Land capability and suitability for forestry on private land
Victoria has a substantial area potentially available for private forestry. Cleared farmland with rainfall of at least 600mm per year and irrigated land is generally acceptable. See Victoria's Mean Annual Rainfall map on the Victorian Resources Online (VRO) site.
6.2 million hectares of such land is available in Victoria. However, there are many other factors including a region's climate, soil type and topography along with its location, current land uses, property sizes and land values that influence the suitability of land for private forestry development. Victorian Private Forestry Opportunities is a map located on the VRO site, created by combining rainfall, geology and landform data, which describes plantation potential where the biological growth requirements of a particular species (or set of species) are satisfied.
See the Private Forestry pages on Victorian Resources Online, which presents additional information and maps outlining characteristics that affect the potential suitability of land for private forestry, at both the statewide level and at regional levels.
The areas in Victoria, having the greatest potential for commercial private forestry development are Far South West Victoria around Hamilton and Portland, Southern Victoria around Geelong, Gippsland and some areas in North East Victoria. Each of these has ready access to markets, have reasonable infrastructure and have favourable soil and climatic conditions that allow production of commercial species.
Drier areas in the north west of the state may be suitable for tree species adapted to low rainfall and grown on longer rotations. Due to the relative isolation of such areas from markets, producers may have to use intensive management techniques, carry out some initial processing (on-farm milling, drying, etc.) and form marketing cooperatives.
Trees planted for environmental benefits can also be managed for timber, providing sound management and harvesting techniques are employed.
The availability of land for tree growing enterprises depends on whether the returns are competitive with the existing agricultural land uses. Trees however, can often be successfully integrated into less productive areas of farms.
Land prices in potential tree growing areas vary widely from $1,500 per hectare to $8,000 per hectare. Tree growth rates will generally be better in the higher value rural land, however, with appropriate choice of silvicultural regime, site and management, commercial trees can be competitive on both low and high priced land.
Annual leasing rates for land are often around 5% of its capital value, ie. $75 to $400 per ha. The opportunity for landholders to lease land to plantation companies is anticipated to increase in the future.
Supply & Demand
Projected world deficits in both wood fibre and timber extend well past 2020. In addition to the current world shortage, Australia's inability to meet local demand has meant a trade deficit of almost $2 billion per year in recent years, due to imports of overseas wood chips and sawn timber. This increasing demand can be partially attributed to:
- decreasing supply from native forests
- increasing demand for paper products, and
- increased consumer interest in sawn timber
Victoria currently produces approximately 0.2% of world demand, and with our close proximity to the rapidly expanding Asian market place and wealth of cleared agricultural land, Victoria has a unique opportunity to exploit this huge demand for pulp and sawn timber.
This gap between world (and domestic) supply and demand presents opportunities for landholders to diversify their land use, and for investors to diversify their portfolios. Private Forestry - Investing in Victoria outlines the investment opportunities for private forestry in Victoria.
Note: The Victorian Government is introducing the Climate Change Act 2010. Consequently Forest Property Rights and Carbon Rights references have been removed while new information is being prepared.
The publication 'Producing Timber from Farms- A practical guide to farm forestry' outlines future markets, species and end product selection, species requirements, site selection and tree establishment, stand management, harvesting and projected costs and returns of private forestry.