INVESTMENT PLAN MAXIMIZING PRODUCT YIELDS AND VALUES FROM CURRENT FOREST RESOURCES DECEMBER 2012 AUTHORS: PROFESSOR ROGER SANDS

Transcription

1 INVESTMENT PLAN MAXIMIZING PRODUCT YIELDS AND VALUES FROM CURRENT FOREST RESOURCES DECEMBER 2012 AUTHORS: PROFESSOR ROGER SANDS

2 CONTENTS 1. OBJECTIVE SUMMARY OF RECOMMENDATIONS SCOPE PREVIOUS FWPA SPONSORED RESEARCH IN THE AREA SWOT ANALYSIS LATER AGE FERTILIZATION STAND DYNAMICS REMOTE SENSING OPTIMIZATION OF VALUE AT HARVEST RESEARCH CAPACITY INVESTMENT PLAN PREDICTED OUTCOMES CONSULTATION ABBREVIATIONS AND ACRONYMS REFERENCES... 24

3 1. OBJECTIVE To develop a Research and Development Investment Plan for the fiveyear period 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.

4 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

5 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 , FWPA invested in four projects relevant to this plan. (1) May, B., Smethurst, P., Carlyle, C., Mendam, D., Bruce, J. and Baillie, C Review of fertilizer use in Australian forestry. FWPA Project Number PR 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 midrotation) 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 requirements of mid-rotation and second rotation hardwood 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 Mapping foliar nutrition in Pinus radiata from hyperspectral satellite image data. FWPA Project Number PNC

6 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 Adoption of new airborne technologies for improving efficiencies and accuracy of estimating standing volume and yield modelling in Pinus radiata plantations. FWPA Project Number PNC 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 Water-use efficient

7 plantations separating the wood from the leaves. FWPA Project Number PNC 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%.

8 Table 1. Investment in projects partly funded by FWPA and relevant to this plan during the period Project number PR PNC PNC PNC Title Review of fertilizer use in Australian forestry Mapping foliar nutrition in Pinus radiata from hyperspectral satellite image data Adoption of new airborne technologies for improving efficiencies and accuracy of estimating standing volume and yield modelling in Pinus radiata plantations Water-use efficient plantations separating the wood from the leaves FWPA budget Industry Government Total budget % Contribution by FWPA $67,710 Nil $43,814 $111, $60,000 $31,525 $28,400 $119, $125,215 $186,099 $145,097 $456, $94,600 $52,500 $40,500 $187, Total $347,525 $270,124 $257,811 $875,460 40

9 5. SWOT ANALYSIS 1. Later age fertilization Strengths Weaknesses Opportunities Threats Research on mid and late age Better prediction and modelling of responses to fertilization in hardwoods is fertilizing mid and late rotation fragmented and incomplete 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 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 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 Public perception of adverse off-site effects Drought Higher temperatures Uncertain climate Reduced and fragmented research capability Insufficient fertiliser trials to cover a range of climates and soils 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

10 2. Stand dynamics Strengths Weaknesses Opportunities Threats Poor knowledge of stand dynamics Optimize thinning in softwood plantations based on in hardwood solid wood regimes crown class principles (rotation age, thinning, coppicing, pruning) in order to optimize value. Good knowledge of stand dynamics in softwoods 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 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

11 3. Remote sensing for resource evaluation and inventory Strengths Weaknesses Opportunities Threats Slow deployment of satellites for spectral imaging Lidar and associated multispectral camera capabilities proven and approaching operational 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. Reduced and fragmented research capability Lower cost inventory 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, onground 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

12 4. Optimizing value at harvest Strengths Weaknesses Opportunities Threats Contracts to supply mostly do not consider desirable wood properties 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 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

13 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

14 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 requirements of mid-rotation and second rotation hardwood 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,

15 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

16 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

17 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/m 3 ) and increased the value of logs harvested from each tree by 3% (about $1/m 3 ). 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

18 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 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 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

19 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 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

20 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.

21 Table 2: Indicative FWPA investment by recommendations Recommendation 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

22 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

23 14. ABBREVIATIONS AND ACRONYMS AFORA ALPACA B BPOS CABALA CRC CSIRO Cu Fastruk Fe FPOS FWPA HVP IRR K Lidar N NCFFI NIR NPV OBC P R&D SWOT Zn Australian Forest Operations Research Alliance Australian Logging Productivity and Cost Assessment Boron Blue gum productivity optimization system Carbon Balance Cooperative Research Centre Commonwealth Scientific & Industrial Research Organization Copper Fast Truck Iron Forest productivity optimization system Forest and Wood Products Australia Hancock Victorian Plantations Internal Rate of Return Potassium Light Detection and Ranging Nitrogen National Centre for Future Forest Industries Near Infra Red Net Present Value On Board Computer Phosphorus Research and Development Strengths, weaknesses, opportunities and threats Zinc

24 15. REFERENCES Culvenor, D., Jupp, D.L.B., Lovell, J. and Newnham, G Evaluation and validation of canopy laser radar systems for native and plantation forest inventory summary report. FWPRDC Project No. PN Farrell, R., Innes, T.C. and Harwood, C.E Sorting Eucalypt nitens plantation logs using acoustic wave velocity. Australian Forestry 75; Ghaffariyan, M.R. and Wiedemann, J Harvesting lowproductivity 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 Comparison of Terrestrial and Airborne LiDAR in Describing Stand Structure of a Thinned Lodgepole Pine Forest. Journal of Forestry 110: (8). Knott, J and Turner, J, Fertilizer usage in Forestry Commission of N.S.W. exotic conifer plantations Technical Paper - Forestry Commission of NSW. No. 51, 98 pp. Sims, N., Hopmans, P., Elms, S. and McGuire, D Mapping foliar nutrition in Pinus radiata from hyperspectral satellite image data. FWPA Project Number PNC Stone, C., Turner, R., Kathuria, A., Carney, C., Worsley, P., Penman, T., Hui-Quan Bi, Fox, J. and Watt, D Adoption of new airborne technologies for improving efficiencies and accuracy of estimating standing volume and yield modelling in Pinus radiata plantations. FWPA Project Number PNC 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 Evaluation of the Hitman PH330 Acoustic Assessment System for Harvesters. CRC for Forestry, Bulletin 25. 4pp.