Record log and beef prices have pushed total exports to a record $6 billion in the year to June.
Beef exports reached a new high of $411 million in June 2021, while log and wood exports also reached a new high of $561 million in June 2021. Photographer: 123RF
This represents a 17 percent, or $871 million, increase over the previous year.
According to new Stats NZ data, beef exports increased $31 million to a new high of $411 million in June 2021, up from $411 million in June 2020.
This increase was driven by volume, with volumes increasing by 8.5 percent. The previous high for beef export values was in March 2020 ($405 million).
Exports of logs and wood increased by $105 million, or 23 percent, from June 2020 to $561 million in June 2021.
Alasdair Allen, Stats NZ’s international trade manager, stated that the average value of untreated log exports has steadily increased from a low in July 2020 to $199 per cu/m in June 2021.
According to Phil Taylor, president of the Forest Owners Association, demand is strong not only domestically but also internationally, with increased orders from China.
“Supply is significantly constrained and so as a result we’ve seen very strong pricing over the last nine months.
“Post Covid the supply chain has been significantly disrupted so that’s created not only delays but obviously very significant costs.”
Taylor said large fires in the Pacific Northwest and down the West Coast of the United States and in Chile had affected stocks, as well as the spruce disease affecting forests in Europe.
“New Zealand has always been a very good and effective supply chain, so given the global constraints China is looking at New Zealand. So, with the strong demand it creates a classic supply and demand imbalance pushing up the prices.”
Growing demand in the domestic market was keeping forest owners and mills busy, he said.
“We’re seeing a huge demand from our domestic processors and our preference is to supply them first with our high quality logs.”
Earlier this year there were reports of a massive timber shortage in the building sector, but Taylor said there was plenty of stock.
“There’s a lot of misinformation in that space. Forty percent of our 35 million cu/m goes into the domestic market.”
But the increased prices and higher export volumes were not necessarily bringing in better returns for some forest owners.
“At a time when we’ve seen very high log prices, unfortunately, we’ve also seen very high freight prices … while we’re still having strong, strong prices, and it’s a good time for us because of the high freight rates, that’s taking some of the margins away,” Taylor said.