Forestry Development Unit Situation and Outlook Conference, 9 th December 2008 Farm Forestry Situation and Outlook 2008/2009 James Breen 1 and Mary Ryan 2 1 Rural Economy Research Centre, 2 Forestry Development Unit Teagasc
Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Outline New planting rates Current trends Profile of farmers with forests Review of timber markets Profile of farmers intending to plant Summary
Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Irish Afforestation Rates Source: Forest Service 2007
Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Farm Afforestation rates by region 1990 to 2007 Source: Forest Service 2007
Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Farm Afforestation rates by region 1990 to 2007 Source: Forest Service 2007
Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Farm Afforestation rates by region 1990 to 2007 Source: Forest Service 2007
Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Farm Afforestation rates by region 1990 to 2007 Source: Forest Service 2007
Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Divergence between Premium Payments and Private Planting
Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Divergence between Premium Payments and Private Planting
Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Barriers to Afforestation Potential value of unplanted land No REPS payment on forestry Forestry is a permanent decision Need all my land for agriculture Dislike forestry Other Source: National Farm Survey 2006
Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Main Reason For Not Planting Source: National Farm Survey 2006
Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Farms with Forests 2007 Survey represents 7,200 farms with forests 6.5% of all farms Average farm size: Farms with forests = 62.7 ha Farms without forests = 33.7 ha Average forest premium payment: €4,428/yr
Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Farms with Forests 2007 % of FarmsAverage Forest Area (ha) Specialist Dairy168.6 Dairy and Other815.5 Cattle Rearing Cattle Other198.6 Sheep Tillage Source: National Farm Survey 2007
Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Review and Outlook for Markets New opportunities: >60 industrial wood chip boilers 2,000 ha of thinnings Carbon sequestration potential Increase in thinning activity General Felling Licences: 102 in 2005 to 692 in 2008 2007 – Record year –Coillte supplied 87% Decline in forecast for 2009 house starts according to Home Bond.
Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Coillte Roadside Large Sawlog Price Index – 1992 to Present Source: Coillte 2008
Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Returns to Farm Forest Owners NPV (€/ha) Annualised Discounted Gross Margin (€/ha) Planted 19985, Planted 2008 No FEPS 8, Planted 2008 With FEPS 10,203595
Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Farmer Planting Intentions Survey population represents 5,100 farms (4.5% of pop) stated intention to plant in the next three years Area to be planted 36,700 ha Approx 1% of U.A.A. But represents 13% of U.A.A. on those farms Source: National Farm Survey 2007
Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Farmer Planting Intentions Larger Farms 56 ha of U.A.A. vs 36 ha 2,500 (50%) were in REPS 1,700 (33%) were in REPS and had >40 ha therefore could benefit from FEPS 38% of farmers who intend to plant already have a forest
Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Farmer Planting Intentions % of farmsAverage Intended Planting Area Specialist Dairy Dairy and Other Cattle rearing Cattle Other156.1 Sheep315.4 Tillage Source: National Farm Survey 2007
Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Summary Significant levelling off in new planting area Policy moving towards more environmental focus Shift in species and type of land being planted Decline in construction industry Cyclical timber prices New opportunities Forests eligible for SFP Variety of reasons for decline in planting both economic and social.