1. 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

2. 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

3. Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Irish Afforestation Rates 1982 - 2007 Source: Forest Service 2007

4. Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Farm Afforestation rates by region 1990 to 2007 Source: Forest Service 2007

5. Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Farm Afforestation rates by region 1990 to 2007 Source: Forest Service 2007

6. Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Farm Afforestation rates by region 1990 to 2007 Source: Forest Service 2007

7. Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Farm Afforestation rates by region 1990 to 2007 Source: Forest Service 2007

8. Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Divergence between Premium Payments and Private Planting

9. Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Divergence between Premium Payments and Private Planting

10. 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

11. Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Main Reason For Not Planting Source: National Farm Survey 2006

12. 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

13. 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 Rearing3311.8 Cattle Other198.6 Sheep18.515.5 Tillage5.54.8 Source: National Farm Survey 2007

14. 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.

15. Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Coillte Roadside Large Sawlog Price Index – 1992 to Present Source: Coillte 2008

16. Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Returns to Farm Forest Owners NPV (€/ha) Annualised Discounted Gross Margin (€/ha) Planted 19985,252342 Planted 2008 No FEPS 8,795513 Planted 2008 With FEPS 10,203595

17. 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

18. 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

19. Forestry Development Unit Situation and Outlook Conference, 9th December 2008 Farmer Planting Intentions % of farmsAverage Intended Planting Area Specialist Dairy9.47.2 Dairy and Other6.719.3 Cattle rearing18.76.9 Cattle Other156.1 Sheep315.4 Tillage19.27.1 Source: National Farm Survey 2007

20. 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.