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Austria

€95 / sm³

Article by Gerd Ebner, translated by Susanne Höfler | 25.09.2019 - 16:31

How much longer will losses be put up with?

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Felix Montecuccoli, Präsident Land&ForstBetriebe © Land&Forst Betriebe Österreich/APA-Fotoservice/Rossboth

It is unlikely that this exceptional situation will change in the upcoming years. "How much longer will forest owners be willing to keep posting losses?" Montecuccoli poses the central question (see calculation).

He identifies indications: "Last year, capacities for logistics were scarce and the market for used forestry machinery was sold out. This year, both factors have relaxed. My conclusion is that many forest owners have already thrown in the towel and stopped processing damaged wood."

Montecuccoli shows understanding for this strategy. "Processing everything quickly causes losses and plenty of stress. If you don't do anything, at least the only thing you lose is the wood. Here, an administrative fine of €1000 that is hardly ever enforced is up against a loss of about €5/sm³ per 1000 sm³."

Blood, sweat and tears – and money

In these times, forest owners not only have to invest a lot of blood, sweat and tears to keep going, but also money. Montecuccoli calls them "genetic forest owners", counting himself among them; what he means by this is the ambition to leave your grandchildren a forest with high grade wood and timber, as well. Just like generations before did.

The forest is not dying, it is changing. What is dying, however, is forest economy as forests are becoming unprofitable.

Felix Montecuccoli

There will be those that don't do anything anymore, and those that invest in forest conversions. For this kind of forest enthusiasm, however, you need a certain level of liquidity.

Felix Montecuccoli

More and more is left in the forest

Since many, but by no means all forest owners think similarly, "more and more is left standing and less roundwood is on offer."

Montecuccoli is convinced that society needs to realize how important the forest is for solving future problems. "CO2 storage, forest functions, bioeconomy, ...". Therefore, he also considers forest preservation a task of the state. The Lower Austrian forest owner in any case expects state support. "Especially for small-scale forest owners, this is crucial. For them, a larger beetle-infestation eradicates half their assets. If another one follows, everything might be destroyed within two to three years. Then there will be no yield over the period of four decades, but damaged wood harvesting, reforestation and 40 years of second growth fostering must be paid for."

In the main damage areas, there are forest owners that hardly have any healthy trees left on areas the size of private hunting grounds (at least 115 hectares). "These are the ones that have lost the forest for at least one generation", Montecuccoli outlines the drastic extent of this situation. He sees two possibilities: "Leave everything to nature, or actively cultivate forests." The former inevitably leads to even higher hoofed game damages due to grazing possibilities. Furthermore, random wood species would emerge. The latter, as mentioned before, does not come for free.

Minimum threshold for raw materials value

"The roundwood price must at least match the level of the value of the raw material and not undercut it by half as it does now," is another one of Montecuccoli's demands. According to him, this threshold is €95/sm³ for green wood. This was the minimum price level before the bark-beetle disaster. "By November at the latest, this limit must be reached," he sets a time limit. "What also speaks for this demand is the fact that the roundwood price will be split. The quality of imported damaged wood is clearly deteriorating. A humid fall will do the rest. Green wood will therefore be in high demand."

Future will be decided now

"The industry must look ahead. If we do not reach a level that is sufficient for forest owners, sawyers won't have any spruce left to cut in the future. Then, forests will be filled with hazel, elder bushes and hornbeam. If wood is worth less than production costs, no one will produce anymore."

What's more: The longer it takes to make a decision, the higher costs for measures of population conversions become.

Even though the current price level in Central Europe is similar, general conditions are quite different. In Germany, Montecuccoli elaborates, the better bioenergy regulations make things easier. In Poland and Slovakia, investing state property is dominating. Czech Republic is facing the most challenging situation where "private owners - no matter their size - are running out of money."

EU as coordinator

Since the bark beetle rarely respects national borders Montecuccoli calls on the EU to get more involved. "Just like with the EU strategy for forest fire fighting where different states help each other, we need similar measures for the bark beetle," he explicates his wish. "It is a fact that Czech Republic has different ways of working than we do. In that case, neighboring countries are suffering." Currently, large-scale privately owned forests are tweaking the system wherever they can. "Restorations are postponed, as are staff replacements. Silvicultural measures that are actually much needed either remain undone completely or are postponed."

Montecuccoli, however, deems large-scale tweaking necessary: "Strengthening bioeconomy, increasing energy efficiency, Nawaros instead of petrochemistry, adapting lifestyles... all of these aspects speak in favor of wood: as construction material, basic material, and eventually fuel."

Research initiative needed

Another need of the hour is a research initiative that "goes far beyond spruce genetics". Furthermore, Montecuccoli advocates "continued active forest economy": The mood at the Austrofoma in Forchenstein that is about to start soon will be a good indicator in this respect.