There is good news for woodland owners as timber prices continue to rise dramatically. The only significant index of prices is published by the Forestry Commission and their Standing Sales Index for timber rose by 30% in the year to March 2018. This followed a 12% rise in the previous year, although a 10% fall in the year to March 2016.
What does this actually mean for returns from woodland?
Timber prices vary with many factors, e.g. location, species, working conditions, tree size, etc., so there is no simple answer. However, for a typical Sitka spruce clear fell in south Scotland/ north England, Egger clients are receiving £45-60/ tonne standing i.e. clear profit as the felling and haulage is paid for by the timber buyer. We are felling crops at 35-45 years old with standing tonnages of 400-500 tonnes/hectare. This means that some clients are approaching £30,000/ha of tax free income at clear fell. These are unprecedented figures.
Will it last?
All the predictions are that demand is strong and most UK buyers are concerned about supply. Global demand is also strong which, combined with a relatively weak sterling, makes imports expensive. Demand is strong across all sectors for saw logs, pallet wood, chip and fuel wood.
Should I be doing anything different in my woods?
With extra money at the end of the rotation owners can afford to invest more in ensuring crops mature as fast as possible. This means good ground preparation, weeding and deer control for example.