Intervention costs money! by Robert Scott

UK Timber markets are still being adversely affected by the strength of sterling relative to the European currencies in general, and the weak Scandivanian currencies in particular. Depressed timber prices and rising costs of re-establishment are combining to greatly reduce the net cash surplus woodland owners can expect from the clearfelling and subsequent replanting of their plantations. No wonder the UK’s largest forestry management company has quietly dropped the word “economic” from its name!

What are we to do about this sorry state of affairs? We can, of course, hope for an improvement in timber prices; the market has always been cyclical, but what if this time is different? The globalisation of the world¹s economy, combined with the rapidly increasing volumes of homegrown timber expected to come onto the market over the next few years, lead me to conclude that we cannot bank on a return to the price levels achievable three or four years ago.

Whilst we do not have much influence on timber prices, a woodland owner has rather more flexibilty when deciding on the expenditure priorities. A discounted cash flow investment appraisal would suggest that re-establishment costs are now far too high relative to income generated from clearfelling to make this type of woodland management an economically viable proposition.

As a result, there is a growing interest in continuous cover forestry, where woodlands are thinned regularly but never clearfelled. This is not exactly rocket science, and with several privately-owned woodlands being managed successfully on this basis, it is rather surprising that this concept has not become more widely adopted in recent years.

The objectives of a manager of continuous cover forests are:-

  1. To maximise the financial return.
  2. To maximise bio-diversity.
  3. To maxmise stability.
  4. To produce as much high quality timber as possible.
  5. To produce as little low quality timber as possible.
  6. To minimise regeneration costs.
  7. To eliminate re-establishment costs.

Continuous cover forests include two or more species, and are multi-general; the conversion of single-species even-aged plantations into such forests takes decades to achieve, and demands very high levels of silvicultural skills. Secondary species need to be selected with great care. Deer numbers need to be assessed and probably drastically reduced to ensure the survival of young seedlings. The management of thinnings is crucial; the amount of light allowed into the forest determines the amount of natural regeneration, and the objective is to reduce the basal area to around 30 square metres per hectare. Such a management regime may not suit every situation, but the advantages offered by continuous cover forestry are such that this type of forest management deserves wider informed debate within our industry.

Robert Scott qualifed as a Chartered Surveyor in 1975, and has been the Estate manager to Abercorn Estates since 1977. Based at Baronscourt in Co Tyrone, the Abercorn Estates also include Belle Isle in Co Fermanagh, together with other properties in Argyll, Fife and the Scottish Borders. These properties have approximately 1600 ha of forestry.

Following a ProSilva Ireland visit to Lower Saxony in September 2001, in which Robert, Lord Hamilton (the Estate owner) James Simpson (the Head Forester) participated, the decision was taken to manage approximately 400 ha of the Baronscourt on a continuous-cover basis.

Robert is presently Chairman of the UK Forestry & Timber Association, the leading representative body for all those involved in the growing and management of trees throughout the UK.

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