Figure 1: Australian Plantation Area
The above chart showing Australia’s plantation area since 1999 should be familiar to most people in the forest and wood products industries. Recent media coverage and opinion following the release of the latest Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) Australian Plantation Statistics 2023 Update (August 2023) has focused on the decline in the national plantation estate from ~2.02 million ha in 2009, to ~1.72 million ha in 2022 – a 15% drop or ~300 000 ha removed. The key reasons for this area decline are well known:
- Clearing and reversion of plantation land to agriculture or another higher and better land use.
- Harvest with no replanting due to a sale of the land, or conversion to another land-use, or both, because plantation forestry is not being the highest, best and/or preferred land use by the landowner.
- Loss of plantation through bushfire, cyclone or other damage agent with no replacement.
- Correction or provision of more accurate area information.
However, most of the decline is attributable to the hardwood plantation estate – ~94% of the decline in fact. In 2009, the hardwood plantation estate had reached its peak. Most of hardwood plantation trees had been planted under the managed investment schemes (MIS) promoted by companies and financial advisors since the mid-1990’s. But following the global financial crisis (GFC) most of these companies went into administration and were eventually sold to institutional investors, and the planting of new areas all but stopped.
Post this disruptive period the new owners/managers of these estates made it clear that they expected that ~30% of the plantations they had purchased would not be re-planted as they were not the highest and best use of the land. This has by and large occurred as the hardwood plantation estate has declined by ~31% between 2009 and 2022. Given that it is likely economics has driven this decline in the hardwood plantation estate, and it was anticipated a decade ago, the real question is – will the decline continue? This would be a truly worrying outcome.
For further information and analysis contact Margules Groome.