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Graham West's comment

The recent log price reports and financial returns for forest woodlot investors indicate there is real money being made in radiata pine woodlots. Reports on export log prices (a rise of $4-5 a cubic metre) in the last month has added to the rising trend for the last two years. PF Olsen's log price index is now $16 higher than the 5-year average. This is great news for farmers and urban investors who were "lucky" enough to plant woodlots in the early 1990's. The relatively long period of stable prices and increased wood supply has also meant logging contractors have upgraded equipment and most operations have become highly mechanised, including log making with optimisers to give best returns to the grower. With high log prices and stable logging costs, growers that were receiving $30-40,000 net per hectare in the Bay of Plenty are now getting $50-60,000/ha and more. When converted to an annual return (annuity), with discounting (at 7%) to allow for the period to forest maturity, an annual return of over $650/ha is indicated. Very good considering this crop is often grown on the poorer class land. This all points to a quiet revolution occurring in forestry that the average investor hasn't quite caught up with. With improved genetics from 50 years or more of tree breeding, good establishment practice, timely pruning and thinning, a growth response on farm sites, better harvesting techniques, bigger trucks, more demand from China, rising carbon prices, all indicate the time is right for a second wave of "lucky" investors catch the Green Gold opportunity.