The world of forestry sits in a very precarious position with the continuation of log export markets declining, contractors realising their financial position - solvent or insolvent and generally in limbo with an uncertain lens on what direction will be ahead of us in the near future.
There appears to be no rationale now as to location for loss of contracts or reduction in tonnage, cyclone region or not - the whole of NZ is affected.
Talking constantly to forest principals it’s a balancing act for them with market demand, at the forefront keeping support around their workforce and understanding what the future programme might look like. It's tough for everyone but this down turn must be shared by the whole of supply chain to reduce the financial burden and risk that has fallen upon both loggers and transport contractors.
Since my market report was released this week, the current CRR price for A Grade is now down to USD 104 per jas m3. This places A Grade at NZD AWG basis at around $89 per jas m3 which is certainly at the bottom of a very low trough.
The "State of the Real Story" survey gave FICA the data that brought media and government attention to the current environment, highlighting that contractors can not exist on lesser production, cost of living and the uncertainity of markets that collectively provides major instability to the business.
We have been working with MSD and IRD to sound out options of support for our members and sector to relieve some of the financial burden. The collaboration with Women in Forestry to provide the feedback and scenarios for this work has been invaluable.
Despite the hard times we know that we have a social responsiblity to retain the face of the industry and FICA is attending the National Fieldays this week supporting the industry HUB and having a presence with a light hearted take on our sector. Come say “hi” if you are there.
There is project work underway behind a Training & Education Entity by PWC and this will provide a business case and budget around the opportunity to create a model and structure that will support our workforce into the future, with whatever is required to attract, recruit and retain.
Unfortunately there are a few things that we will let go, while we have too many pressing challenges on and in this state of uncertainity. Our FICA Conference - Pirates of the Bay of Islands is appropriately cancelled in September and it is looking like we will stage an online AGM in September.
The survey mentioned in the last newsletter that has been developed by Scion as part of a Forest Growers Research project has also be put on hold.
Equally there is a bit going on to support the sector indirectly:
Micro innovation grants
Competenz Te Pukenga campaign promoting on-the-job forestry skills
ACC has forestry as one of two sectors that they will support a recovery programme back to work with FICA & FISC
FICA has been given a few options to transfer the workforce into different areas that are busy at this time. Check out below the two opportunities.
So while we wait for more news to come forward around the future for forestry in NZ, the industry has certain areas still well in production and planting is still well underway. Lets hope that crystal ball gets a polish for the next newsletter!
Be a Mate in Forestry - hei hoe te ngahere