TIMBER PRICES are performing well, which is good news for those who have forestry investments – it has also opened up a market for farmers to cash in on timber assets, particularly old shelterbelts.

Back in the 1970s there were less restrictions and more grants to encourage tree planting, and swathes of new woodland appeared, with shelterbelts introduced on many farms.

Commercially, these smaller areas of woodland, often found on hilly farms and planted to protect stock and crops from the prevailing winds, have long had issues with size and access – lower prices for timber ten years ago meant that they had little or no value for harvesting. But trees planted in 1970s are now a mature 50 years old, and in today’s market are a crop worth cashing in.

Timber prices have risen for a number of reasons. The weaker pound against the Euro makes imports more expensive and there is a general increase in UK consumption. Sawmill volumes were up last year by 6%, equivalent to 6.5million tonnes, and wood chip for domestic and commercial heating is an ever-growing market.

Historically, low timber prices meant ‘waste’ wood like chip and brash were left to decay because the cost of extraction exceeded their value, but modern biomass boilers have changed all that, and what used to be waste wood now sets baseline timber prices.

“An acre of forgotten land is now a growing asset and we’re managing the harvesting process for several farmers who want advice on their best options,” reported Davidson and Robertson forestry manager Iain Kyle.

He stressed, however, that a licence is needed to fell trees, and there is an expectation that replanting will follow.

"Permission from Forestry Commission Scotland is normally needed to fell growing trees and is usually given with a felling licence or approval under a Dedication Scheme," said Mr Kyle. "It is important that the licence has been issued before any felling is carried out.

“We make recommendations on what should be felled and replanted, apply for felling licences (we estimate six to eight weeks for these to come through), and work on tenders to achieve the best rate. Where possible, we look for tenders for a single price across the board.

“Harvesting shelterbelts is now attractive but not without issues, all of which are evaluated ahead of the tender process," said Mr Kyle.

"Conifers make up 74% of our trees and produce softwood for construction timber, paper and other wood products, as well as fuelling biomass plants. Around half the planting in Scotland is Sitka Spruce followed by Scots Pine. These are typical species planted for shelterbelts.

"Depending on the timber type, land owners can achieve £50/tonne+ for quality Sitka Spruce sold as a standing sale from a good sized plot with good access. Sitka is the dominant tree and yields the highest price in the market. Scots Pine attracts lower prices, with Larch offering good value in the fencing market. Good quality will yield a good price. On many farms, the Larch is of poor quality and only of chip value, but still profitable for reasons already mentioned."

As an example, he cited a mixed beef and sheep farm in East Lothian that planted woodland in the 1970s which recently completed sales of hardwood and softwood timber from 10.68 hectares of land, harvesting over 4260 tonnes and achieving sales in excess of £148,000.

The farm had woodland on the side of a river bank and three shelter belt pockets. The timber was a mix of softwood and field margins of predominantly Beech and Sycamore. Like many shelterbelt sites, it had issues, most of which related to access, but a good price for the timber was achieved.

But Mr Kyle stressed that shelterbelt owners should 'beware false hope from free assessments'.

“Most farmers know little about the felling licence process or how to go about marketing timber, instead they focus on what they do well. We’ve heard of the timber buyer turning up at the gate and talking farmers into selling their best timber for as little as possible, often offering a few fencing posts back in return.

“One client had a block of woodland that had been unmanaged for years. From a grant funded source he was given free information and recommendations for felling that we felt were inadequate. Whilst we recommended a different plan, the felling licence was already in place and time was critical.

"We managed the process but anticipated problems after thinning. As we had suspected, the age and form of the remaining trees resulted in significant wind damage. Despite this we managed to achieve a good price for the quality of the timber. Result: 1244.79 tonnes yielded over £38,000 from 4.15 hectares."

Mr Kyle lauded the recent Forestry Grant Scheme in Scotland for helping boost planting and woodland creation. Forestry investment is now a consistent performer for rural estates, and is something clients with reducing returns on upland farms are considering.

“Whilst not all agricultural land is suitable or economic to plant, farmers and landowners should look at opportunities both in terms of earning capacity and long term asset value. You can improve capital value of less productive land by introducing woodland. Land that can be classed as ‘middle-hill’, can achieve values over and above agricultural value when selling for forestry purposes.”