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Timber Production, Prices and End-use in a Forest Business in Central Hokkaido, Japan
Toshiaki OWARI and Koji OKAMURAThe University of Tokyo, Japan
Background
Sustainable forest management refers to “stewardship in a way thatmaintains biodiversity, productivity, regeneration capacity, vitality,etc. to fulfill relevant ecological, economic and social functions”
A firm economic basis is necessary for the implementation ofsustainable forest management
A landowner can improve its economy by … … reducing production/management cost (cost less) … increasing timber production (produce more) … marketing products at a higher price (add value)
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Purpose
It is important for landowners to create and implement valueaddition strategies
While wood is often regarded as “commodity” attributed with a lowprice, some tree species and assortments are extremely valuable inthe specific markets
To explore value addition possibilities in the marketplace, this paperexamined 1) timber production, 2) timber sales & prices, and 3) theend-use in a forest business in Hokkaido, Japan
A case analysis was conducted at the University of Tokyo HokkaidoForest
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The Univ. of Tokyo Hokkaido Forest
Located in Furano city, Hokkaido 43°10´- 20´ N, 142°20´- 40´ E
22,733 ha of forestland
Established in 1899
Natural mixed forest with coniferous and broad-leaved species Conifer: fir, spruce Broad-leaved: linden, maple, birch, oak, etc.
The mean growing stock is 210 m3/ha
4
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Timber Production
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Tree Cutting 2007 - 2009
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15,411
9,52312,709
4,129
5,909
7,070
7,377
5,495
1,641
0
5,000
10,000
15,000
20,000
25,000
30,000
2007 2008 2009
Cutt
ing
volu
me
(m3 )
Plantation forest (conifer)
Natural forest (broad-leaved)
Natural forest (conifer)
Cutting volume 21,000 – 27,000 m3/year
% by forest type Natural forest: 73 - 92% Planted forest: 8 - 27%
% by tree species Conifer: 67 - 85% Broad-leaved: 15 - 33%
% by sales Stumpage: 78 - 86% Log: 12 - 22%
23,226
16,24617,828
3,305
4,6813,592
0
5,000
10,000
15,000
20,000
25,000
30,000
2007 2008 2009
Cutt
ing
volu
me
(m3 )
Others
Log sales
Stumpage sales
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Log Production 2007-2009 Production volume
2,500 - 3,500 m3
Yield rate (Tree > Log) 74 - 77%
% by species Softwood: 52 - 62% Hardwood: 38 - 48%
% by sales Landing: 96 - 99% Auction: 1 - 4%
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1,5321,841
1,479
885
1,663
1,197
39
41
104
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2007 2008 2009
Log
prod
ucti
on (m
3 )
Hardwood (auction)Hardwood (landing)Softwood (landing)
Timber Sales & Prices
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Timber Sales 2007 - 2009
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Sales value (tax excl.) 110 - 123 mil. JPY 1.3 – 1.4 mil. USD
(1 USD = 85.4 JPY)
% by tree species Conifer: 38 - 58% Broad-leaved: 42 - 62%
% by sales Stumpage: 46 - 52% Log (landing): 29 - 46% Log (auction): 8 - 22%
6455
47
46 65 76
0
20
40
60
80
100
120
140
2007 2008 2009
Sale
s (m
il. JP
Y)
Broad-leaved
Conifer
57 55 60
4156
36
12
1027
0
20
40
60
80
100
120
140
2007 2008 2009
Sale
s (m
il. JP
Y)
Others
Log (auction)
Log (landing)
Stumpage
High-value Timber Production
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Production & Sales 2009
Product Volume* (m3)(%)
Sales (JPY)(%)
JPY/m3
USD/m3Odds ratio
(stumpage=1)
Stumpage 17,828(86.5)
59,992,812(48.9)
3,36539 1
Pulpwood(softwood)
646(3.1)
2,749,049(2.2)
4,25550 1.3
Pulpwood(hardwood)
541(2.6)
3,691,848(3.0)
6,82480 2
Sawlog(softwood)
833(4.0)
12,493,334(10.2)
14,998176 4
Sawlog(hardwood)
656(3.2)
17,201,477(14.0)
26,222307 8
Log (auction) 104(0.5)
26,656,738(21.7)
257,1133,011 76
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* Stumpage: volume of standing trees; log: volume of logs
Sales by Auction 2009
Tree species Volume (m3)
Average price(JPY/ m3)(USD/m3)
Highest price(JPY/ m3)(USD/m3)
Total sales (JPY)(USD)
Monarch birch 43.943 402,3284,711
1,490,00017,400
17,679,485207,020
Castor aralia 28.971 233,6582,736
520,1006,100
6,769,29379,266
Mountain birch 15.880 73,351859
190,0002,200
1,164,81713,640
Japanese oak 14.883 70,090821
138,9001,600
1,043,14312,214
Total 103.677 (257,113)(3,011)
26,656,738312,140
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End-use
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Summary 2009
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Product Production(% m3)
Price(USD/m3)
Sales(% JPY) End-use Unit of end-
product
Stumpage 86 30-40 49 (mixed)
Pulpwood 6 50-80 5 PaperBiomass Fiber (ton)
Sawlog 7 180-300 24 ConstructionFurniture Solid (m3)
Fancy log 1 1,600-17,400 22 Decoration Veneer (m2)
Discussion Why can log buyers afford to pay a very high price?
High product yield (fancy veneer) Manufacturing innovation (0.4 - 0.6 mm > 0.1 - 0.2 mm thick)
Why are end-users willing to buy/use fancy veneer? Aesthetics, scarcity, and low unit cost
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1 m31 m2
0.2 mm x 5,000 sheets
1 m3 x 0.3 (yield rate) x 5,000 m2/m3 x 7 USD/m2 = 10,500 USD
1 m3 x 0.3 (yield rate) x 5,000 m2/m3 x 21 USD/m2 = 31,500 USD
(0.5 mm x 2,000 sheets)
Conclusions
A very high log price can be realized in the markets where end-products are traded in units of “m2”
To explore value-addition opportunities, landowners shouldcollaborate with wood product industries … … to build and manage the brand equity … to develop new products using other tree species … to expand the markets to other countries
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Thank you!
We wish to thank current and former staffs at the University of Tokyo Hokkaido
Forest for their continuous and great efforts in forest management
(Corresponding address: owari@uf.a.u-tokyo.ac.jp)
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