When a shelter belt becomes a money belt
Shelterbelts: A good market – where once, there was no market
Timber prices are performing well, which is good news for those who have forestry investments – it’s also opened up a market for farmers to cash in on timber, farming their assets as well as their land. Shelterbelts are a case in point.
In the 1970s there were less restrictions and more grants to encourage tree planting – swathes of new woodland appeared. Shelterbelts were also introduced on many farms.
Shelterbelts no longer waste land
Shelterbelts do what they say on the tin. They are generally smaller areas of woodland, often found on hilly farms and planted to protect stock and crops from the prevailing winds. Consequently, the size and access, combined with lower prices for timber, meant ten years ago, they had little or no value for harvesting.
Trees planted in 1970s are now 50 years old, and whilst never being a profitable option in the past, in today’s market – with rising timber prices, they are a crop worth harvesting/cashing in on.
Timber prices have risen for a number of reasons. The weaker pound against the Euro makes imports more expensive and there is a general increase in UK consumption. Sawmill volumes were up last year by 6% (6.5m tonnes), and wood chip for biomass boilers is also fuelling demand.
Ten years ago timber prices meant ‘waste’ wood like chip and brash were left to decay because the cost of extraction exceded its value. Times have changed.
Good market where once there was no market
A decade ago there was no base line value for chippings or brash. They are now in high demand for biomass boilers and they are setting baseline timber prices.
The changing timber market 2008 – 2019
|1 year ago,
|5 years ago,
|10 years ago,
|Minor returns – do the job to get timber
|Middle grade timber
|Good quality Sitka Spruce
|Good steady market
|Market more volatile
Scotland has over half the UK’s farmed woodland (51%)*, so it is hardly surprising that we are seeing an increase in the number of clients across Scotland and Northern England capitalise on harvesting trees planted as shelterbelts.
Iain Kyle Forestry Manager for Davidson & Robertson said “An acre of forgotten land is now a growing asset and we’re managing the harvesting process for several farmers who want advice on their best options.”
You do need a licence and you do need to replant
Permission from Forestry Commission Scotland is normally needed to fell growing trees and is usually given with a felling licence or approval under a Dedication Scheme. It is important that the licence has been issued before any felling is carried out.
Iain said “We make recommendations on what should be felled and replanted, apply for felling licences (we estimate 6-8 weeks for these to come through), and work on tenders to achieve the best rate. Where possible, we look for tenders for a single price across the board.
“Harvesting shelterbelts is now attractive but not without issues – all of which are evaluated ahead of the tender process.”
Shelterbelts are more likely to have aspects that affect the cost of harvesting like access issues, the size and shape of compartments. Where the extraction route is long, or requires hard standing or stone roads, the costs will drop the tonnage rate achieveable.
A single stand of 10 hectares next to a road will always be more attractive than having to install a track to reach a small shelterbelt.
Conifers make up 74% of our trees and produce softwood for construction timber, paper and other wood products – as well as fuelling biomass plants. Around half the planting in Scotland is Sitka Spruce followed by Scots Pine – these are typical species planted for shelterbelts.
Depending on the timber type, land owners can achieve £50/tonne+ for quality Sitka Spruce sold as a standing sale from a good sized plot with good access. Sitka is the dominant tree and yields the highest price in the market. Scots Pine attracts lower prices, with Larch offering good value in the fencing market. Good quality will yield a good price. On many farms, the Larch is of poor quality and only of chip value – but still profitable for reasons already mentioned.
Reaping the benefits of planting in the 1970s
In East Lothian, a mixed beef and sheep farm that planted woodland in the 1970’s recently completed sales of hardwood and softwood timber from 10.68 hectares of land harvesting over 4260 tonnes and achieving sales in excess of £148,000. The farm had woodland on the side of a river bank and three shelter belt pockets. The timber was a mix of softwood (Sitka Spruce) and field margins of predominantly Beech and Sycamore. Like many shelterbelt sites, it had issues – most of which related to access, but a good price for the timber was achieved.
Beware false hope from free assessments
Iain said “Most farmers know little about the felling licence process or how to go about marketing timber, instead they focus on what they do well. We’ve heard of the timber buyer turning up at the gate and talking farmers into selling their best timber for as little as possible – often offering a few fencing posts back in return.
“One client had a block of woodland that had been unmanged for years. From a grant funded source he was given free information and recommendations for felling that we felt were inadequate. Whilst we recommended a different plan, the felling licence was already in place and time was critical. We managed the process but anticipated problems after thinning. As we had suspected, the age and form of the remaining trees resulted in significant wind damage. Despite this we managed to achieve a good price for the quality of the timber. Result: 1244.79 tonnes yielded over £38,000 from 4.15 hectares.
Other recent sales in Larch crop from 2.97 hectares achieved £25.5K from 622.6 tonnes of timber.”
Since the 1970s , when grants and regulations made planting appealing, there has been a dramatic decline in new planting across the UK. The recent Forestry Grant Scheme in Scotland has helped boost planting and woodland creation is now on the increase. Forestry investment is a consistent performer for rural estates – and is something clients with reducing returns on upland farms are considering.
Iain said “Whilst not all agricultural land is suitable or economic to plant, farmers and landowners should look at opportunities both in terms of earning capacity and long term asset value. You can improve capital value of less productive land by introducing woodland. Land that can be classed as ‘middle-hill’, can achieve values over and above agricultural value when selling for forestry purposes.”
Investing in woodland
George Hipwell, Davidson & Robertson Head of Sales said “Market prices for timber are buoyant and there is growing demand from investors looking to buy plantable land. We have strong enquiries from prospective purchasers looking to buy existing woodlands and forests”.
Top tips when considering planting and harvesting shelterbelts:
- Access – you must be able to access easily for both management and harvesting
- Assess your shelter belts and understand what’s there to maximise potential – it’s something we’re often asked to do
- Consider the impact that felling the shelterbelt would have on your farm going forward
If you have any questions about harvesting or woodland creation, contact Iain Kyle, Forestry Manager at Davison & Robertson on 01900 268633 or visit www.drrural.co.uk.