Harvesting and marketing guidelines for Radiata pine

Harvesting and marketing guidelines for Radiata pine (PDF 1.4 MB or Page)

Forestry Fact Sheet Number 17

South Australia is able to produce high quality structural radiata pine due to a silvicultural regime developed over many decades that aims to grow uniformly large diameter, small branched final crop trees for final harvesting. To achieve this outcome radiata pine stands:

  • are planted with high stocking rates (1350 - 1850 stems per hectare) to control branch size in the butt log (the first six metres)
  • receive at least three thinnings per rotation
  • have poorer formed or smaller diameter trees removed during the periodic thinnings.

This allows the better formed dominant trees to produce larger and more valuable logs faster.


Harvester cutting logs in a first thinning operation

Deciding to harvest

Is the forest commercial?

Many factors will influence whether a plantation is commercial such as:

  • Area - harvest costs are greater with smaller plantations. More than 20 hectares is preferable, but at least 10 hectares.
  • Distance from mills - a plantation a long distance from mills is more costly to harvest.
  • Proximity to other forests and harvesting operations. Plantations close together could be harvested together to increase total area.

The reality of supply and demand may well over ride these influences. Most markets are predominantly supplied by large industrial forest growers. A plantation close to the mill may be difficult to market during periods of over supply, but never assume that one knock back means your plantation is not commercial.

Silviculture

Harvesting normally occurs when the forest is due for a thinning and there are products that can be recovered. The frequency and type of thinning depends on the forest itself and the rate of tree growth. Faster growing stands would be thinned earlier and more often, and slower growing stands, such as those in lower rainfall areas, will need longer between thinning operations. Table 1 shows the typical range of thinning regimes and products recovered.

Operation
Age (years)
Residual stocking (stocking after thinning) (trees per hectare)
Products
Initial stocking
0 1350-1850
 
First thinning 10-14
600-800
Small diameter sawlog, pulp and preservation i.e. posts
Second thinning 15-22
400-500
Small diameter sawlog and pulp
Third thinning
24-30
200-350 Medium diameter sawlog
Clear felling 28-37
0 Large diameter sawlog and plywood

Table 1 A general thinning guide for radiata pine plantations on average sites in South Australia.

Markets

Marketing is having the right product, for the right customer, in the right quantities, at the right time, in the right place and at the right price. Forestry companies, log marketers and purchasers can advise you of current market conditions and supply quotes accordingly. View the Australian Pine Log Price Index.

Markets exist for all products within the Green Triangle region with processing plants located near Mt Gambier, Nangwarry, Millicent, Tarpeena and Heywood. There is also an export market at Portland for some products. In the Mount Lofty Ranges there is a more limited market for thinnings. Processing plants are located near Adelaide, Kuitpo, Monarto, Loxton, and Jamestown.


Harvesting machine felling a radiata pine tree in a clear felling operation

Finance

If a plantation is commercial there is a reasonable amount of flexibility in the timing of harvesting operations to exploit market conditions. The following financial considerations may also influence your choice of timing of thinning and clear felling:

  1. When do you need the money?
  2. Would you like harvest payments spread over 2 financial years?
  3. Tax implications?
  4. Have you signed a marketing agreement specifying when trees are to be clearfelled?
  5. How high are your annual costs of management or insurance?

Prior to harvesting

Estimating yields and returns

Seek more than one offer or quote on expected returns from a harvest operation before making your final decision, as price, products and expected yields will differ. The purchaser should be able to provide an estimate or quote. Providing professionally presented area and inventory information to prospective purchasers will help to improve the quote. For an independent estimate you could engage a forestry consultant. To estimate plantation yields yourself some helpful references to guide you through the process are:

  • Abed, T. and Stephens, N.C. 2003. Tree measurement manual for farm foresters. Second edition, edited M. Parsons. National Forest Inventory, Bureau of Rural Sciences, Canberra.
  • Farm Forestry Toolbox, version 5.0. Private Forests Tasmania.

Prior to committing to sale it is important to understand:

  • what pricing arrangement is being offered
  • what the point of sale is
  • what additional costs may need to be borne by you - the forest owner.

The pricing arrangement may be a price per cubic metre or per tonne. These are basically interchangeable for small plantation owners as a green tonne is essentially equivalent to a cubic metre.


Forwarder with logs in a second thinning operation

There are three main points of sale:

  • Stumpage is a payment per cubic metre or tonne, paid to the owner at the stump. The purchaser pays all costs associated with delivering the wood. This is the most common point of sale.
  • Fixed price is a payment where your purchaser guarantees you a fixed payment for the right to harvest your trees, eliminating any uncertainty over harvest yield, harvest recovery, and product mix.
  • Mill door price refers to the price per cubic metre for log products delivered to the mill yard. Mill door sales are generally restricted to large forest owners and are not recommended for smaller growers as the cost, risk and complications of managing harvesting and transport contractors may be significant.

Be aware of additional costs that are not built into the quote. There are some expenses the forest owner may be asked to pay out of the gross proceeds from the sale of their wood. These include:

  • LITA (Logging Investigation and Training Association) levy which is paid to assist training for the logging industry and to maintain standards.
  • Tree marking costs.
  • Roading costs.
  • Marketing fees.
  • Government levies.

The forest owner should explicitly ask for a statement of proposed deductions that could be subtracted from their payment or ask for an offer net of all expenses, to ensure that the likely total payment is estimated.

When engaging a purchaser, ask them to provide references for their previous operations. You could also ask to talk to some of your prospective purchaser's other small plantation owner clients, and if possible, visit their plantations to get a feel for the quality of the operation, degree of utilisation, site cleanliness after harvest, amount of tree damage, low stump heights etc.

The best quote will likely be a combination of price and the degree of utilisation of all products from your plantation. Beware of attractive per cubic metre prices, where only a limited product range is offered. Selling 70% of potential recoverable volume at premium prices could generate a lower return to the grower than selling 100% of recoverable volume at average prices. Maximising recovery can reduce forest fuel loads, improve access, and reduce future reestablishment costs!

The Green Triangle Regional Plantation Committee's website provides lists of purchasers, etc. where services can be found.


Logs cut to length in the bay of a first thinning operation to be removed by the forwarder

Harvesting contracts

A contract should be drawn up prior to harvesting the plantation to detail important information including the area of plantation to be harvested, the products to be harvested, clean up standards, and log price and payment details. The contract may also include standard contract terms and conditions clarifying issues such as point of sale, payment terms, dispute resolution etc.

A harvesting contract should also specify harvesting standards and verify that the contractor has systems in place to demonstrate environmental and occupational, health and safety compliance. The purchaser managing the timber sale may carry out contractor assessments - criteria include product quality, value of product, safety performance, environmental performance, residual tree damage, stump heights and residue left on site. You are entitled to ask for and receive copies of such reports. Selling wood at the mill door means that it is your responsibility to ensure the contractors have systems in place to ensure safety and environmental outcomes.

A harvesting contract may also commit future wood flows as a condition of sale. There are often two types of harvesting contracts:

  • Marketing agreements that lock plantation owners into long term supply commitments. Such agreements are likely to include price indexation formulas and proposed timing of future harvest events.
  • Spot sales are when a price is offered at a specific point in time for a specific harvest event.

A marketing agreement offers greater security while spot sales provide more freedom to play the market. Legal advice should be sought before entering long term supply agreements so that the ramifications of such agreements are understood, including such things as restrictions on selling your plantation asset and the degree of flexibility with respect to harvest timing.

Compliance

Those responsible for the harvesting operation must comply with relevant regulations and guidelines. As an occupier, the person who has the management or control of the site, you are responsible to supply a safe work place, including safe access under the Occupational Health, Safety and Welfare Act 1986. A land owner should have public liability insurance and it is advisable to ensure any contractor working on your land does too. This may provide some financial protection in the event that a member of the public is injured as a result of the harvesting operation on your land.

Roading

Adequate roading is necessary before a plantation can be harvested. epending on available resources you may be able to handle the roading yourself. Alternatively, there are many roading contractors available. It is possible that the purchaser will be able to offer a roading service, or at least facilitate a roading contractor to assist you.


Example of a turnaround constructed to aid truck movements in a plantation

Choice of road design and standard is influenced by row direction, forwarding distances, log landing locations and harvest planning. The purchaser can advise the internal roading requirements necessary to facilitate harvesting. It should be recognised that roading requirements can change over the life of a plantation. Higher volume harvest events like clear felling are likely to require higher quality roading than lower volume thinning operations. Types of transporting equipment also influence roading standards over time, for example, B-double traffic requires wider access and better roads.

Construction of surfaced roads can be very costly, with distance to gravel source a significant contributor to cost. Similarly, the need for culverts or creek crossings can dramatically increase costs.

Break trees / Perimeter trees / Edge trees

These trees, which are heavily limbed because they are on the perimeter of the plantation, need to be considered by the harvesting contractor. Ideally their removal should start at first thinning and aim to have most of them removed by the second thinning if they have poor form and/or have not been pruned. If they are left until the third thinning or clear fell, they will more than likely be too big for the harvesting machinery resulting in them being left behind and adding to clean up and reestablishment costs.


Heavy limbed edge trees need to be considered and managed when planning harvesting operations

Future wind stability needs to be considered when removing break trees. It may be prudent to leave a "hedge" of break trees as wind protection for an exposed plantation, or a plantation that is adjacent to older trees that will be clear felled midway through your rotation. "Feathering" the thinning intensity up to the exposed edge will help to reinforce stand stability. This should be discussed when preparing prescriptions for selecting trees.

Tree selection for thinning

There are two options for selecting trees for thinning - tree marking or operator self-selected. Tree marking is completed prior to harvesting by tree marking personal (tree markers), who walk along rows spraying paint onto those trees to be removed to identify them for the harvesting operator. It is important that the correct number of unmarked trees remain to leave the plantation at the desired stocking (ie. number of trees/hectare). Blue paint should be used as red paint is not advisable due to the relatively high rate of red - green colour blindness in the Australian population. If a purchaser is assisting with your harvesting operation, they may offer to mark the trees for a negotiated price. Operator self-selected is when the harvesting machine operator selects the trees to be harvested without any tree marking. However, poor tree selection can ruin a good forest. Removing too many trees will reduce future harvest volumes and under thinning increases harvesting costs and another thinning will be required sooner. It is recommended to use experienced operators and supervise tree selection standards.

Fire protection

To minimise the risk of fires starting from harvesting some practices and protocols should be adhered to. Some examples include:

  • Machinery should have exhaust temperature restrictions of less than 240°C and be kept clean of debris.
  • On extreme fire danger or total fire ban days contractors machinery should be prohibiting from working.
  • Contractors should be required to have a fire unit with water and fire fighting equipment on site as well as extinguishers fitted to each machine.

If you have any concerns regarding operating during periods of very high to extreme fire danger contact the purchaser or contractor.

Future management of the site

The condition that a site is left in after clear felling can affect options in the second rotation. Consideration should be given to the future use of the site after harvesting; whether a plantation will be re-established or the site returned to pasture or some other land use. This will influence the extent to which the site needs to be cleaned up. Lower slash levels are advisable to reduce the intensity of slash treatment required.


A slash and logging waste heap resulting from poor utilisation

Full utilisation where as much product as possible is harvested from the forest is desirable because it results in:

  • better utilisation of log products
  • maximising your return
  • lower cost site treatments because of a reduced need for heaping and burning and the ability to chopper-roll or plough for reestablishment.

However, there needs to be a market for all log products for full utilisation. Therefore a purchaser that markets and harvests a full range of products will be more likely to leave a site with minimal slash residues.

Sell the plantation rather than clear fell?

Do not rule out selling your plantation as an alternative to clear felling it. There may be several advantages, including tax, and land value considerations that make this a more attractive proposition depending on your circumstances.

Good quality multi-thinned radiata pine plantations should significantly increase in value following second thinning. Selling your standing plantation after second or third thinning may also be a good choice that allows you to maximise your return as well as reducing investment period. This strategy may suit risk averse plantation owners, who having managed their plantation to a high standard and value, do not wish to continue paying escalating fire insurance payments or risk a major fire loss.

For further information

Contact PIRSA Forestry


Pulp logs stock piled next to harvesting road and loaded on trailers ready for transport to market

Disclaimer: While this publication may be of assistance to you, the Government of South Australia and its officers do not guarantee that it is without flaw of any kind or is wholly appropriate for your particular purpose. The government therefore disclaims all liability for any error, loss or other consequence that may arise from you relying on any information in this publication.


Last Revised October 2009