In this post we’re discussing the effects depressed timber pricing has on the industry, ultimately impacting our ability to effectively look after our woodlands.

Commoditisation

The true value of timber is not reflected in its price. This issue stems from a tension between the need to produce a commodity that can compete on international markets and with alternative materials, and the desire to offer a product that captures the fuller social and environmental value of our woodlands.

One sawmill explained how the price of timber simply doesn’t tell the whole story:

These dynamics have contributed to several industry-wide consequences, including:

1) Flattened demand and industry consolidation: The focus has narrowed to a few species with specific properties, leading to industry consolidation. This trend has promoted simplified silviculture and led to undermanagement of woodlands.

2) Recruitment challenges: Low pay and financial stress, particularly in the contracting sector, have resulted in recruitment difficulties. An insufficient network of contractors means clients struggle to find reliable operators, and when they do, the work often does not meet expectations.

Additionally, the industry faces compounded difficulties due to rapidly rising operational costs and volatile timber prices. These factors disrupt both log and processed timber sales, creating a reluctance to commit to transactions. This puts further financial pressure on harvesting contractors, who having invested heavily in machinery, want a secure programme of work.

When it comes to the revenue returned to woodlands two specific issues were frequently raised:

1) Non-monetary transactions: Woodland owners often donate or exchange resources rather than engage in pure sales, driven by environmental or social motivations, convenience, or difficulties in bringing timber to market.

2) Confidence in measurement: When logs are sold based on weight, there is a lack of confidence in the timber volume removed. Woodland owners and managers rely on self-bill invoices or lorry weight tickets to accurately represent the weight of logs removed, an unusual way to find out how much you’ve sold. Some companies have already started using specialist software to tackle this issue, either tracking lorries or moving to shift to volume based measurements.

Moreover, delays between felling and log collection can lead to revenue loss due to moisture loss and therefore reduced weight of the logs. Attempts to mitigate this through penalties for slow collection often add logistical restrictions, penalising small companies unable to move or store large volumes quickly.

These insights highlight the complex challenges facing the timber industry and underscore the need for strategies that recognize and address the full value of woodlands.

How might CloudForest help with this situation

We want every tree to count, providing a match-making service members can find a good home for their timber. All too often we hear of stranded roadside logs that have been felled without finding a buyer, or from buyers unable to find the logs they need. One construction company we worked with to find saw logs was happy to commit to a roadside price/m3 on an outturn basis. This seemingly innocuous step enabled the woodland manager to proceed with planned harvesting operations where previously they had been stuck. In order to have more control of the harvesting process they had wanted to sell at roadside; however, they had lost 3 months trying to get even an indicative price to know whether felling the trees was worthwhile. Absolutely we think this is repeatable, through better match-making more value can be created. Shorter supply chains can also reduce transport and overhead costs as found by We Can Make in their Homegrown Homes project. Of course, bigger structural changes need to happen in our societies and supply chains to make the shifts that are needed to look after our planet. By providing increased transparency of timber supply and demand, we hope to play a small piece of this puzzle.

Join us next month where we’ll be talking about the root of many issues currently affecting the small-scale UK timber supply chain – difficulties in communication among individuals and organisations.