100 acres thinking of forestry

Mountain123

Hi I have 100 acres of bogland in burren . What are the best options? Leasing, forestry etc? Thanks

case885

forestry i guess if it is very wet but if there is a good part that could take cattle try renting it theres plenty farmers looking for land

Jack180570

Mountain123 wrote: »

Hi I have 100 acres of bogland in burren . What are the best options? Leasing, forestry etc? Thanks

If it's bogland, heather mountain grass etc then you will not be allowed plant it by the Dept. Also you may be in a designated area which would have the same result. Contact one of the forestry companies or a consuktant and they will be able to help you.
If can't be planted then either farm it or lease it! ?

Good loser

What's the current per acre value of the land?

ITFarmer

Forestry: initially the grants and premiums are ok...I am assuming the premiums are stagnate (they don't track inflation), so in X years your premium will probably not look half as good as it did in the first few years. But you do have the sale of the wood (looong time).

It would be interesting to see how any other options compare such as leasing or farming the land.

"What's the current per acre value of the land?"... 5000 Euro per acre??!!!

Grecco

ITFarmer wrote: »

"What's the current per acre value of the land?"... 5000 Euro per acre??!!!

For forestry land? not a chance Coillte arent payiny no more than 2200
Celtic tiger alive and well around you so

Jack180570

ITFarmer wrote: »

Forestry: initially the grants and premiums are ok...I am assuming the premiums are stagnate (they don't track inflation), so in X years your premium will probably not look half as good as it did in the first few years. But you do have the sale of the wood (looong time).

It would be interesting to see how any other options compare such as leasing or farming the land.

"What's the current per acre value of the land?"... 5000 Euro per acre??!!!

The initial premium is currently €173 per acre for spruce on grass/rush land, plus single farm payment subject to certain conditions.
They don't track inflation. They have mostly increased over time.
The premium for spruce I planted in 1995 was £63, today it's over twice that much. This year it will receive it's second thinning, I expect it will be worth around €200 ac sold standing.
I have no doubt that I am making more money out of the land as forestry than any other farm enterprise.

Effects

Does forestry entitle you to single farm payment? I'm currently thinking about planting and trying to weigh it all up. Difficulties arising as it's jointly owned between three siblings. Two want to plant trees and the third thinks she's going to become a full time farmer in 5 years and make a fortune out of 30 acres.

Good loser

If it's dry, reasonably level, land I wouldn't plant. Especially if it can grow crops.

After 17 years I got €170 per acre for spruce first thinnings. And there were costs and hassles involved.

Jack180570

Effects wrote: »

Does forestry entitle you to single farm payment? I'm currently thinking about planting and trying to weigh it all up. Difficulties arising as it's jointly owned between three siblings. Two want to plant trees and the third thinks she's going to become a full time farmer in 5 years and make a fortune out of 30 acres.

Single farm payment can be drawn on land that will be planted now so long as the land was submitted for SFP in 2008 and the farmer who applied for it in 2008 got paid a SFP for 2008. Even if in the meantime the SFP has been sold, the current owner/applicant for forestry can buy SFP and then draw both Forestry Premiums and SFP on the land.

Land that is jointly owned carries the obvious difficulties of joint ownership. The income from planting is genuinely good, forestry premiums, SFP and all the timber revenues from the thinnings and clearfell of the forest. Under the scheme you still own the land and the trees, all the time. The income from forestry is exempt from income tax but it is liable to PRSI and USC. The other 'disadvantage' if one wants to call it that is that it is permanently in forestry once its planted.

With a good site planted with mostly conifers and with an applicant who qualifies as a farmer with the average SFP of €272 per ha, the average earning from forestry is around €480 per acre per year. This is made up of €173ac forestry premium + €110ac SFP + €200ac value of timber growth.

It is a long term decision and warrants due thought. If the land is very good quality land then it possibly is not the best use for it as if this is the case you may have the option of selling it and if you still did want to go for forestry you could possibly buy twice as many acres of forestry type ground and double your return. Word of caution here - it sounds like the land is an inheritance and if you got agricultural relief when inheriting it, if you sell it within a certain period of time of inheriting it you may have to pay additional taxes (5 or 7 years from recollection).

Jack180570

Good loser wrote: »

If it's dry, reasonably level, land I wouldn't plant. Especially if it can grow crops.

After 17 years I got €170 per acre for spruce first thinnings. And there were costs and hassles involved.

I agree with you comment regarding the good land aspect.

I am curious regarding your comment re the costs and hassles of the thinning and would love to ask a few questions if I may..
How big was your forest that was thinned
Did you sell the thinning standing or did you do the thinning yourself and sell the logs.
How much a tonne would you say that you had as a profit, net of costs.
What is the best for a forest owner to get a thinning done.

Good loser

Jack180570 wrote: »

I agree with you comment regarding the good land aspect.

I am curious regarding your comment re the costs and hassles of the thinning and would love to ask a few questions if I may..
How big was your forest that was thinned
Did you sell the thinning standing or did you do the thinning yourself and sell the logs.
How much a tonne would you say that you had as a profit, net of costs.
What is the best for a forest owner to get a thinning done.

Acerage 80.

Sold standing. Got around €11 per tonne.

Hassle was it took 14 months to harvest -way too long. Then wasn't getting paid. Numerous phone calls and broken promises. At the end had to impound 10 loads of timber and dispose of it myself.

Best system: get someone with a good reputation for care, speed and reliability. They all seem to prefer to sell standing. Pallet wood has/had the highedt value, then stakes then woodchip.

Jack180570

Good loser wrote: »

Acerage 80.

Sold standing. Got around €11 per tonne.

Hassle was it took 14 months to harvest -way too long. Then wasn't getting paid. Numerous phone calls and broken promises. At the end had to impound 10 loads of timber and dispose of it myself.

Best system: get someone with a good reputation for care, speed and reliability. They all seem to prefer to sell standing. Pallet wood has/had the highedt value, then stakes then woodchip.

Thanks for sharing.
11 sounds like a good price, what was pallet making per ton when you sold it?
Was it first thinning?
Do you know what the breakdown of the assortment was between pallet/stake/pulp?

Last thinning I did was on a 20 ac stable site, paid 8e ton standing, I had 1.30 ton out of that and farmer got just under 200e ac out of thinning.

Personally I think there is an awful lot of dishonesty in this part of the forestry business and a lot of farmers are led by the price per ton way too much. In some cases the price offered and 'paid' was so off the wall (16-17e/ton) than it was simply not possible.

The overpricing is then made up for by;
Not accounting for all the loads.
False weights for the loads
Incorrect thinning where the more valuable pallet wood is removed instead of the pulp.
I have seen it all and forest owners would do well to familiarise themselves with the prices of the products and the costs of thinning. Also the conversion between tons and m3 as the former is the unit of sale of the product whereas the latter is the unit used for harvesting, and they are NOT the same.

Totally agree with your last point, do business with someone who is honest open and transparent, familiarise yourself with the pricing model. And like letting land, the highest price is unlikely to be the best option/value for you.