department of infrastructure and transport

INVESTMENT PLAN MAXIMIZING PRODUCT YIELDS

AND VALUES FROM CURRENT

FOREST RESOURCES

DECEMBER 2012

AUTHORS: PROFESSOR ROGER SANDS

CONTENTS 1. OBJECTIVE ........................................................................................... 3 2. SUMMARY OF RECOMMENDATIONS ................................................ 3 3. SCOPE .................................................................................................. 4 4. PREVIOUS FWPA SPONSORED RESEARCH IN THE AREA ........... 5 5. SWOT ANALYSIS ................................................................................. 9 6. LATER AGE FERTILIZATION ............................................................. 13 7. STAND DYNAMICS ............................................................................. 14 8. REMOTE SENSING ............................................................................. 15 9. OPTIMIZATION OF VALUE AT HARVEST ........................................ 16 10. RESEARCH CAPACITY ...................................................................... 18 11. INVESTMENT PLAN ........................................................................... 19 12. PREDICTED OUTCOMES ................................................................... 19 13. CONSULTATION ................................................................................. 22 14. ABBREVIATIONS AND ACRONYMS ................................................. 23 15. REFERENCES..................................................................................... 24

1. OBJECTIVE

To develop a Research and Development Investment Plan for the five-

year period 2013-2017 for maximizing product yields and values from

current forest resources.

2. SUMMARY OF RECOMMENDATIONS

1. FWPA will invest in research into later age fertilization that

increases yield and value of plantation resources.

Precedence will be given to research that considers (a) the economic

and wood flow analysis of later age fertilization, (b) the economic

evaluation of alternative fertilization strategies, (c) the potential to

redeem non-performing plantations, and (d) the assessment of nutrient

requirements of mid-rotation and second rotation hardwood

plantations.

2. FWPA will invest in research into thinning, pruning, rotation age

and coppice management that will add value to softwood and

hardwood plantation resources.

Precedence will be given to research that considers (a) the

optimization of coppice management regimes, (b) the optimization of

pulp yield rotation length, (c) the re-evaluation of rotation length for

second rotation hardwood pulp stands, and (d) the fine tuning of

fertilizer x thinning interactions.

3. FWPA will support research that optimizes the value of each stem

at harvest and also the productivity of harvesting and haulage

operations.

Precedence will be given to research that (a) optimizes pulp yield, (b)

further develops tools and optimization technology to increase

harvesting productivity and value recovery in both plantation and

native forests, (c) optimizes the value of smaller piece sizes, and (d)

optimizes the value of low performing plantations and native forests.

3. SCOPE

This research and development plan focuses on adding value to the

grower from forest resources already in the ground. Much of the focus

is on plantations but optimizing the value of harvesting in native forests

is also included.

Consequently the plan does not include tree breeding and

establishment silviculture. It does not specifically address subsequent

rotations not yet established. Second rotation decline in some

hardwood plantations is a grim reality and mostly is caused by the first

rotation having depleted soil water storage. This is because plantings

were made on marginal sites that experienced prolonged (and

continuing) drought. Even so, there are options for increasing the

water use efficiency and therefore productivity of these stands is

considered in this plan.

Because most current contracts to supply are written on the basis of

volume alone, volume production will be important in this plan.

However, there is often an implied expectation for improved wood

properties in softwood contracts. In hardwood saw log regimes

improved wood properties will add value and, indeed, if wood

properties are not satisfactory the processer may not accept the wood

at all. For pulpwood, pulp yield rather than volume is the key property.

Consequently, improved wood properties will be considered in this

plan where they will add value now or are likely to in the near future.

Ideally optimization through the value chain should benefit both

grower and producer. Post-harvest technologies that return a benefit

to the grower will be included in this plan.

This plan looks at increasing the value of current forest resources

through increasing yield, reducing costs and increasing revenue. From

an economic perspective, increasing yield will increase NPV more than

does reducing costs. In this context, increasing yield covers both

plantation productivity and optimization of value at harvest. Cost

savings through more efficient maintenance will not greatly increase

NPV.

Growers were consulted in the preparation of this plan and they were

consistent in their wish for further R&D in four areas: later age

fertilization; stand dynamics; value optimization at harvest; and, remote

sensing of stand characteristics. No recommendation will be made in

the area of remote sensing, important although it is, because this is

already incorporated in the FWPA Research and Development plan on

tools. There will be recommendations on later age fertilization and

stand dynamics and these are focused on plantations. There will be a

recommendation on value optimization at harvest and this is equally

applicable to both plantations and native forests.

No recommendations will be made in this plan that place the site

productivity of further plantation rotations at risk or increase the cost of

establishment of further rotations.

4. PREVIOUS FWPA SPONSORED RESEARCH IN THE AREA

During the period 2007-2012, FWPA invested in four projects relevant to

this plan.

(1) May, B., Smethurst, P., Carlyle, C., Mendam, D., Bruce, J. and Baillie,

C. 2009. Review of fertilizer use in Australian forestry. FWPA Project

Number PR07.4029.

This is a very comprehensive review, which shows that, in general,

fertilizing of both softwood and hardwood plantations was not

profitable at establishment but at later age (particularly at mid-

rotation) could be highly profitable. The increasing profitability with

stand age was attributed to larger relative growth responses and

shorter times to carry the cost of fertilizing with interest over the length

of the rotation. Although this review provides information on current

fertilizer use across Australia’s hardwood and softwood plantations, it is

not clear the extent to which predicted increases in yields and

profitability are actually being achieved at the operational level.

The review demonstrates that fertilizing plantations is relatively benign

compared to agriculture in off-site effects and in greenhouse gas

emissions.

Nutrition research is relatively mature for softwoods but less so for

hardwoods. The review recommends further research in 'improved

prediction and modelling of fertilizer responses, assessment of nutrient


plantations, improved economic modelling of the effects of alternative

fertiliser strategies, and application of remote sensing for broad-scale

assessment of nutritional requirements of individual stands across the

plantation estate.'

(2) Sims, N., Hopmans, P., Elms, S. and McGuire, D. 2009. Mapping

foliar nutrition in Pinus radiata from hyperspectral satellite image data.

FWPA Project Number PNC074-0708.

This study examined the use of hyperspectral satellite image data to

monitor foliar nutrition in Pinus radiata. The study was carried out in the

Rennick estate near the Victorian-South Australian border and spectral

data was compared to nutrient levels in foliar samples collected over a

range of age classes that covered a range of nutrient concentrations

(N, P, K, Fe, Zn, Cu, B) from deficient through marginal to adequate.

Models were calculated between spectral and field data. They

concluded that, except for areas of low cover (trees less than 3 years

of age), useful models of nutrient concentration could be calibrated

on field data collected from a range of age classes for several

nutrients. However, they were quite guarded in their conclusions

pointing to the limitations of Hyperion at the time of the study but

foreshadowed improvements in satellite image analysis systems in the

future that would be useful to explore. (At present date (2012)

appropriately loaded satellites have not yet been deployed).

(3) Stone, C., Turner, R., Kathuria, A., Carney, C., Worsley, P., Penman,

T., Hui-Quan Bi, Fox, J. and Watt, D. 2011. Adoption of new airborne

technologies for improving efficiencies and accuracy of estimating

standing volume and yield modelling in Pinus radiata plantations. FWPA

Project Number PNC058-0809.

This research examined the use of Lidar and airborne multispectral

cameras to produce modules that can be incorporated into existing

inventory data management systems in Pinus radiata plantations. The

techniques accurately estimated net stocked area, stem density

(stocking) and stand height. The techniques satisfactorily estimated

size and position of most individual trees. The authors were optimistic

about their results, which are probably past the experimental stage

and moving towards operational implementation. Their experiments

were carried out in Pinus radiata plantations in the Hume Region in

southern NSW but the authors considered there was much in common

between the silvicultural practices and spatial information in this study

and that in different regions and different companies in both Australia

and New Zealand. As such their results should have a widespread

application in which a final step would be specific customization for

companies/regions. Data on costs are provided. The cost efficiency

clearly depends on economies of scale. There are significant start up

and fixed costs associated with a viable Lidar/multispectral camera

capability. They estimated that the use of Lidar/multispectral camera

would cost from $1.50 per hectare for large areas to about $4 per

hectare for small areas. This compares to about $20 per hectare for

conventional inventory assessment.

(4) White, D., Battaglia, M., Bruce, J., Benyon, R., Beadle, C., McGrath,

J., Kinal, J., Crombie, S. and Doody, T. 2009. Water-use efficient

plantations – separating the wood from the leaves. FWPA Project

Number PNC073-0708.

This project was reviewed in the FWPA R&D 'investment plan for water

use efficiency, access to water resources and balanced policy

outcomes' but is also relevant to this plan.

This research examined the water use efficiency for wood production

of Pinus radiata, Eucalyptus globulus and Eucalyptus nitens plantations

in predominantly 'Mediterranean' type climates (hot dry summers and

cool moist winters) across southern Australia. It shows that both wood

production and the water use efficiency for wood production will be

increased by any means (breeding or management including

fertilization) that increases the leaf area index during the early part of

the growing season (late winter and spring). The implication is that

increasing water use under these circumstances (providing water and

not carbon and nutrients are growth limiting) will increase the water

use efficiency of wood production. It follows that the same volume of

wood could be grown using the same volume of water by planting a

smaller area of higher water availability.

The research also shows that promoting an increase in leaf area index

exposes the plantation to the risk of tree deaths during drought years

but that appropriate planting densities and thinning regimes can

control this.

FWPA investment in these projects is shown in Table 1. FWPA invested

40% and industry 31% of total funding of $875,460. Government

(Commonwealth and State) contributed the remaining 29%.

Table 1. Investment in projects partly funded by FWPA and relevant to this

plan during the period 2007-2011.

Project

number

Title FWPA

budget

Industry Govern-

ment

Total

budget

% Cont-

ribution by

FWPA

PR07

.4029

Review of fertilizer use

in Australian forestry

$67,710 Nil $43,814 $111,524 61

PNC074-

0708

Mapping foliar

nutrition in Pinus

radiata from

hyperspectral satellite

image data

$60,000 $31,525 $28,400 $119,925 50

PNC058-

0809

Adoption of new

airborne technologies

for improving

efficiencies and

accuracy of

estimating standing

volume and yield

modelling in Pinus

radiata plantations

$125,215 $186,099 $145,097 $456,411 27

PNC073-

0708

Water-use efficient

plantations –

separating the wood

from the leaves

$94,600 $52,500 $40,500 $187,600 50

Total $347,525 $270,124 $257,811 $875,460 40

5. SWOT ANALYSIS

1. Later age fertilization

Strengths Weaknesses Opportunities Threats

Good research on mid

and late rotation

fertilization in softwoods

resulting in

demonstrated gains in

yield and value

Foliar diagnostics for

fertilizer application

Application and

development of

CABALA, BPOS and FPOS

Research on mid and late age

fertilization in hardwoods is

fragmented and incomplete

Models and practice do not

satisfactorily account for variability in

climate and site

Uncertainty in response

Some hardwood plantations may be

beyond redemption

Poor knowledge of nutrient

requirements and fertilizing strategies

in second rotation pulpwood stands

No accurate generic predictive

models

Insufficient fertiliser trials to cover a

range of climates and soils

Better prediction and modelling of responses to

fertilizing mid and late rotation

Assessment of nutrient requirements of mid rotation

and second rotation hardwood plantations

Economic evaluation of alternative fertilization

strategies

Remote sensing of leaf area and foliar nutrient

concentrations (see remote sensing category

below)

Potential to redeem non-performing plantations

Under canopy weed control to make more

nutrients available to the trees

Precision application of fertilizer

Optimizing fertilizer composition and form

Use of Lidar to evaluate operational responses to

later age fertilization and to adjust future

applications accordingly

Development of soil nutrient diagnostics to predict

fertilizer responses

Economic and woodflow analysis of later age

fertilization

Public perception of

adverse off-site effects

Drought

Higher temperatures

Uncertain climate

Reduced and

fragmented research

capability

2. Stand dynamics


Good knowledge of

stand dynamics in

softwoods

Poor knowledge of stand dynamics

in hardwood solid wood regimes

(rotation age, thinning, coppicing,

pruning) in order to optimize value.

Poor knowledge of the impacts of

stand management on desirable

wood properties in hardwood solid

wood regimes

Poor knowledge of the impacts of

thinning and rotation length on pulp

yield and value at harvest in

hardwood pulpwood plantations

Optimize thinning in softwood plantations based on

crown class principles

To add value to solid wood regimes with thinning

and pruning

Optimize thinning of pulpwood plantations

Optimize pulp yield rotation length

Silviculture directed to preferred product range

Optimize spacing, thinning and rotation length to

produce optimum piece size and value at harvest

Optimize coppice management regimes

Quantify value gains from improved silviculture and

optimize spacing, thinning and rotation length

Re-evaluation of rotation length for second rotation

hardwood pulpwood stands

Fine tune thinning x fertilizer interactions

Lack of integration

along the value chain

Reduced and

fragmented research

capability

Uncertain climate

Continued drought in

the west

3. Remote sensing for resource evaluation and inventory


Lidar and associated

multispectral camera

capabilities proven and

approaching operational

Lower cost inventory

Slow deployment of satellites for

spectral imaging

Expensive start up costs

Improve the accuracy and reliability of remote

sensing of foliar nutrients across plantations

covering a range of age classes and site

conditions.

Development of remote sensing of plantation

health

Low cost pest and disease recognition

Reducing the cost of inventory

Use of remote sensing to evaluate post thinning

fertilizer responses

Use of remote sensing to evaluate genetic

responses

Use of remote sensing to evaluate 'not getting it

right'

Use of remotely sensed information for efficient, on-

ground sampling strategies (e.g. stratification,

design-based versus model-based sampling design

and inference for pre-harvest inventory)

Remote detection of problem weeds

Mobile ground-based Lidar

Use of remotely sensed information to assist in

adding value when harvesting native forests

Reduced and

fragmented research

capability

4. Optimizing value at harvest


Some research capacity

in value optimization

technology and practice

(on board computers on

harvesters, scanning

technologies for log

making)

NIR estimates of pulp

yield

Development of ALPACA

and Fastruk

Contracts to supply mostly do not

consider desirable wood properties

Low value of harvest residues for

biomass

Lack of alternate/complimentary

markets for residue, thinnings and

clearfell pulpwood material

Further development of tools and optimization

technology to increase harvesting productivity and

value recovery in both plantation and native forests

Optimizing tools to measure stiffness, density, sweep

class, and downgrade defects on all sides of the

tree

Optimizing, knots, tension wood, collapse, sawing

characteristics in hardwood solid wood regimes

Optimize pulp yield

Optimize the value of thinnings

Optimize the value of low performing forests

Develop regimes for recovering harvest residues

that do not reduce nutrient capital and site quality

(BUT see threats)

Incorporate desirable wood properties in future

contracts so that they increase value

Real time optimization of transport logistics

Consider biomass in value mix

Optimize value of smaller piece sizes

Identification and tracking of harvested logs

Link remotely sensed inventory to harvest and

haulage operations

Potential effect of

harvesting residues on

reducing site nutrient

stores and

consequent

productivity decline in

future plantations

Possibility of increased

soil erosion when

mineral soil is exposed

Reduced research

capability

6. LATER AGE FERTILIZATION

Nitrogen and phosphorus are the main nutrient deficiencies in

softwood and hardwood plantations and zinc, potassium, boron and

copper deficiencies also occur. There has been considerable research

into nutritional management of plantations in Australia and significant

gains in yield and value have been achieved through fertilization.

Variability in response remains a problem. Nutritional research in

softwood plantations is relatively mature compared to in hardwood

plantations and further research in softwoods will give diminishing but

real returns still worth chasing. In particular research that quantifies and

models responses together with economic and wood flow analysis

could add value. Even more compelling is the argument to invest in

the nutritional management of hardwood plantations.

The economic gains from fertilizer application vary widely. For example

Knott and Turner (1996) analyzed optimum fertilizer treatments across

NSW and found rates of return on investment would be expected to

exceed 8% with NPVs between $62 and $1169 per hectare. May et al

(2009) used an economic model to estimate the value of fertilizing at

various stand ages for both softwood and hardwoods. They used a

discount rate of 7.5% and estimated NPV and IRR at 0, 5, 15 and 25

years for a 31 year rotation of softwoods and at 0, 2, and 7 years for a

12 year rotation of hardwoods (assuming a type 2 fertilizer response

where the response to fertilizer continues until the end of the rotation).

They estimated that fertilizing softwood plantations at ages 15 years

and hardwood plantations at 7 years was the most profitable (NPVs

$1520 and $1272 per hectare and IRRs of 35% and 72% for softwood

and hardwood plantations respectively). The estimated profitability for

fertilization at establishment was disappointing. Estimates based on a

type 1 response (assuming a response period of 6 years) still predicted

that later age fertilization was superior to fertilization at establishment.

The advantages of later age fertilization are that the investment carries

its interest over a shorter time period, there are larger relative growth

responses and better quality (more mature) wood is laid down. Also,

later age fertilization should assist in maintaining the site productivity of

subsequent plantations (providing of course poor harvesting practice

and establishment silviculture does not negate this).

Existing tools to predict fertilizer response based on site and stand

variables (eg stand dynamics, water availability, foliar nutrient

concentrations, leaf area, soil properties) have been moderately

successful for specific regions, but not so when applied more widely.

Foliar rather than soil diagnostics are likely to be more important for

generic predictive tools. Growers need confidence that they will get a

return on the upfront costs of fertilizing. Opportunities for increasing

value are often missed because of this uncertainty. There is a need for

more robust predictive relationships that can be applied over a range

of conditions and in which growers have confidence. Decision support

systems need to be based on trials rigorous enough to detect and

model the variability in fertilizer responses. There are insufficient fertilizer

trials to cover the required range of climates and soils. Remote sensing

(see later) has the potential to characterize some of the key variables

at less cost than field measurement.

Many existing hardwood plantations are marginal or worse and will lose

money unless their yield and value can be increased within their

current rotation. The options to do so are limited and mid to late-age

fertilization is an obvious area to be examined in more detail. Desirable

wood properties should be considered in hardwood solid wood

regimes and pulp yield in pulpwood regimes. Later age fertilization

often follows thinning. There are significant areas of blue gum

pulpwood plantations in regions of Australia having 'Mediterranean

type climates' (cool moist winters and hot dry summers) where the

stand productivity is limited by summer water stress. Fertilization in

spring should increase leaf area under which circumstances water use

efficiency of wood production and overall productivity should be

increased (White et al 2009). This increases the risk of drought related

mortality but if fertilization follows thinning then this risk would probably

be reduced. Further research into this is warranted. Fertilizing is

expensive and detail on when fertilizer is not likely to bring an

economic benefit is also important research consideration.

Recommendation 1: FWPA will invest in research into later age

fertilization that increases yield and value of plantation resources.

Precedence will be given to research that considers (a) the economic

and wood flow analysis of later age fertilization, (b) the economic

evaluation of alternative fertilization strategies, (c) the potential to

redeem non-performing plantations, and (d) the assessment of nutrient


plantations.

7. STAND DYNAMICS

There is considerable experience in softwood plantations for optimizing

spacing, thinning, pruning and rotation age. There is less knowledge

and experience in hardwood plantations. Further research on thinning,

pruning and optimization of rotation age in both softwood and

hardwood saw log plantations has the potential to add value.

Improved wood properties (knots, tension wood, collapse, hardness,

stiffness, sawing characteristics) are important in solid wood hardwood

regimes. Indeed, if quality standards are not met the processor may

not accept the trees at all. Also, peeler logs will need to meet strict

quality standards to be acceptable to the processor. Pruning is an

expensive operation and any efficiency created here will make a

difference. Also, there is potential to add value by fine tuning thinning

x fertilizer interactions.

Some growers expressed an interest in adding value to pulpwood

plantations by thinning for biomass to produce larger pulpwood stems

at harvest. Other growers considered this to be fanciful.

Second rotation blue gum sites have particular problems. Second

rotation decline has occurred in many areas where the first rotation

mined stored soil water that has not been replaced because of

prolonged drought. Poor coppice management has contributed and

further research in optimizing coppice silviculture is recommended.

Recommendation 2: FWPA will invest in research into thinning, pruning,

rotation age and coppice management that will add value to softwood

and hardwood plantation resources.

Precedence will be given to research that considers (a) the

optimization of coppice management regimes, (b) the optimization of

pulp yield rotation length, (c) the re-evaluation of rotation length for

second rotation hardwood pulp stands, and (d) the fine tuning of

fertilizer x thinning interactions.

8. REMOTE SENSING

Most growers considered resource characterization using remote

sensing to be an important opportunity to reduce costs. Technologies

include both airborne and satellite based systems. Remote sensing

potentially can be used to reduce the cost of inventory, to estimate

foliar nutrient levels and to characterize stand health.

Perhaps the most promising and nearest to operational utility is Lidar.

Lidar can be both ground-based or airborne. Currently airborne Lidar is

the most effective for application to forest inventory, although a

combination of airborne and ground-based may prove useful (Hiker et

al. 2012). Airborne Lidar uses a short pulse of laser energy to measure

the shape of solid objects on the ground (Culvenor et al 2005). It can

measure stand variables such as mean tree height and basal area. It

potentially can measure individual tree variables such as height, stem

form and size, and canopy architecture. Its versatility can be improved

if used in conjunction with airborne multispectral cameras (Stone et al

2011). An airborne Lidar/multispectral camera capability has

significant start up and fixed costs but economies of scale should make

Lidar a very cost effective tool for inventory. Stone et al (2011)

considered the use of Lidar in inventory of Pinus radiata plantations to

be mature enough for it to be customized for application nation wide.

They estimated in their study of Pinus radiata plantations in the Hume

Region of NSW that the use of Lidar/multispectral camera would cost

from $1.50 per hectare for large areas to about $4 per hectare for small

areas. This compares to about $20 per hectare for conventional

inventory assessment.

The use of airborne multispectral cameras has potential for assessing

stand health (Stone et al 2004) and satellite based imaging systems for

estimating foliar nutrition (Sims et al 2009). These capabilities are not as

industry-ready as Lidar and further research to assess their operational

utility is warranted. Sub-optimal health of stands can be due to pest

and disease, drought, nutrient deficiency, weed competition, high

temperatures and interactions between each of these. Remote

sensing may be able to differentiate between the causes of poor stand

health and thereby trigger appropriate remedial action (if possible).

Many plantations are established on marginal sites and in marginal

climates and where climate appears to be changing for the worse.

The goal should be the use of remotely sensed information to inform

site-specific management. The emphasis should be on making Lidar

operational. Research in remote sensing has been promoted in the

FWPA plan on tools and as such there will be no recommendation

about remote sensing made in this plan.

9. OPTIMIZATION OF VALUE AT HARVEST

Optimization of value at harvest is relevant to both plantation and

native forests.

From a sample of 15 levy payers, 14 had delivered sales (at mill door or

wharf gate) and for 12 of these it was at 100%. Consequently there is a

very strong case that harvesting and haulage should be considered in

this plan. Improving harvest recovery and pushing product mixes to

higher values will add value to the grower and any increase in the

productivity of harvesting and haulage operations may reduce costs to

the grower. Harvesting and haulage are an expensive part of the

value chain and small efficiencies can have a large impact.

Optimizing tools include on board computers (OBC) on harvesters,

mobile scanners for log making (Walsh 2012, Walsh et al 2012, Farrell et

al 2012) and tools for identification and tracking of harvested logs.

Harvester heads that optimize wood properties are a realistic

development for the future. Real time optimization of transport logistics

would also add value.

The emphasis in this plan is on current resources. Even so, research on

optimization should be flexible enough to foreshadow and deal with

future processing opportunities and product options that can create

value for growers. Surely growers, while understandably anxious about

current profitability, are interested in securing their future and this

means understanding the current and future needs of their customers.

A recent study (Walsh 2012) in harvesting 35 year-old Pinus radiata

showed that harvest optimization technology improved the

productivity of harvesting operations by 9% (about $1.50/m3) and

increased the value of logs harvested from each tree by 3% (about

$1/m3). Although these increases are relatively modest they are real

and could significantly add to the bottom line. Further research in

optimization technologies should provide further gains. Also, revenues

from production thinnings in softwood plantations are often slim and

cost effective optimization tools have the potential to add value here.

There is an emerging market for biomass to provide renewable energy

and biomass from forests could play an important part. In the future

pulpwood may compete with biomass in optimizing returns. Low

productivity hardwood plantations that are marginal for pulp might

achieve greater value if harvested for biomass (Ghaffariyan and

Wiedemann 2011). However there are risks associated with harvesting

forest residues. Harvest residues are a low value product and, except

in special circumstances, unlikely to turn a worthwhile profit. In any

case there is the real risk of degrading site productivity, particularly on

low productivity sites. There are existing trials looking at the impact of

removing harvest residues on the nutrient capital of the site. A

significant proportion of existing blue gum plantations will not have a

second rotation. In some instances leases are required to be returned

to the farmer in a 'clean' state. Under these circumstances, biomass

from harvest residues may offer an opportunity, albeit a slim one.

However, where a second rotation is contemplated, harvesting

residues carries significant nutritional risk.

Recommendation 3: FWPA will support research that optimizes the

value of each stem at harvest and also the productivity of harvesting

and haulage operations.

Precedence will be given to research that (a) optimizes pulp yield, (b)

further develops tools and optimization technology to increase

harvesting productivity and value recovery in both plantation and

native forests, (c) optimizes the value of smaller piece sizes, and (d)

optimizes the value of low performing plantation and native forests.

10. RESEARCH CAPACITY

Research capacity in forestry recently has declined in Australia to the

extent that some areas of research can no longer be serviced and

others are in danger of losing critical mass. FWPA has the capacity to

assist in rescuing some of the critical areas of research that bring

together a range of skills of benefit to levy holders.

Despite CSIRO reducing its capacity in forest research, it is still an

important player although now somewhat fragmented. CSIRO will

probably concentrate on decision support systems and modeling and

provide research services to companies that are prepared to pay for

science-based solutions. The CRC for Forestry finished in June 2012.

Research relationships between individuals in the various institutions

within the CRC may persist to some extent although a decrease in

capability and a fragmentation of effort is inevitable. Continuation will

be achieved to some extent through the recently announced National

Centre for Future Forest Industries (NCFFI). The aspirations of this newly

created Research Centre are compatible with the recommendations

made in this plan. The Centre plans to examine 'options and

opportunities for higher value uses of the now-maturing plantation

hardwood resource, in the context of declining industrial access to

native forests' and also to focus on 'urgently needed solutions to

second rotation productivity decline in hardwood plantations,

developed in a multi-rotation, economic framework'. However, the

Centre has restricted resources and then only until 2014.

The Forest Operations capability developed in Program 3 of the CRC

will continue with a key appointment at the University of the Sunshine

Coast and the consequent development of the Australian Forest

Operations Research Alliance (AFORA). This directly addresses

recommendation 4 in this plan. The University of Canterbury

(Christchurch) also has research expertise in forest operations.

The various state institutions have research capacity relevant to this

plan. So too do the universities, particularly Melbourne, Tasmania,

Sunshine Coast and Southern Cross. Private companies, eg HVP, are

keen to collaborate and private consultants, especially in nutrition

management, have played a key role in the past and may do so in the

future. There is considerable scope for institutions, both research

providers and research purchasers, to collaborate on areas of

common interest highlighted in this plan. Some growers are sitting on

valuable data, which if shared across a range of climates and sites

could assist in developing predictive relationships. The sharing of

diagnostic nutritional data between plantation companies has already

commenced and could be further encouraged.

Research into radiata pine is very well developed compared with that

of hardwoods. The predominantly pine companies have argued they

should not be ignored in this plan, stressing the relatively large

economic contribution made by the pine industry and the capacity to

add further value through research. Research into softwoods and

hardwoods need not be mutually exclusive. Empirical tools and

financial models may be generic for both softwood and hardwood

plantations.

11. INVESTMENT PLAN

FWPA will invest $2,070,000 over the period 2013 - 2017. Table 2 shows

how this would be invested over the period. Value optimization has the

highest priority with later age fertilization and stand dynamics being

equal second. The spread between years is flexible and could be

modified depending on research proposals. FWPA will invest an

average of 40% of the funding for any approved research project,

which means that the total funding (FWPA, other cash and in-kind) will

be $5,000,175. Successful proposals will provide evidence that the

research is likely to add value to current forest resources and will be

required in their final report to demonstrate whether or not this has

been achieved. All other things being equal, preference will be given

to projects with strong industry support. This plan focuses on current

forest resources already in the ground. However, successful proposals

will demonstrate a commitment to the future.

12. PREDICTED OUTCOMES

The research recommended in this plan is relatively low in risk and with

a reasonable probability of success in terms of measurable increases in

value of current resources. Past research in both later age fertilization

and stand dynamics of softwoods have produced real gains and it is

likely that similar research in hardwoods will show cost effective

increases in value. (This does not mean that further research will not

provide additional gains with softwoods). Further research in value

optimization at harvest looks particularly promising. Harvesting and

haulage are relatively expensive and even small gains will make a big

difference to the bottom line. There are new technologies just over the

horizon and there is an expanding quality research capacity in this

area. The research is very applied and it should be able to be

adopted operationally quite quickly.

Funding should favour proposals that demonstrate a strong empirical

chance of success.

Table 2: Indicative FWPA investment by recommendations

Recommendation 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 Total

Later age fertilization $20,000 $120,000 $150,000 $150,000 $110,000 $550,000

Stand dynamics $20,000 $120,000 $150,000 $150,000 $110,000 $550,000

Value optimization $30,000 $260,000 $250,000 $220,000 $210,000 $970,000

Total $70,000 $500,000 $550,000 $520,000 $430,000 $2,070,000

13. CONSULTATION

The following were consulted in the preparation of this plan.

Australian Bluegum Plantations Pty Ltd

Commonwealth Scientific and Industrial Research Organization

Cooperative Research Centre for Forestry

Elders Forestry Limited

Forest Products Commission (WA)

Forests New South Wales

Forest Strategy Pty Ltd

Forestry South Australia

Forestry Tasmania

Global Forest Partners

Green Triangle Forest Products

Hancock Victorian Plantations

Hurford Hardwood

Nippon Paper Resources Australia Pty Ltd

NSW Department of Primary Industries

PF Olsen (Aus) Pty Ltd

Queensland Department of Agriculture, Fisheries and Forestry

Queensland Department of Environment and Resource Management

SFM Forest Products

Southern Cross University

University of Melbourne

University of the Sunshine Coast

University of Sydney

University of Tasmania

Timberlands Pacific Pty Ltd

VicForests

14. ABBREVIATIONS AND ACRONYMS

AFORA Australian Forest Operations Research Alliance

ALPACA Australian Logging Productivity and Cost Assessment

B Boron

BPOS Blue gum productivity optimization system

CABALA Carbon Balance

CRC Cooperative Research Centre

CSIRO Commonwealth Scientific & Industrial Research Organization

Cu Copper

Fastruk Fast Truck

Fe Iron

FPOS Forest productivity optimization system

FWPA Forest and Wood Products Australia

HVP Hancock Victorian Plantations

IRR Internal Rate of Return

K Potassium

Lidar Light Detection and Ranging

N Nitrogen

NCFFI National Centre for Future Forest Industries

NIR Near Infra Red

NPV Net Present Value

OBC On Board Computer

P Phosphorus

R&D Research and Development

SWOT Strengths, weaknesses, opportunities and threats

Zn Zinc

15. REFERENCES

Culvenor, D., Jupp, D.L.B., Lovell, J. and Newnham, G. 2005.

Evaluation and validation of canopy laser radar systems for native and

plantation forest inventory – summary report. FWPRDC Project No.

PN02.3902.

Farrell, R., Innes, T.C. and Harwood, C.E. 2012 Sorting Eucalypt nitens

plantation logs using acoustic wave velocity. Australian Forestry 75; 22-

30.

Ghaffariyan, M.R. and Wiedemann, J. 2011. Harvesting low-

productivity eucalypt plantations for biomass. CRC for Forestry Bulletin

19.

Hiker, T., Coops, N.C., Newnham, G.J., Leeuwen. M.van, Wulder, M.A.,

Stewart, J. and Culvenor, D.S. 2012. Comparison of Terrestrial and

Airborne LiDAR in Describing Stand Structure of a Thinned Lodgepole

Pine Forest. Journal of Forestry 110: 97-104(8).

Knott, J and Turner, J, 1990. Fertilizer usage in Forestry Commission of

N.S.W. exotic conifer plantations 1955-1989. Technical Paper - Forestry

Commission of NSW. No. 51, 98 pp.

Sims, N., Hopmans, P., Elms, S. and McGuire, D. 2009. Mapping foliar

nutrition in Pinus radiata from hyperspectral satellite image data. FWPA


Stone, C., Turner, R., Kathuria, A., Carney, C., Worsley, P., Penman, T.,

Hui-Quan Bi, Fox, J. and Watt, D. 2011. Adoption of new airborne

technologies for improving efficiencies and accuracy of estimating

standing volume and yield modelling in Pinus radiata plantations. FWPA


Walsh D. (2012) Quantifying the value recovery improvement using a

harvester optimiser. CRC for Forestry, Bulletin 26. 3pp.

Walsh D., Carter P. and Ardille, S. 2012. Evaluation of the Hitman PH330

Acoustic Assessment System for Harvesters. CRC for Forestry, Bulletin 25.

4pp.

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