Is forestry worthwhile? Compared to renting out land

Awkwardstroke · 16-06-2020 9:21pm #1

Hi,

I’m looking into buying a farmhouse plus 40 acres of middling land (heavy grassland) in Munster and then applying for a forestry grant (softwoods) and planting it.

My question is the comparison with leasing this land to an intensive dairy farm/beef farmer?

While I note the generous premiums and tax incentives for forestry, I’m worried about the negative impact of planting on the original land value (4-5k acre).

Advice welcome

Birdnuts · 16-06-2020 9:31pm

That kind of land should support a more diverse mix of species which would attract a higher grant

Dinzee Conlee · 16-06-2020 9:39pm

Leasing farm land for 5+ years is tax free, so you should factor that into your calculations.

Farmland I think would hold its value better than forestry, in the short term at least.

Awkwardstroke · 19-06-2020 11:46am

Thanks everyone,

I also wonder as to the future value/rental income of agriculture land due to negative prospects for Irish Ag (reduced CAP funds and env pressure).

Birdnuts · 19-06-2020 4:08pm

Awkwardstroke wrote: »

Thanks everyone,

I also wonder as to the future value/rental income of agriculture land due to negative prospects for Irish Ag (reduced CAP funds and env pressure).

Yes - I think the new CAP and the reality of ever decreasing margins from conventional farming will finally bring some reality to bare on land values and rents in this country

Awkwardstroke · 19-06-2020 6:42pm

Birdnuts wrote: »

Yes - I think the new CAP and the reality of ever decreasing margins from conventional farming will finally bring some reality to bare on land values and rents in this country

I would prefer to plant native woodlands species (biodiversity etc) yet have been told that economically they can’t compete with softwoods. Unless the country supports the public good benefits (landscape, water and biodiversity) its still a hard sell.

.

Birdnuts · 20-06-2020 3:33pm

Awkwardstroke wrote: »

I would prefer to plant native woodlands species (biodiversity etc) yet have been told that economically they can’t compete with softwoods. Unless the country supports the public good benefits (landscape, water and biodiversity) its still a hard sell.

.

I wouldn't necessarily assume that - I had a forestry inspector out on my own place last year and he told me many of the softwood plantations planted in the last 40 years are near write offs due to poor site selection etc. The likes of fireswood and other offcuts from hardwood plantations via thinnings etc. will certainly be more valuable then anything that will come from a failing softwood equivalent. Sadly in this country the approach to forestry by state agencies is still rather primitive with little or no work gone into hardwood growing/marketing compared to other EU countries

Awkwardstroke · 22-06-2020 7:03am

Birdnuts wrote: »

I wouldn't necessarily assume that - I had a forestry inspector out on my own place last year and he told me many of the softwood plantations planted in the last 40 years are near write offs due to poor site selection etc. The likes of fireswood and other offcuts from hardwood plantations via thinnings etc. will certainly be more valuable then anything that will come from a failing softwood equivalent. Sadly in this country the approach to forestry by state agencies is still rather primitive with little or no work gone into hardwood growing/marketing compared to other EU countries

Thanks for this, although the ash dieback story would worry me with hardwoods. As Hurley/firewood demand and fast growth rates of Ash made this a possible interesting option pre the dieback issue.

Alternative hardwood species seem much slower growing.

CJhaughey · 22-06-2020 8:22am

Awkwardstroke wrote: »

Thanks for this, although the ash dieback story would worry me with hardwoods. As Hurley/firewood demand and fast growth rates of Ash made this a possible interesting option pre the dieback issue.

Alternative hardwood species seem much slower growing.

Alder is very fast growing IME, good for soils that are low in nutrients as it is nitrogen fixing.

amens · 22-06-2020 8:48pm

CJhaughey wrote: »

Alder is very fast growing IME, good for soils that are low in nutrients as it is nitrogen fixing.

I have ten year old alder and it does grow pretty quickly. It also grows straighter than most hardwoods but no way as straight as spruce. I'll be clearfelling spruce in a few years and there are sawmills there to take it. Who will take my mature alder??? If I were to go back in time I'd plant spruce. It is of course much nicer to be in the alder plantation but forestry has to pay as well.

CJhaughey · 23-06-2020 11:43am

I agree that Alder hasn't been looked on as a desirable timber but that is not the fault of the wood but the agencies involved.
Seemingly in other countries it has started to become more accepted as a desirable timber.
Forestry here seems to be solely devoted to conifers to the detriment of everyone including the forestry owner as well as an amenity.
http://www.hardwooddistributors.org/postings/the-rise-of-alder-a-wood-highlight-of-alder-lumber

blue5000 · 23-06-2020 12:34pm

The advantage we have for spruce is our climate. It really does grow twice as fast here compared to Scandinavia. I have a mix of Alder, Norway and Sitka. Alder is really only suitable for really wet, poor ground. As for it's uses, coffins! Even though it is deciduous the wood is very soft.

Don't forget to allow for a possible future carbon credit, and as environmental pressure increases on intensive agriculture, demand for rented land will increase IMHO.

OP do you mind me asking what age are you? Reason for asking is grants are only paid for 15 years, I think this is why so few hardwoods are being planted.

amens · 23-06-2020 1:04pm

blue5000 wrote: »

The advantage we have for spruce is our climate. It really does grow twice as fast here compared to Scandinavia. I have a mix of Alder, Norway and Sitka. Alder is really only suitable for really wet, poor ground. As for it's uses, coffins! Even though it is deciduous the wood is very soft.

Don't forget to allow for a possible future carbon credit, and as environmental pressure increases on intensive agriculture, demand for rented land will increase IMHO.
.

I think you are too harsh on Alder. I think Alder grows best on heavy soil but if it is really really wet the alder won't be that great either. When I compare the alder growing on drier parts of my site with those on wetter the alder on the drier parts is much better. Some of the site was a silage field. Alder might be the greatest timber ever but if the infrastructure isn't there to harvest, market and sell it it doesnt matter how good it is. I'm not an entrepreneur or a salesman. I just want to produce a crop of trees and get paid for it. The OP should be aware that broadleaves with take more intensive management and attention from him if he wants a successful crop. He must select crop trees, high prune them, remove competitors, all without being able to send in a big machine to do the job.

As for carbon credits I personally think the trees will grow more with higher levels of carbon in the atmosphere. Carbon is a nutrient rather than a pollutant. Life was most abundant on the planet when levels were at 1200 ppm and during certain periods levels were several times that. Anyway if you are fixated with carbon if you'll pardon the pun and want credits for fixing it then spruce is going to do that better than the hardwoods, at least until the heavy harvesting equipment move in burning loads of diesel all along the way.

Large bottle small glass · 23-06-2020 1:07pm

We planted our worst 20 acres, probably typical for my father's generation. He was late 60's when he planted in 1994.

Adjacent and similarly poor land is being leased by a large dairy farmer for last year for circa 250/acre income tax free. If you are on the edges of dairy country it is really hard to advocate for forestry currently.

The felling license fiasco, no real market for lots of hardwoods and a big change imminent in environmental terms for spruce growing/clearfelling, ash dieback etc etc is making forestry a hard sell.

A neighbour asked me recently would I recommend planting and my honest answer was no.

I can remember teagasc advisers, inspectors for department etc being very anti growing ash trees for hurleys. All about the 78/80 year rotation and commercial. Except there is next to no other market there for ash other than hurleys and firewood.

Plenty environmentally friendly hardwoods will grow but try making a return on them

Birdnuts · 23-06-2020 3:03pm

blue5000 wrote: »

The advantage we have for spruce is our climate. It really does grow twice as fast here compared to Scandinavia. I have a mix of Alder, Norway and Sitka. Alder is really only suitable for really wet, poor ground. As for it's uses, coffins! Even though it is deciduous the wood is very soft.

Don't forget to allow for a possible future carbon credit, and as environmental pressure increases on intensive agriculture, demand for rented land will increase IMHO.

OP do you mind me asking what age are you? Reason for asking is grants are only paid for 15 years, I think this is why so few hardwoods are being planted.

Fast growing also means poorer quality timber in many cases - many of the spruce plantations in my part of North Mayo are near write offs due to this with the value of the timber that makes it to the sawmill barely covering the felling costs. At least with hardwoods you are guaranteed good quality firewood from thinnings, plus there is a market for certain offcuts in artisan furniture making etc. Sadly if we had developed the industry properly back in the 60's would would now be reaping the rewards via the strong demand for quality mature hardwoods in China and the likes eg. French Oak is making serious money in that market atm

Birdnuts · 23-06-2020 3:04pm

Large bottle small glass wrote: »

We planted our worst 20 acres, probably typical for my father's generation. He was late 60's when he planted in 1994.

Adjacent and similarly poor land is being leased by a large dairy farmer for last year for circa 250/acre income tax free. If you are on the edges of dairy country it is really hard to advocate for forestry currently.

The felling license fiasco, no real market for lots of hardwoods and a big change imminent in environmental terms for spruce growing/clearfelling, ash dieback etc etc is making forestry a hard sell.

A neighbour asked me recently would I recommend planting and my honest answer was no.

I can remember teagasc advisers, inspectors for department etc being very anti growing ash trees for hurleys. All about the 78/80 year rotation and commercial. Except there is next to no other market there for ash other than hurleys and firewood.

Plenty environmentally friendly hardwoods will grow but try making a return on them

With respect Ash is not going to do very well on poor land anyway

tabby aspreme · 23-06-2020 6:42pm

Teagasc and GMIT letterfrack are doing some research into using small diameter Alder logs for furniture making, Alder has a reddish-brown color, very similar to Cherry and would be used as a substitute for Cherry, it's also the easiest tree I have grown, just plant it, spray around it for two years and away it grows, the frost in May had no effect on it either.

amens · 24-06-2020 9:52am

Birdnuts wrote: »

Fast growing also means poorer quality timber in many cases - many of the spruce plantations in my part of North Mayo are near write offs due to this with the value of the timber that makes it to the sawmill barely covering the felling costs. At least with hardwoods you are guaranteed good quality firewood from thinnings, plus there is a market for certain offcuts in artisan furniture making etc. Sadly if we had developed the industry properly back in the 60's would would now be reaping the rewards via the strong demand for quality mature hardwoods in China and the likes eg. French Oak is making serious money in that market atm

I put it to you that these plantations didn't make money not because the spruce grew too fast but because it grew too slowly and at clearfell the diameter of the logs was so small that the sawlog percentage which is the most valuable was very low. Obviously fast grown spruce is weaker than slowly grown spruce but it seems to still have enough strength to satisfy the requirements for construction grade timber. Those plantations were probably on exposed sites at elevation on poor soil with poor access and if spruce didn't grow well there hardwoods definitely wouldn't.

I bought the technical guide from france- oak:fine timber in 100 years - and there seems to be quite a bit to its management. I can't imagine much of the oak that is planted here meeting the standard required for quality timber. Otherwise it's just firewood.

My experience is most other farmers don't even like trees so give them something easy to manage like spruce. I know a dairy farmer and when he inspects land I've reclaimed leaving outcrops of mature oak intact he shakes his head in disgust and says he'd clear all that away. He says to me " you seem to like trees" as if he were diagnosing a mental illness.

blue5000 · 26-06-2020 1:36pm

OP if you are planting I think you have to go diverse because of pests/disease. Who'd have thought 20 years ago that Ash will be wiped out in Ireland?

CJhaughey · 26-06-2020 10:15pm

blue5000 wrote: »

OP if you are planting I think you have to go diverse because of pests/disease. Who'd have thought 20 years ago that Ash will be wiped out in Ireland?

This is key, there are a lot of insects that can devastate a monoculture and I have feeling that due to lax bio-security here and in the EU generally there will be problems in the future due to this.

lalababa · 26-06-2020 10:21pm

Is larch anyway feasible?

amens · 27-06-2020 8:03am

lalababa wrote: »

Is larch anyway feasible?

There is the disease phytophthera ramorum. I don't think it's planted anymore. I've some jap larch with the spruce. It allows alot more light in to the ground as it loses its needles in winter so you get more stuff growing on the ground which is more pleasant. However many of the stems are crooked so that in itself would disqualify it. The growth rate would be less than that of spruce as well.

amens · 27-06-2020 8:35am

Awkwardstroke wrote: »

My question is the comparison with leasing this land to an intensive dairy farm/beef farmer?

While I note the generous premiums and tax incentives for forestry, I’m worried about the negative impact of planting on the original land value (4-5k acre).

Advice welcome

If you can get it for 4 and plant spruce I don't think there will be much devaluation.
I saw a presentation on the native woodland scheme and it was said that while a spruce plantation could be worth 4k after planting the poor native woodland would be worth 800/acre. I'd consider the premium as compensation for any devaluation. I'd sell the agricultural land to the forest service and they'd pay me back with afforested land plus the premia. I'd consider the thinnings and clearfell revenue divided by the age at clearfell and the number of acres to be the annual yield/acre. The yield from spruce is supposed to be second only to dairying.

On the premium for 15 years I would just note that the euro 15 years ago was a much stronger currency buying an ounce of gold for less than €400. You'd need €1600 now so that is a massive devaluation in the euro due to the monetary financing of the ECB since the financial crisis which is ongoing to this day to an ever increasing extent. As states pile on the debt the central bank will print more euro to buy their bonds that no private investor wants. Anyway the point is that in 15 years time the state might still honour its obligations and pay you the nominal €500/ha premium the purchasing power of that 500 will be considerably less than the 500 you got in year one. If you lease it out you can always renegotiate after a few years. Good luck negotiating with the forest service.

jackboy · 27-06-2020 9:35am

lalababa wrote: »

Is larch anyway feasible?

Larch roots are shallower than spruce roots so larch trees have a higher risk of being knocked over in strong winds. They are really only suitable in very sheltered spots.

TalusWood · 22-12-2020 4:00am

blue5000 wrote: »

OP if you are planting I think you have to go diverse because of pests/disease. Who'd have thought 20 years ago that Ash will be wiped out in Ireland?

Has anyone experimented with ash coppice to avoid this problem?

Accidentally · 22-12-2020 9:04am

TalusWood wrote: »

Has anyone experimented with ash coppice to avoid this problem?

Ash coppice will not avoid the problem. I'm seeing ash saplings dying, so it's not just older growth that dies.

Banana Republic 1 · 22-12-2020 9:13am

Awkwardstroke wrote: »

Hi,

I’m looking into buying a farmhouse plus 40 acres of middling land (heavy grassland) in Munster and then applying for a forestry grant (softwoods) and planting it.

My question is the comparison with leasing this land to an intensive dairy farm/beef farmer?

While I note the generous premiums and tax incentives for forestry, I’m worried about the negative impact of planting on the original land value (4-5k acre).

Advice welcome

Why not Irish hardwoods

There are changes coming to cap etc which will see money going into bio diversity and there’s the whole carbon credit industry.
Many would say there is to much work in maintaining hardwoods for example in saleable condition, well theres plenty of work and heartache in dairying too. The other standard is “it a shame to plant good land”, my answer to that is are you in the farming business or the money making business.

I’m not here as some class of gombean man I’m simply saying that if you want a return from your investment, which this land is, you should look at all angles especially with Europe pushing this green new deal. Maybe rent it out short term with the intention of seeing what time will bring.

Is forestry worthwhile? Compared to renting out land

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