forestry investment

studdlymurphy

Hi All,
I have been given the chance of buying 75 acres of land good land with some wet areas for 90k, so 1200 per acre. What are your opionions on this is it worth investing for forestry? I am a farmer but this land is too far away from my home to farm so I was thinking of planting it with trees and taking an income from it.
What value will I get from thinnings and how often can I take them?
What is involved in selling the trees after the 20 years?
Is it possible to replant after the 20 years again with trees?
Any other ideas that would suite would be a big help.
Thanks in advance.

Massey10

studdlymurphy wrote: »

Hi All,
I have been given the chance of buying 75 acres of land good land with some wet areas for 90k, so 1200 per acre. What are your opionions on this is it worth investing for forestry? I am a farmer but this land is too far away from my home to farm so I was thinking of planting it with trees and taking an income from it.
What value will I get from thinnings and how often can I take them?
What is involved in selling the trees after the 20 years?
Is it possible to replant after the 20 years again with trees?
Any other ideas that would suite would be a big help.
Thanks in advance.

You would have to replant after 20 years but it would be more like 40 years before you would have a good forest .You will not get paid for replanting or grants of any sort. The thinning will not make you much money .About 8 or 9k per acre when ready for clear fell and about 10% of this will be the cost to replant

ford2600

You sure on those figures?
Sounds cheap for good land.

If it is enclosed ground, you can get a premium payment of €145/ac/year for conifer. Grant for planting and establishment costs also.

Almost 11k per year. Over 20 years that gives you free land with a good crop "if" managed correctly.

Other things to consider
1. Good road access to get forestry equipment in
2. Access to market to get wood sold.
3. In 20 years you'll only be at thinning stage. 35 years typically for final harvest
4. Get an independent forester to advise you now. Couple of hundered euro well spent if you get a good one now.

studdlymurphy

Any recomendations on a good forestry consultant in the Tipp area?

studdlymurphy

ford2600 wrote: »

You sure on those figures?
Sounds cheap for good land.
.QUOTE]

The price figures are correct

Farmer Pudsey

Forestry grant would be 10.8K/year. If you have SFP you may be able to transfer it onto it and purchase more for your existing land. Not sure if you can buy SFP and attach it to land and then plant. If you have SFP attached to it even for five years it would give a good return. 10K/year would pay back 100K over 15 years @ an average interest rate of 5%. If you could attach 250/HA SFP this would generate 7.5K/year extra.

lucky john

Take the hand of that seller quick. €1200 is a steal even if some is wet. Forget about planting it. 2 options to think of. Buy at €1200 and sell in a year to some one else, even for forest would be €3000...€4000 an acre. pay the tax and your still good.
2nd..Assuming the SFP comes with it or you can get it, buy and claim the new SFP of say €200 an hectare. you would still get €100 an acre without maps to set the land. thats €16,000 per annum. even if you borrow the€90000 to buy it the land is paid for after 6 years. you will still have a good income on it after that for years to come.

Jack180570

studdlymurphy wrote: »

Hi All,
I have been given the chance of buying 75 acres of land good land with some wet areas for 90k, so 1200 per acre. What are your opionions on this is it worth investing for forestry? I am a farmer but this land is too far away from my home to farm so I was thinking of planting it with trees and taking an income from it.
What value will I get from thinnings and how often can I take them?
What is involved in selling the trees after the 20 years?
Is it possible to replant after the 20 years again with trees?
Any other ideas that would suite would be a big help.
Thanks in advance.

The land looks exceedingly cheap.
If it is not bogland with heather and mooregrass, and is rushy or better and it will qualify for forestry approved from the Department then you are on a winner.
If in addition the land was submitted for SPS in 2008 and the applicant was paid sps then it is even better news as you will be able to get both forestry premiums AND sps on the land if you plant it.
The forestry premium for Sitka Spruce on rushy land is 173 ac. You can buy entitlements also, , average value nationally is 110 ac...
This would mean 13k in premiums and 8k in Sps. .. 21k per year
Thinning income will depend on quality of land. .
Quality of planting and management. .. honesty and knowledge of your forestry management company
Tomorrow I am getting a third thinning done on a site planted in 1994... income so far. .. first thin 80ac... second thin 130 ac... third thin expecting 225 ac
If you want more information or want to call down to chat and see the forest thinning just PM me

Massey10

Jack180570 wrote: »

The land looks exceedingly cheap.
If it is not bogland with heather and mooregrass, and is rushy or better and it will qualify for forestry approved from the Department then you are on a winner.
If in addition the land was submitted for SPS in 2008 and the applicant was paid sps then it is even better news as you will be able to get both forestry premiums AND sps on the land if you plant it.
The forestry premium for Sitka Spruce on rushy land is 173 ac. You can buy entitlements also, , average value nationally is 110 ac...
This would mean 13k in premiums and 8k in Sps. .. 21k per year
Thinning income will depend on quality of land. .
Quality of planting and management. .. honesty and knowledge of your forestry management company
Tomorrow I am getting a third thinning done on a site planted in 1994... income so far. .. first thin 80ac... second thin 130 ac... third thin expecting 225 ac
If you want more information or want to call down to chat and see the forest thinning just PM me

Whats sps

Jack180570

Massey10 wrote: »

Whats sps

SPS... is the Single Payment Scheme, it pays Single Farm Payment to farmers based on the 'entitlements' they have established or have bought. To be eligible the farmer has to have one eligible hectare of land for each entitlement he/she has.

CharlieCooper

Jack180570 wrote: »

The land looks exceedingly cheap.
If it is not bogland with heather and mooregrass, and is rushy or better and it will qualify for forestry approved from the Department then you are on a winner.
If in addition the land was submitted for SPS in 2008 and the applicant was paid sps then it is even better news as you will be able to get both forestry premiums AND sps on the land if you plant it.
The forestry premium for Sitka Spruce on rushy land is 173 ac. You can buy entitlements also, , average value nationally is 110 ac...
This would mean 13k in premiums and 8k in Sps. .. 21k per year
Thinning income will depend on quality of land. .
Quality of planting and management. .. honesty and knowledge of your forestry management company
Tomorrow I am getting a third thinning done on a site planted in 1994... income so far. .. first thin 80ac... second thin 130 ac... third thin expecting 225 ac
If you want more information or want to call down to chat and see the forest thinning just PM me

Hi Jack,
I also have forestry planted in 1994 & haven't had any thinnings yet.
I am hoping to thin next year ( year 20).
How did you manage to get 3 thinnings
already? Is the land really good quality?
Did you thin yourself or use a forestry company ?
When do you expect to clear fell !
I am just getting into farming also & am interested in learning if I can qualify for other payment (eg SPS or SFP, etc) on the land .
I also have other forestry & about 20 acres of unplanted farmland .
Charlie

Massey10

Jack180570 wrote: »

SPS... is the Single Payment Scheme, it pays Single Farm Payment to farmers based on the 'entitlements' they have established or have bought. To be eligible the farmer has to have one eligible hectare of land for each entitlement he/she has.

So i am right in saying that i could move entitlements from lost rented tillage land to my forestry land

Jack180570

Massey10 wrote: »

So i am right in saying that i could move entitlements from lost rented tillage land to my forestry land

Yes I believe you can... having said that I would write to the SPS people asking that question and have their reply back before making final decision... just in case

barryfishir

Hi guys sorry to butt in but you all seem to know lots about forestry!!!Am in Kerry looking to start up a wood fuel business with emphasis on low moisture content.Want to contact the grower direct to buy timber from them rather than the BIG boys!Anyone know where this infomation would be,or how it could be obtained.Thanks

Bawnmore_Ent.

What are your thoughts on 66 acres of forestry planted in 2006, for sale @ €90k. Farmers grant of €10,000

Is this good value?

What other costs would you have, aside from insurance.

Is the norm 20 years for such return, if so this has 12 to go.

Thanks

TheBody

Bawnmore_Ent. wrote: »

What are your thoughts on 66 acres of forestry planted in 2006, for sale @ €90k. Farmers grant of €10,000

Is this good value?

What other costs would you have, aside from insurance.

Is the norm 20 years for such return, if so this has 12 to go.

Thanks

There are a lot of things to consider. For example:

What sort of trees are planted?

What condition are they in at the moment?

Have they been pruned/shaped and taken care of?

Are the fences in decent condition?

Is there good access to the trees?

Have they grown well since they have been planted?

etc....

Farmer Pudsey

Bawnmore_Ent. wrote: »

What are your thoughts on 66 acres of forestry planted in 2006, for sale @ €90k. Farmers grant of €10,000

Is this good value?

What other costs would you have, aside from insurance.

Is the norm 20 years for such return, if so this has 12 to go.

Thanks

Yes I think grants are for 20 years. Sounds like good value. 90K borrowed over 12 years @an fixed interest rate of 5% ( heard of 10 year money at 3% would cost 27 add the 90K and it would pay for itself. If trees are growing well and access is Ok then it sounds like a good investment. I think you start to thin after year 15 and nowadays even the first thinnings leave a small margin.

Jack180570

From the guide price of €1200 ac it would seem to indicate that the land cannot be planted due to some restrictions (calcaerous soil, hen harrier designation, acid sensitive area etc). If it is suitable for forestry then it is an absolute steal (current market value on enclosed forestry land is somewhere between €3500 and €4000ac).

Assuming the land is reasonably good quality for forestry then thinning could start as early as yr 15 and continue on a 3-4yr cycle thereafter until around yr 30-34 at which time the crop would be ready to be clearfelled.

The income from first and second thinnings will depend on the general quality of the crop and the timber prices at the time. Your aim for these thinnings would be to remove the poorer trees so that the growth will be put on the better trees that will eventually be removed in subsequent thinnings and at the clearfell as high value sawlog and pallet wood. Currently nearly every thinning is returning a positive revenue (it will not cost you anything).

A huge proportion of the return from forestry is down to two factors - the quality of the crop and how well it is managed. After that the most significant factor are the timber prices at the time of thinning/clearfell. In my opinion it is very important that you engage a Forester/Forestry Company who has EXPERIENCE in thinning, remember that most Foresters/Forestry Companies have far more experience in planting than thinning, and some have little enough interest in thinning due to the low margins for the Forester/Forestry Company.

I found this video on youtube which you might find interesting https://www.youtube.com/watch?v=os03vle2M5Q

Getting back to your question on the economics, yes it is a very profitable enterprise when well done. If you can buy the land at that price an it is suitable for forestry it is a no brainer.

The new forestry scheme will pay premiums for 15 years rather than the current 20 years but at a higher rate (€200/ac has been mentioned).
The rotation of the forest would be around 30 years depending on a number of factors such as management, productivity and stability.
The clearfell value of a sitka spruce forest can range from €3,000ac to €12,000ac depending on a whole range of factors.

Hope this has been helpful

Jack

DieselPowered

Forestry investment with grants and schemes is a big topic of discussion at the moment. Has anyone done any research and decided to go ahead with planting this year? Seems like a good way to make income with not much effort where farming may not be your primary business.

timfromtang

DieselPowered wrote: »

Forestry investment with grants and schemes is a big topic of discussion at the moment. Has anyone done any research and decided to go ahead with planting this year? Seems like a good way to make income with not much effort where farming may not be your primary business.

from our own experience, if you plan to do any of the forest operations yourself (i.e. you do the work and hence earn the money for yourself that otherwise would be paid to contractors) then there is a great deal of effort and learning involved with loads and loads of pullin an draggin, but really rewarding work.

tim

DieselPowered

timfromtang wrote: »

from our own experience, if you plan to do any of the forest operations yourself (i.e. you do the work and hence earn the money for yourself that otherwise would be paid to contractors) then there is a great deal of effort and learning involved with loads and loads of pullin an draggin, but really rewarding work.

tim

I would not be doing the work (planting) here myself, would get contractors to do the necessary installation etc, I would just be accommodating with the land to be planted.

Big Davey

Very interesting video.

Jack180570 wrote: »

From the guide price of €1200 ac it would seem to indicate that the land cannot be planted due to some restrictions (calcaerous soil, hen harrier designation, acid sensitive area etc). If it is suitable for forestry then it is an absolute steal (current market value on enclosed forestry land is somewhere between €3500 and €4000ac).

Assuming the land is reasonably good quality for forestry then thinning could start as early as yr 15 and continue on a 3-4yr cycle thereafter until around yr 30-34 at which time the crop would be ready to be clearfelled.

The income from first and second thinnings will depend on the general quality of the crop and the timber prices at the time. Your aim for these thinnings would be to remove the poorer trees so that the growth will be put on the better trees that will eventually be removed in subsequent thinnings and at the clearfell as high value sawlog and pallet wood. Currently nearly every thinning is returning a positive revenue (it will not cost you anything).

A huge proportion of the return from forestry is down to two factors - the quality of the crop and how well it is managed. After that the most significant factor are the timber prices at the time of thinning/clearfell. In my opinion it is very important that you engage a Forester/Forestry Company who has EXPERIENCE in thinning, remember that most Foresters/Forestry Companies have far more experience in planting than thinning, and some have little enough interest in thinning due to the low margins for the Forester/Forestry Company.

I found this video on youtube which you might find interesting https://www.youtube.com/watch?v=os03vle2M5Q

Getting back to your question on the economics, yes it is a very profitable enterprise when well done. If you can buy the land at that price an it is suitable for forestry it is a no brainer.

The new forestry scheme will pay premiums for 15 years rather than the current 20 years but at a higher rate (€200/ac has been mentioned).
The rotation of the forest would be around 30 years depending on a number of factors such as management, productivity and stability.
The clearfell value of a sitka spruce forest can range from €3,000ac to €12,000ac depending on a whole range of factors.

Hope this has been helpful

Jack

Midlandsman80

http://m.independent.ie/business/farming/buyers-see-value-in-170k-for-westmeath-forestry-jim-obrien-30322805.html

This sale puts a value on 18 year old forestry of 2.5k pa.
I am expecting to be putting an offer on 30 similar acres in the very near future, also in westmeath and similar planting.

What might change the price from this benchmark?
I am thinkng access, how well managed it has been and what premiums are left?
Anything else too change this price per acre up or down 50% from this benchmark?

fepper

that was dirt cheap,just shows really how forestry collapses the full value of land no matter how its quality is

fergus1001

Are you sure this land isn't in a hen harrier area or an SAC? (You won't be able to plant)

I can check if you pm me the address of the land

timfromtang

fepper wrote: »

that was dirt cheap,just shows really how forestry collapses the full value of land no matter how its quality is

Hopefully, if our own experience in Tang is anything to go by, once folk realise the potential for making a living from forestry (by adding value to the timber before sale) this will change over the coming years. At the moment our privately owned forest rescource in Ireland is nearly all less than 25 years old, as these trees "grow up" and those who manage them learn to more fully utilise their potential land planted with trees will become at least as desirable (and hence valuable) as farmland. Most folk have no problem imagining how to and making a living from agriculture, however it appears that many do not have similar ideas about forestry.

We have just purchased a Logosol sawmill with these ideas in mind, larch planks anyone??
tim

Effects

Where are you based with your mill?

timfromtang

Effects wrote: »

Where are you based with your mill?

We are right in the middle of the Island of Ireland, in Tang.
tim