How forestry can bring benefits to farmers
Timber prices are at an all-time high, leading to substantial windfalls for farmers fortunate enough to have planted productive trees 30-40 years ago. This is more good news for farmers who can already tap into very attractive planting grants that cover the cost of new planting.
Timber prices have been high over recent years, but over the last 12 months they have risen dramatically as demand outstrips supply.
With the economics of upland farming looking increasingly uncertain under various Brexit scenarios, now might be the right time for farmers to look at some forestry.
At EGGER, we have clients who are routinely felling 500 tonnes/hectare at prices above £50/T. Remember, this is all profit and timber sales are tax free. Therefore even relatively small blocks are producing substantial profits. For example 10 hectares could produce £250,000 at age 35-40. A real bonus that could help your business now, or a great gift to leave the next generation.
The various national Governments of the UK remain totally committed to expanding the productive woodland area in the long term to counter climate change. Excellent grants are available and these generally cover the cost of planting. Tremendous news for farmers as they have to provide no capital, apart from the land itself, and conifers are usually happy on fairly poor ground as long as it is not deep peat (greater than 50cm).
Integrating forestry and farming is another Government target and, in Scotland, the Sheep and Tress Initiative should be of interest to many upland farmers. Under this scheme funding is available to construct up to 1500 metres of new road. This provides access to new woodland, but, if planned carefully, could also assist wider farm access.
If there has ever been a better time to plant trees on farms, it has certainly not been in my 35 year career.
Business Development Manager EGGER Forestry