine - "la maison", while "pencil" in French is masculine - "le crayon."'

One puzzled student asked, "What gender is a computer?" The teacher thought it would be a good exercise to have the students decide what they thought the gender should be.

So she split the class into two groups appropriately enough, by gender and asked them to decide whether "computer" should be a masculine or a feminine noun. Both groups were required to give four reasons for their recommendation.

The men's group decided that computer should definitely be of the feminine gender ("la computer"), because:

1. No one but their creator understands their internal logic.
2. The native language they use to communicate with other computers is incomprehensible to everyone else.
3. Even the smallest mistakes are stored in long term memory for possible later review.
4. As soon as you make a commitment to one, you constantly find yourself spending more money on accessories for it.

The women's group, however, concluded that computers should be masculine "le computer") because:

1. In order to do anything with them, you have to turn them on.
2. They have a lot of data but still can't think for themselves.
3. They are supposed to help you solve problems, but half the time they ARE the problem.
4. As soon as you commit to one, you realize that if you had waited a little longer you could have gotten a better model!

Thanks for keeping up with the latest wood news with us!
Have a safe and productive week.

John Stulen

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