WoodWeek – 24 June 2020

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Greetings from us at WoodWeek. Thinking back to when the ‘Billion Trees’ plan was launched, if someone told you then, that in 2020 we’d be arguing over whether they should be planted or not, you’d have laughed in their face. Yet, despite the maths showing clearly the annual planting areas required; despite nursery owners investing heavily to make it happen and despite all politicians understanding our international climate mitigation obligations, here we are with farming lobbyists asking Ministers to intervene in the free market choices of private landowners.

Hard on the heels of avoiding the potential for price control legislation to creep into the log traders bill, the Forest Owners Association is understandably aghast at this second potential intervention in free markets. FOA vice-president, Grant Dodson, says if the government gives in to the anti-tree campaign, then New Zealand will fail to achieve a carbon neutral economy by 2050. This goal is enshrined in the Zero Carbon Act.

At greater risk from any limits to planting are heavily exposed nursery owners who, once before, geared up for a carbon planting boom only to be left holding the stock. Perhaps the heavy hitters to weigh in on this debate will be our trade officials to advise if a move like restricting land use choice for overseas investors could potentially breach our WTO obligations. On the other hand independent sources expressed concern just last week when these same officials didn't even get a look in at the select committee meetings for the log traders bill.

Moving to the good news for today, Tauranga-based agricultural robotics and automation company Robotics Plus has been named a Global Top 50 Robotics Company for its industry- changing Robotic Scaling Machine (RSM) which automates the accurate volumetric measurement (scaling) of logs on trucks and trailers, replacing manual measurement.

Rounding our today’s wood news update we move to actual facts and statistics. The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) has released the Australian Plantation Statistics 2020 Update Report. ANZ Research has also provided a forestry market update as part of their regular Agri Focus 2020 Report. Those are the facts and then we finish your update for the week with some funnies. Have a good week.

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FOA: Limiting planting would trash carbon goals

Promised forest limit trashes zero carbon goals by at least 30,000 hectares a year - The Forest Owners Association (FOA) says New Zealand’s carbon zero goal is seriously in doubt after a statement by the Minister of Agriculture, Damien O’Connor, that the government would ‘need to step in’ if new forest planting increased to more than 40,000 hectares a year.

Some farming groups want the government to restrict forest planting.

FOA vice-president, Grant Dodson, says if the government gives in to the anti-tree campaign, then New Zealand will fail to achieve a carbon neutral economy by 2050. This goal is enshrined in the Zero Carbon Act.

“In 2018, the Productivity Commission set out scenarios for getting to zero carbon. They all involved reducing greenhouse gas emissions. They also accepted the need to expand the plantation forestry area to sequester large volumes of carbon that would still be emitted.”

“The Commission estimated between 2.1 and 2.8 million hectares of planting was necessary to get to zero. The simple maths is that at least an extra 70,000 hectares a year on average needs to be planted over the next 30 years. But Damien O’Connor has told the Primary Production Select Committee that he will stop this yearly level of planting well short of what is required. If you restrict planting to 40,000 hectares a year, then you are at least 30,000 hectares in carbon deficit.”

Grant Dodson says planting this winter, which has just started, is likely to be well up on the new planting area last year of 22,000 hectares.

“That’s because New Zealanders are investing in forests, mostly farmers on their own land.”

“It’s a pretty fundamental right to decide what business you conduct on your own farm. I know of many farmers who strongly believe that it’s their right to farm stock or trees or both, without the government telling them what to do.”

“We’ve got Shane Jones telling us that we have to divert our logs from overseas exports to sell them more cheaply to local sawmills. Now his colleague in government wants to stop us planting more trees. Neither minister is informed by any examination of the issues and there’s been no meaningful consultation. It looks like both ministers are driven by noisy lobby groups who want to get special deals.”

Grant Dodson says he takes issue with the expression that forestry is taking over ‘productive’ land. He says forestry is productive too. The average returns per hectare per year from forestry are well above those from hill country farming. Farmers are increasingly questioning the economics of continuing to rely on a single source of farm income.

“There are farmers who worry about the greater frequency of severe droughts in some east coast regions. They know there are more stringent controls over their stock water discharge coming. Synthetic food is getting cheaper all the time. And overseas governments are re-erecting trade protection walls for their food industries after COVID-19.”

“For these farmers, forestry is a more secure option in the long term. As it is for all sorts of New Zealand investors. The government should not be arbitrarily thwarting those opportunities, nor jeopardising the fight against climate change.”

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Award earns Robotics Plus Global Top 50 ranking

World-first log scaling robot earns Kiwis a Global Top 50 ranking - Tauranga-based agricultural robotics and automation company Robotics Plus has been named a Global Top 50 Robotics Company for its industry-changing Robotic Scaling Machine (RSM) which automates the accurate volumetric measurement (scaling) of logs on trucks and trailers, replacing manual measurement.

The world-first robotic innovation scans and measures export logs on trucks has landed its Kiwi developers on the 2020 RBR50, Robotics Business Review's prestigious global list recognising the 50 most innovative and transformative robotics companies of the year.

Commercially launched in June 2019, the technology was developed in collaboration with Mount Maunganui-based ISO Limited, which commissioned the first RSM for its facility at the Port of Tauranga and has had it in operation since November 2018. ISO now has eight robots installed across the North Island scaling more than 25% of New Zealand's 20 million cubic metres of annual log exports. Further installations are planned around the country in 2020.

Dr Alistair Scarfe, Co-Founder and CTO of Robotics Plus, led the RSM technology development. "It's really exciting to be recognised alongside some of the biggest and best-known robotics, software and automation companies in the world including Boston Dynamics, ABB Robotics, Yasakawa Motoman, Nvidia, SICK and Microsoft," he says.

Dr Matt Glenn CEO of Robotics Plus, says: "This award validates our collaborative approach to innovation. Our team worked incredibly hard to design and build this world-first log scaling robot in just 12 months by working closely with ISO and a number of other local manufacturing suppliers."

Paul Cameron, CEO of ISO says the automated process is already having a significant impact as it is a safer, efficient and more productive system than the previous manual system used throughout the world, which requires people to hand scan the logs by climbing between trucks and trailers.

"The Robotic Scaling Machine can automatically scan logs on a truck in 3 to 4 minutes, which compares up to 40 minutes for manual measurement using a ruler. Importantly, it also eliminates exposure to hazards and moves those people into a safer environment and into more skilled roles."

Mr Cameron says ISO will continue to invest in the robotic technology as it has a clear payback for the company as well as the forestry industry. "We are delivering safer and more efficient systems which improve productivity across the forestry supply chain."

Steve Saunders, Co-Founder and Chairman of Robotics Plus, says it's fantastic to see New Zealand's world- class robotics capability being recognised on the international stage.

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Log traders bill – MFAT officials ignored

Blocking MFAT Advice On New Forestry Bill ‘concerning,’ Says NZ Initiative - The Government’s refusal to let its skilled public servants advise a Select Committee about new legislation is “deeply concerning,” said The New Zealand Initiative.

Last week the Environment Select Committee published its final report on Minister Shane Jones' Forests (Regulation of Log Traders and Forestry Advisers) Bill. Despite the Bill’s many flaws – and an unprecedented chorus of disapproval – it has emerged from the Select Committee largely unsubdued.

The Bill’s purported purpose is to create an occupational licensing regime for log traders and forestry advisers. It deems all forest owners to be “log traders,” thereby subjecting them to the registration and regulatory requirements of the new accreditation scheme.

The New Zealand Initiative chairman Roger Partridge said during the Select Committee process, forestry owners raised concerns that the Bill’s regulation and rule-making powers could be used to require logs to be provided to domestic mills and to otherwise intervene with the commercial terms in log sale and purchase agreements.

But according to the National Party’s dissenting minority view in the Select Committee report, New Zealand’s top trade officials were blocked from advising the Government on how the Bill might hurt the country’s trade relationships.

International trade obligations prevent New Zealand from imposing restrictions on the export of products trading partners which are member states of the World Trade Organisation.

Partridge said the Government prohibiting MFAT officials from talking to a Select Committee to present their judgement on an important Bill is “deeply concerning.”

“With the economy on its knees, the last thing Kiwis need to hear is that lawmakers aren’t getting access to the advice of their most competent public servants. For a Government that champions unity, it is acting unreasonably divisively by excluding its own officials from the legislative process,” Partridge said.

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ABARES: Australian Plantation Statistics Update

The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) has released the Australian plantation statistics 2020 update report on Tuesday 23 June 2020 (see attached).

Key findings:
> Australia’s total commercial plantation area in 2018–19 was 1,933,400 hectares. This area is 9,300 hectares (0.5%) less than the area recorded in 2017‒18, and 86,800 hectares (4.3%) less than the area recorded in 2008–09.

> The total area of softwood plantations increased marginally in 2018–19 to 1,039,700 hectares, and accounted for 54% of total commercial plantation area. The total area of hardwood plantations decreased to 884,000 hectares in 2018–19 and accounted for 46% of total commercial plantation area.

> ABARES estimates that a total area of 130,200 hectares (6.7%) of Australia’s commercial plantations was in the fire extent of the 2019–20 bushfires in southern and eastern Australia.

> A total of 2,800 hectares of new plantations were established in 2018–19, comprising 2,750 hectares of softwood plantations and 50 hectares of hardwood plantations.

> A total of 12,100 hectares of Australia’s plantation estate was converted to another land use in 2018–19, comprising 12,000 hectares of hardwood plantations and 100 hectares of softwood plantations.

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Source: ABARES

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ANZ AgriFocus: Forestry

(ANZ Research Agri Focus June 2020 - Export Market Yo-Yos Log prices have benefited from the hiatus in exports, with in-market prices lifting while wharf-gate prices also benefited from a lower NZ dollar and reduced shipping costs.

Tree felling, hauling logs and the export of logs ground to a halt during the Level 4 lockdown period. The reduction in logs arriving into Chinese ports from New Zealand and other exporting regions provided an opportunity to clear the backlog of logs on wharves, prompting a lift in prices on offer.

Jump in Wharf log prices - The combined lift in pricing now means returns at the wharf here in New Zealand reached record levels in early May. Unpruned logs are trading a relatively wide band either side of NZ$150/JASm3 depending on sales channel and location.

China continues to be the main market for logs. Prices in this market have lifted but are still lower than they were at this time last year. It is really just the lower NZD and the reduction in shipping costs that is fuelling current wharf- gate prices. The cost of moving logs to China has fallen about 40% over the past six months.

The partial lift in prices in China has been driven primarily by the reduction in the supply of logs. Exports from New Zealand ground to a halt in April’s Level 4 lockdown as forestry was not deemed an essential service. New Zealand supplies more logs into China that any other country so the dearth of supply from here certainly didn’t go unnoticed.

Supply of logs from other regions to China has also slowed. Seasonally there is always a reduction in supply when the Chinese New Year holiday occurs, as there is less labour available at this time to unload ships. This year the Chinese New Year break was extended for many workers due to measures put in place to reduce the spread of COVID-19. This meant the volume of logs imported by China in January and February was much lower than normal. In March volumes picked up again, but by April it was just the ships already on the water that were able to deliver logs into China.

The reduction in prices on offer earlier this year also helped crimp the supply of logs into China from Russia and North America. However, the volume of logs coming in from Eastern Europe continued at elevated levels, as price is not the driving factor of supply from this market. Large tracts of forest are being cleared in Eastern Europe to combat a bark beetle infection that is threatening to decimate entire forests. Selling the fallen timber to markets such as China helps recover some of the costs of felling but is not driving the rate which trees are being felled.

High prices not sustainable - The increase in in-market log prices has not been driven by a lift in end-user demand. Rather, it has been disruptions to supply that have prompted the lift in pricing. Therefore once supply returns to normal levels then some easing in pricing is expected to occur.

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Port Nelson drives for efficiencies

In a drive to both improve efficiencies and connect more closely with its customers Port Nelson has restructured its logistics and warehousing operations.

The move will see all warehousing and packing services on the Port consolidated into one operation, QuayPack. This will allow the QuayConnect operation to work more closely with clients, to offer innovative supply chain solution services.

The QuayConnect brand which turned 5 years old this year, is emblazoned on the side of the 23,000m2 Patterson Logistics Centre on Vickerman Street Nelson, as well as on the many trucks that transport empty wine bottles to Marlborough and return backloaded with export ready wine. The introduction of QuayConnect to the wine logistics industry, brought a new smarter approach to wine logistics in the Nelson-Tasman and Marlborough region.

Since its inception in 2016 this new approach has led to the annual removal of approximately 5150 truck trips, or 620,000- kms of travel, and saving 900 tonnes of CO2 emissions compared to the traditional logistics model between Nelson and Marlborough. To put these numbers into context, the total CO2 removed to date is the equivalent to what would be removed by a 1000- hectare forest over this period.

This new focus for QuayConnect will allow it to seek and achieve similar efficiency improvements for its clients. This work will continue to move product from the Te Tauihu region out to major New Zealand centres and the international market. These types of achievable efficiency gains can be seen in a recently secured contract with a global organisation which utilises a dedicated fleet of ISO tank containers to export Marlborough wines through Port Nelson to Australia.

Container packing and warehousing services have been provided at Port Nelson for over 150 years evolving over time to better serve the changing needs of its customers. QuayPack was established over 20 years ago to service the export needs of the forestry sector, primarily the storage and packing of MDF, LVL and swan timber, and as an accredited Transitional Facility, the devanning of personal effects from import containers. Its service offering has grown over the years to include wine flexitank fitting and now under its new structure has a total of 40,000m2 of warehousing and service space in the Nelson and Marlborough region.

Under the new structure QuayPack will be able to generate further efficiencies with its extended warehousing and service space as well as better utilised plant and team. The introduction of a new Warehouse Management System will allow for greater business insights and assist in innovating processes to achieve efficiency gains.

The Port sees challenging times ahead for the next 18 months, with the on-going global implications of COVID-19. However, as the Nelson Tasman region’s gateway to the world, the port is fortunate to be involved in what will be a star performer for New Zealand, the primary industries. Wine, apples, kiwifruit, fish, and logs are likely to continue to have strong export demand. Processed timber is more likely to be impacted by the economic downturn but will remain strong for the region. As it is unlikely that the cruise industry will fully recover by the coming season despite murmurs of domestic cruising, this lack of arrivals will severely impact the port.

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Too many trees? Says who?

Government may act on too many farm-forestry conversions – If the amount of farmland being converted to forestry each year exceeds 40,000 hectares, the government would look to intervene, Minister of Agriculture Damien O’Connor told Parliament's primary production select committee late last week.

Increased forestry is a key government policy, with a dual mandate of meeting the net-zero carbon target for 2050 and to create more jobs in woods processing. But there is growing disquiet, particularly by the agricultural sector, that rules intended to encourage planting don’t target marginal land and may take farms out of production instead.

O’Connor said the amount of farmland being converted to forestry was growing quickly and that he would look to intervene if it rose above 40,000 hectares per year.

“If we saw massive afforestation on land classed below six then we’d have to intervene,” he told MPs, referring to the classification system where land rated up to four is generally suitable for all farming, including vegetables or arable crops, whereas a rating of eight is unsuitable for even lower-value grazing or production forestry. “I’m comfortable with the level of forestation at this point, but we are monitoring it very carefully and if we were to see that a rapid rise then we have committed to change the requirements.”

More conversions - Federated Farmers said the emissions trading reform legislation, passed on Tuesday, would accelerate the conversion of productive farmland into pine trees planted for carbon credits. The group said some 70,000 hectares of sheep and beef land had already been converted to forestry since 2019, with carbon-related investment acting as a major driver.

The Ministry for Primary Industries disputed this number. Its provisional figures show 22,000 hectares of farmland was converted in 2019, with 2020 figures yet to come. The vast majority of this afforestation was on land classed six to eight, according to MPI.

If Federated Farmers' numbers are accurate, then afforestation may be approaching O'Connor's 40,000- thousand-hectare annual threshold. Currently, the Overseas Investment Office permits foreign purchase of farmland for the purpose of planting forestry but not for the purpose of farming — a rule which O’Connor himself described as “a bit odd”.

Making up for deforestation – However, he said the policy was brought in to encourage forestation after a sustained period of deforestation through the 2000s. “We are watching it really carefully, I’m very mindful that we may end up planting trees on really good high-quality farmland,” he said, adding “If you look back to the 1990s where we had 94,000 hectares in one single year go into forests, then those kinds of figures get pretty alarming, although it didn’t destroy our economy.” O’Connor said trying to secure more income from wool will help incentivise famers to continue dry stock farming and be less likely to sell to a company seeking carbon credits.

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Tairawhiti start-up: New bio-products planned

It’s possible that in the future, we might just look back on this period as the Oil Age in the same way we look back at the Stone Age - Pretty everything in the world is derived from fossil fuels at some point, and it’s not just the obvious stuff. Most advanced chemicals used to build, coat, and synthesise things are fossil fuel- derived, and that’s a big problem.

Oil dependency has created perverse political and social outcomes and has had disastrous effects on our environment. But it doesn’t have to be this way – there are some really exciting scientific methods and practices emerging that allow us to produce these materials we’re hooked on as a society but without having take fossil fuels out form the ground. One of these practices involves pine trees – an abundant renewable resource here – which is a super cool idea since oil is pretty much trees plus time.

New Zealand company Futurity is at the forefront of trying to take out the middleman (time) and is in the process of bringing a biorefinery to Tairāwhiti Gisborne. Using new techniques, pine trees will be broken down into its building block chemicals to become the platform chemicals that can be used for plastics, resins and all sorts of applications currently provided by oil-derivatives.

It’s an awesomely ambitious project that I’ve been lucky enough to see up close helping Futurity with its branding. Futurity is aiming to create jobs, increase the value we get for timber grown here, and help keep carbon in the ground. Co-founders, Jacob Kohn and Dr Gaetano Dedual joined us on the podcast to talk about science, their goals and ways the system needs to improve.

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Source: The Spinoff

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Buy and Sell

... and finally .. . time for a laugh

It's just dawned on me... there's something about my dog

My dog sleeps about 20 hours a day.

He has his food prepared for him.

He can eat whenever he wants.

His meals are provided at no cost to him.

He visits the doctor once a year for his checkup, and again during the year if any medical needs arise.

For this he pays nothing and nothing is required of him.

He lives in a nice neighborhood in a house that is much larger than he needs and he is not required to do any upkeep.

If he makes a mess, someone else cleans it up.

He has his choice of luxurious places to sleep.

He receives these accommodations absolutely free.

He is living like a king, and has absolutely no expenses whatsoever.

His costs are all picked up by others who go out and earn a living every day.

Then it hit me! --> I think my dog is a member of Parliament!

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John Stulen, Editor

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