Forestry Review and Outlook Tom Houlihan Overview Forest Sector - PowerPoint PPT Presentation

Forestry Review and Outlook Tom Houlihan

Overview  Forest Sector 2020  Annual planting  Forestry returns  Timber demand/supply  Timber prices  Outlook 2021  Challenges/opportunities  Brexit

Afforestation Levels Annual planting 2014 - 2019 with 2020 forecast DAFM Actions Hectares (ha ) 6000  Forestry (Miscellaneous Provisions) Act 2020 (October 7) 4000  Fees introduced for forestry applications, submissions and appeals 2000  Four Appeals Committees  Dedicated Project Plan/Management 0 Board 2014 2016 2018 2020 (F)  Addition inspectorate/ecology staff Year  Forestry portal for visible/transparent Sectoral Feedback access to all applications/site details  Appointment of Ms Jo O’Hara to • Urgent need to dramatically increase the supply of licences for advise on implementation of the the key forestry activities in December 2020 and into 2021 MacKinnon Report • Industry is fully reliant on a continuous flow of approvals  Forest Policy Group convened through the licencing system. • Support to farmers and land-owners in terms of re-engaging with the forestry option as a viable and complementary land use and building confidence on the merits of planting. Source: DAFM (Various years)

2020 Indicative Forest Returns (per ha.) €20,000 €20,000 Mainly productive broadleaves Mainly productive conifers Costs Revenues Costs Revenues €15,000 €15,000 • • Net Present Value €5952/ha Net Present Value €8219/ha • • Annual Equivalent Value (AEV) € 326/ha Annual Equivalent Value (AEV) €514/ha €10,000 €10,000 Final harvest revenue €5,000 €5,000 Periodic forest thinning revenues 15 Annual forest premia €0 €0 e.g. ongoing management, insurance, inventory, roading costs Replanting costs - €5,000 - €5,000 GPC 3: 70% Sitka spruce, Yield Class 24 GPC 5: 85% Sycamore, Yield Class 8 15% Broadleaf species, 15% A rea for B iodiversity E nhancement (ABE) ( ABE = open spaces, retained habitat, hedgerows, environmental setbacks ) 15% A rea for B iodiversity E nhancement (ABE)

Timber Supply Forecast of total net realisable roundwood volume Top destination countries for forestry exports 2019 production to 2035 (‘000s m 3 ) 10,000 Private IRL Private NI USA 1% Sweden 1% France 2% 9,000 Coillte DAERA FS Other 4% 8,000 Total Volume volume 000 m 3 overbark Germany 2% 7,000 Belgium 3% 6,000 5,000 Netherlands 6% 4,000 2.86 million 3,000 1.36 2,000 United million Kingdom 81% 1,000 0 2016 2020 2024 2028 2032 Source: DAFM 2020 Source: COFORD, 2016

Timber Supply Monthly felling licences issued 2019 vs 2020 1200 1000 800 600 400 200 0 2019 2020 Source: DAFM, Forestry Section Monthly Reports (2019/20) and Forestry Dashboard (24 November, 2020). Source: globalwoodmarketsinfo.com

Timber Price Trends Coillte Quarterly Contracted Standing Sales (€/m 3 ), Private Quarterly Roundwood Prices (€/m 3 ), Q1, 2018 to Q3, 2020 Q1, 2018 to Q3, 2020 90 80 80 70 70 60 60 50 50 €/m3 €/m 3 40 40 30 30 20 20 10 10 0 0 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Palletwood Sawlog Palletwood Sawlog Pulp Source: Coillte.ie Source: ITGA.ie

Brexit Issues Requirements:  Border controls  Custom processes • Documentary identity and physical checks • Commodity Codes • Economic Operator Registration and Identification (EORI) number, • VAT processes • Due diligence requirements (EU/UK Timber Regulations)  Source: DAFM 2020 Wood based packaging • International phytosanitary plant health measure • ISPM 15

No Deal Scenario UK Global Tariffs  • Most wood products remain duty free Panel board products 6% duty • Effect on EU/Sterling Relationship  Supply chain disruption  Source: Boulton, UK Timber Trade Federation Effect on economic/construction  activity

2021 Outlook  Licencing • Priority is dramatic increase in the flow of licences for the key forestry activities  New planting • Support to farmers and landowners • Collaborative promotion • Direction of Forestry Programme post 2020 will become clearer  Timber mobilisation • Building forest owner capacity • Awareness raising/promotion of timber certification  Timber demand • Forecast 20 - 21,000 housing completions in Ireland 2021 • Post Covid 19 recovery • EU/UK-related developments likely to have significant impacts in 2021  CAP Post 2020 • Positive framework to support afforestation

Forest landscapes Trees on the farm Celebrating Our Forests Enjoying our forests Forest wildlife and plants

Thank You Email: tom.houlihan@teagasc.ie Web: www.teagasc.ie/forestry