Forestry Statistics

The Log Price Collection Process

The MAF Website
Availability of Log Price Information
Acknowledgements

The Ministry of Agriculture and Forestry collects log prices more to analyse trends than for marketing purposes, so it does not collect spot prices, day-to-day prices or one-off sale prices. All data published are historical, usually on a monthly or quarterly basis.

The Ministry uses three sources of information for collecting radiata pine log prices:

Surveys of a selection of major New Zealand log suppliers for indicative domestic and export log prices. These are published quarterly on the Ministry's website.
The Japan Lumber Report for A and J grade export prices.
An Overseas Trade Price Index for Exports of Logs, Poles and Sawn Timber based on exporter declarations, published quarterly in the Ministry's Statistical Releases.

Export log grades are typically measured in Japanese Agricultural Standard (JAS) cubic metres. A JAS measures logs according to prescribed formulae. Domestic logs are typically measured in cubic metres or tonnes. Conversion factors between all three measurements vary owing to a number of variables including wood age, log size and taper, but are mostly within 90 percent of a 1:1 relationship. Conversion factors are assumed to be 1:1 on this website.

Log prices can be quoted at a number of different pricing points, such as "cost insurance freight" (or c.i.f., i.e., landed at an importing port), "free on board" (or f.o.b., i.e., loaded onto a ship at an export port), wharf gate, on truck and at stump. Export margins charged by New Zealand's log buyers can range from 4 to 15 percent of a landed price at wharf.

Log prices can vary depending on exchange rates, log measurement methods and log grade specifications. Log grades have also changed over time. Some industry commentators say log size has decreased within grades (both in small end diameter and length) but log quality is perceived to be increasing (particularly clearwood depth in pruned logs). Log prices quoted on the Ministry's website should only be compared with other prices with these factors in mind. Prices should be based on a common pricing point.

The MAF Website

The Ministry of Agriculture and Forestry collects information on log prices from a range of contacts in the forestry industry and publishes them on the MAF website every quarter. A number of log grades have been selected to represent the overall log market. For the export market these are Pruned (to Japan and Korea), A (Japan), J (Japan), K (Korea) and pulp grades. For the domestic market these are pruned (P1, P2), unpruned (S1, S2, L1 & L2, S3 & L3) and pulp as defined by Forest Research, and run-of bush (a mixture of grades, generally unpruned). To see the log grade specifications click here.

Log specifications can vary significantly between suppliers, even within a particular grade. For example, K-grade log specifications may vary in length, small end diameter and allowable knot size. This is even truer of domestic grades, where the Forest Research log grades used by the Ministry of Agriculture and Forestry have not been universally adopted by the industry.

To help overcome the situation, the Ministry relies on industry sources to provide log prices to the nearest log grade equivalent, and to identify any significant changes to log specifications.

Prices in the Japanese market are generally set quarterly, Korean prices are commonly set shipment by shipment, and mechanisms for other export markets vary. There is no standard time frame for reviewing domestic prices, which tend to fluctuate depending on the nature of sale agreements. The Ministry of Agriculture and Forestry only records average log prices from its industry contacts on a quarterly basis.

Export prices are usually provided by industry sources in Unites States dollars, which the Ministry converts to New Zealand dollars using a quarterly exchange rate. The Ministry uses f.o.b. as the pricing point for export prices, while the domestic pricing point is "landed" or "delivered" at mill. This means the Ministry has to make some assumptions about costs if the log prices provided by the industry are to another pricing point. Prices are initially collected from individual companies, but the data are destroyed once these have been aggregated and averaged, to retain confidentiality.

Where possible, the quarterly figures encompass a range of log prices for each grade, rather than a single figure. This reflects the range of prices associated with each grade and helps preserve the anonymity of individual company data. The Ministry uses a mid-range price in analysing these data. While a volume-weighted average price based on each company's production would give a better measurement of actual prices, volume data are not readily available.

A new feature appearing with MAF's quarterly log prices is the 12-Quarter Median price series. The Ministry's 12-Quarter Median prices are derived using the median prices of each log grade, averaged over the last 12 quarters. This price series will tend to buffer the effects of extreme spikes of troughs, which can occur from time to time and tend to distort trends in the short term. This feature will be useful to those interested in analysing longer term price trends.

Availability of Log Price Information

The Ministry of Agriculture and Forestry's log price information is available from a number of sources. Radiata pine log prices sourced from industry contacts are published quarterly on the Ministry's website. These data are also available by agreement on Forest Research's Woodwide database. A and J grade prices (sourced from the Japan Lumber Report) are available free of charge from the Ministry and the Overseas Trade Price Index is available through the Ministry's Statistical Releases by quarterly subscription.

The Ministry's general policy is that indicative and aggregated information on log prices is freely available wherever possible and can be quoted provided the source is acknowledged.

Acknowledgements

The Ministry of Agriculture and Forestry acknowledges the assistance of the forestry and sawmilling companies in preparing and supplying radiata pine log prices.

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