Modern forestry harvesting is increasingly reliant on highly specialised, high-value equipment. A new feller buncher can now cost well over $1.5 million, making it one of the largest investments many contractors will ever make.
As machine costs continue to rise, FICA is asking an important question: do current depreciation rates accurately reflect how these machines lose value in the real world?
Many modern feller bunchers are purpose-built machines operating in demanding environments, often on steep terrain and tether-assisted operations. High utilisation rates, harsh operating conditions, technological change and increasing maintenance costs all influence how quickly these assets depreciate economically.
FICA has launched an industry review to gather evidence on machine life, replacement cycles and residual values. The aim is not to advocate for a particular outcome, but to determine whether current depreciation settings reflect the actual experience of contractors and equipment owners.
The review will examine information such as purchase costs, replacement values, hours worked, machine age and resale values. It will also compare New Zealand experience with international jurisdictions, including Australia, where comparable harvesting machinery is depreciated over a shorter effective life.
Whatever the findings, the objective is simple: ensure decisions affecting forestry businesses are based on evidence rather than assumption.
For an industry investing millions of dollars in increasingly specialised machinery, understanding the true economic life of those assets is more than an accounting question. It is a business sustainability issue.
FICA encourages contractors, machinery suppliers, manufacturers and industry advisors to contribute data and experience to help build an accurate picture of how modern harvesting equipment performs over its working life.
