Tree Talk with Peter Harington Woodmetrics Regional Manager

One of the things I like most about my job is visiting interesting places and meeting interesting people. I get to travel into remote valleys throughout the central North Island and see places I would never otherwise get to see.

Wherever I travel, I am almost always regaled with horror stories of a rouge logger who has left his mark in the district by taking the wood, leaving a mess, and falling short on financial expectations – if not disappearing completely without paying.

Historically, most small forest owners sold their wood through a managed log sale process where a log trader harvests the trees and markets the logs on the owner's behalf.

There are a great numbers of flaws to this system, not the least of which is that there is no competitive element to assure the owner they are getting the best price from the market. Does this trader really have the best markets for the log mix for this particular forest and the lowest cost harvesting and cartage systems? How will the forest owner know they have achieved the best that they can from the market?

There are plenty of log traders to choose from – Woodmetrics has sold to more than 30 different buyers. Each log trader has relationships with a number of different sawmills and exporters where they sell their logs.

Woodmetrics revolutionised the private sector sales process by making the competitive stumpage tender model available to private forest owners to address the weaknesses associated with the traditional managed log sale approach.

A competitive stumpage tender involves setting up the sale of a forest or woodlot with lots of information about the quality of the trees and inviting all the players in the market to tender for the wood, usually on a per tonne composite price basis.

This is the beauty of competition. The bidder who can generate the best returns by having the best markets and the most cost-efficient operation will win the tender. The seller has the comfort of knowing they have won the best price the market can pay.

I get the impression there are fewer log traders at the rogue end of the spectrum these days, but I still hear stories of sales that have fallen short of expectations. Unfortunately, with selling trees, you only get one shot at it and if it goes wrong you have to wait 25 years to get it right next time.