FM Group Newsletter
Autumn 2025
Introduction
FROM THE DIRECTORS
Welcome to the Autumn edition of our newsletter.
On the back of global events, it would be easy to become depressed about the state of our industry. Export log prices are down, and NZ construction has waned, leading to lower demand from our domestic processing sector.
Our social licence has taken a hiding with a vocal minority trying to erode the forestry sector at every opportunity. There is also continued tinkering from the Government with the ETS leading to possible restrictions on land use conversion to forestry.
However, there are some massive benefits of exotic forests in New Zealand. They cover only 6% of New Zealand's land area and create an industry that is our fourth largest export earner, it creates over 42,000 jobs and improves soil, water and air quality.
Global demand for timber products is increasing, and the returns from well-managed forests make investors take notice.
Forest Management Group is preparing for another bumper planting season with over 6000ha of land being planted, or replanted after harvest.
Glenn Moir
Director
Log Market Update
It was looking optimistic up until the first week of March. With Chinese New Year we have seen a reasonable order of volume for March deliveries, but the net effect of USA tariffs imposed on tariffs from China to US has, like most things dimmed the confidence of trade and price for logs into China and Korea.
China sales prices have dropped around $8 USD and settling around the $112 USD CFR, perhaps lower for May. It appears that inventory is under control, but confidence is down compared to summer projections. The Korea market which is now only 1.5 - 2 million m3, is set at higher prices but is set to follow China market as normal.
India is also struggling with an oversupply of volume into Kandla, but some companies have had the confidence to fix longer term prices and hopefully ride out the dips, we will see if that theory works in time. It does appear there is new enthusiasm for this market with some pundits predicting it could take up to 4,000,000 jas from New Zealand in the near future. Also, if the Free Trade Agreement between the two countries is confirmed this will add $7.00/jas to the value of our logs. The major plus of this market is the population size and the fact that all logs are consumed internally rather than being exported as products into the international market.
Ocean freight appears to have dropped for the South Island with a difference of $3-4 USD down from January this year. But this has been offset by a sharp rise in our foreign exchange to $0.60 to offset any gains here.
Our domestic markets are slowing for the winter, which is predictable for this time of year. Investors had started entering the build market but sentiment is down again after the US market has thrown a spanner in international markets. This has seen a rocky ride in the stock and bond markets and more importantly a dip in confidence.
New home buyers have had a dip in their available funds for purchasing new houses with big drops in their KiwiSaver's, but it appears that there is still new houses being consented for the upcoming summer programme.
On the positive side we are seeing use of mass timber construction in some commercial builds. If this is able to be manufactured more economically we could see a drop in the use of concrete and steel in these projects.
While the markets are looking depressed, we are hopeful that spring will see an resurgence in demand in export and local markets. This is hard to tell but the swings in the markets are more frequent with the uncertainty, normally spring to NZ summer provides much better timing due to the seasonal demands of wood and better options on freight in Asia.
We live in hope as usual!
ETS - Carbon Price Update
The Emissions Trading Scheme (ETS) is a market-based policy tool designed to reduce greenhouse gas emissions by putting a price on pollution. Participants are required to buy carbon credits (NZUs) to offset their emissions. Each NZU equates to 1 tonne of carbon dioxide.
At present, NZU prices are trading in the range of $48 - $50 per NZU. This has traded downwards since our last newsletter with increased selling pressure observed in the market. Most of this appears to have been from forestry participants receiving their Provisional Emission Return (PER) allocations and choosing to sell. In addition, Jarden reported that ongoing uncertainty stemming from the US/China tariff standoff flowed through to the NZU market, as concerns grow over the potential impact on China as a key trading partner for New Zealand.
At $50/NZU carbon price is currently significantly lower than the government ETS auction floor price for 2025.
For 2025 the ETS auctions have only 6 million NZUs available, priced at a minimum of $68. The first ETS auction for 2025 was in March and there were no bids placed by buyers. This volume has rolled over to the next auction in June (18/06/2025).
EPA NZU Stockpile Update
The EPA recently released updated figures on the number of NZUs held privately in the NZ Emissions Trading Register. Total emissions units held across private accounts in the NZ ETR registry increased across the quarter by 6.7 million tonnes, taking the total “stockpile” to 157 million tonnes as of 31 March 2025. Most of the increase relates to NZUs being issued to forestry participants undertaking a Provisional Emission Return (PER). In 2024, emitters surrendered 48.4 million units to the Government for their ETS liabilities. Based on this we would expect to see the stockpile reduce significantly come the end of June once the emitters’ surrenders have been completed.
CCC annual advice for 2025, for the unit limits and price control settings for 2026-2030
The Climate Change Commission (CCC) recently updated their advice on the unit limits and price control settings for 2026- 2030.
They recommended that there be no change to the 2026 and 2027 auction volumes. In our assessment, changes to the 2026 and 2027 settings are not justified.
Additional volumes could be offered in the years 2028-2030, subject to adequate price guardrails. Deferring the additional volumes until then would provide flexibility to adjust to any future changes in the forecast surplus or emissions. They recommended that the auction reserve price (ARP) and the cost containment reserve (CCR) price triggers remain at current levels, adjusted only for inflation.
The current settings are consistent with the Government’s emissions reduction targets, based on the evidence available now.
2026 Planting Season Orders Are Open
We are currently taking orders for our 2026 planting season.
Our Services:
Pre-planting assessment
Planting forest areas is often a key part of sustainable land management on farms and rural properties. These areas of forest can deliver multiple benefits to the landowners.
Contact our experts who will develop a plan tailored to your unique block of land, outlining the preferred species choice and mixes to ensure you are planting the right tree in the right place. Through careful planning, we can also ensure you focus these planted areas to maximise their potential eligibility for carbon credits through the Emissions Trading Scheme.
Planting
Forest Management has a large portfolio of clients who rely on our team of experts to deliver the maximum value from their forest establishment.
New planting and restocking
We engage professional planting contractors to ensure optimal seedling survival for both new land and cutover planting.
Species choices
We ensure the choice of tree species is suited to the site and the seedlings are high-quality stock sourced from local nurseries.
Survival counting
We undertake survival assessments on all planting operations to ensure establishment success.
Release spraying
We ensure the correct use, and application of chemicals to control weeds and grasses. We undertake both aerial and manual release spraying depending on your site’s environmental requirements.
Please contact your local manager to confirm your tree stock orders.
Adding Value to Your Forest through Pruning
Pruning your radiata forest not only adds value but also diversifies your harvesting options by reducing susceptibility to market fluctuations. Pruned logs from NZ forests yield high-quality value-added clear wood with an attractive appearance for both the domestic and export markets.
Trends show pruned logs continuing to attract a higher price premium compared to structural logs destined for the construction markets, both in NZ and internationally.
A recent harvest operation in Kaikōura (South Island) highlighted the differences between pruned versus non-pruned regimes. Both stands of trees were present in the same geographic location and subject to similar soil types, terrain and annual rainfall. Distance to markets (domestic mills and ports) was approx. 200km, both stands were harvested under similar market price conditions.
Comparative Data
| Pruned Regime | Unpruned Regime | |
|---|---|---|
| Pruned Sawlog | 17% | 0 |
| Domestic Sawlog (Small Branched) | 40% | 52% |
| A - Large Export Log | 21% | 18% |
| K - Small Export Log | 8% | 6% |
| KI - Rough Export Log | 6% | 6% |
| Domestic & Export Chip Log | 8% | 18% |
| Pruned Regime | Un-Pruned Regime | Timber Value Range | |
|---|---|---|---|
| Prunes Sawlog | 42% | - | Premium Range |
| Domestic Sawlog (Small Branched) | 38% | 66% | High Range |
| A - Large Export Log | 15% | 24% | Mid Range |
| K - Small Export Log | 2% | 4% | Mid Range |
| KI - Rough Export Log | 1% | 2% | Low Range |
| Domestic & Export Chip Log | 2% | 3% | Low Range |
Analysis
Pruned and domestic sawlogs from the pruned regime produced 80% of the forest owner earnings in the premium to high-range value sawlogs. There was also market resilience for the forest owner as these grades were sold into stable domestic NZ markets, avoiding export fluctuations.
The unpruned regime earned 66% of its log income from domestic sawlogs, the total percentage of export logs that earnt income was 30% putting a reliance on a stable export market at time of harvest.
A final note on log grade percentages, unpruned regimes will produce a higher percentage of chip (low value timber). When there is a long lead to markets i.e. >200km, it can be difficult to make a positive return for forest owners. In certain cases, this can be left on site causing environmental issues through mobilising and entering waterways, therefore, reducing the volume of chip in pruned regimes aids in mitigating this risk.
Talk to your local Forest Management Group Forest Manager about adding value to your forest and whether pruning is right for your site. Getting the right advice will ensure that your tending costs are well managed, adding value for the future.
From the Backpage
Goodbye Rose!
It's hard to imagine Forest Management without Rose, but after over 30 incredible years, she's decided it's time to hang up her keyboard and embark on a well-deserved retirement!
Rose joined us way back in 1994, initially in a "part-time" role. From the very beginning, her exceptional accuracy and keen eye for detail stood out – qualities that, shall we say, complemented the founders' skills perfectly! She quickly became an invaluable part of the team and has made a major contribution to FM Group's success over the decades.
She's been with us through thick and thin, watching the company grow from just the two original founders to our current team of 38. In many ways, Rose has been the heart of our company culture. She was our beloved "Camp Mother," brilliantly organising countless conferences, memorable Christmas parties (including assisting Bad Santa!), and numerous social events that brought us all together.
For over 30 years, Rose has been the calm, welcoming face of FM Group. Her cool, collected approach has been a source of stability during challenging times and a helping hand during celebrations. More than that, she's been a listening ear, a source of wise counsel, and someone who truly appreciated (and added to!) the unique humour and spirit of FM Group.
We've also been fortunate to share in her life beyond the office, celebrating her marriage to the love of her life, Pete, and watching them enjoy their wonderful family, with kids and grandkids.
Rose, how you managed to put up with our collective madness for so long is truly amazing! We will miss your presence, your wisdom, and your laughter immensely.
We wish you absolutely all the best for a retirement filled with joy, relaxation, and quality time with Pete and your family. Please know that the door is always open for visits – whether for coffee, a good chat, some much-needed advice, or just to share a laugh.
With deepest gratitude and warmest wishes, goodbye from all your friends and colleagues!
Previous issues
Winter 2024 Newsletter
In this issue: Carbon Price Update, Log Market Update, Stand Record System, 2025 Planting Season Orders Are Open, FM Group Rides For A Good Cause.
Autumn 2024 Newsletter
In this issue: Carbon Price Update, Forest Management Group Amalgamation, Log Market Update, FM Group’s Coast to Coast Challenge, FM Group Scoots for a Cause and Team Welcomes & Goodbyes.