This piece was written and provided by FTMA Bronze Sponsor, Programmed Timber Supplies.
Time for the crystal ball generally but there are things becoming apparent that will change the course of timber availability and pricing.
One major factor is carbon pricing. Whatever your view of nett-zero or carbon constrained economies are, it is going to affect what happens in our industry.
Global per capita wood fibre usage is increasing and will only keep going up in our lifetime. Pricing mechanisms will be put in place that will be influenced by government policy and community expectation but will be market driven at the end of the day around these influences.
Trees don’t grow overnight but our developed world view is that we need to decarbonise the atmosphere now. Without significant change to global forestry practice, resource will be tight. Maybe not to the degree as today in our industry but overall will be tight and new industries looking for that same original resource will have an impact.
To secure the resource our industry requires we will need to pay the price. Other emerging industries are incentivised by a carbon price element. We are true Carbon Warriors and our message needs to be out there because other competing industries for the resource base their whole existence on this banner.
With a certain understanding a carbon price mechanism will encapsulate the whole wood fibre market across all sectors and industries, the resource base will increase in price by that same, if not higher rate. If there is an incentive to grow trees, the price will have to be paid somewhere. Doesn’t really matter if there are credits, offsets, rebates etc. the value of wood fibre will increase.
The detail of all this is still uncertain but the nett outcome is pretty obvious. Wood fibre is going to be worth more in the future. Why is JP Morgan buying global forestry assets?
So what is our industry’s response going to look like? Without any uncertainty we will be paying more for our timber than we have on average over the past. All wood fibre will increase in value – all grades and qualities, not just structurally graded product – that is happening now. Like we’ve seen elsewhere – ‘no more cheap cuts of meat’.
We have no real alternative but to make sure we are extracting the value from the resource efficiently. And morally that is a responsible virtue.Over the past 20 years, particularly the fabrication sector has learnt very well how to optimise the timber length they have purchased through better saws with their length and nesting optimisation software. The next critical step is to optimise the purchase – as opposed to optimise what was purchased.
The current and enduring pressure on MGP supply can be eased by the industry’s better alignment of wood fibre attribute to final application. There is no value in over specification but there is absolutely no future for anyone in underspecification. This is what fibre optimisation is about. The technology is available to achieve a fully optimised engineered product that is fit for purpose whilst ensuring acceptable visual appearance is maintained.
Greater optimisation and utilisation is where our industry will head in both wood fibre and labour. The management of wood & labour supply and their pricing will be critical for industry to manage but also represents commercial opportunity. It is the opportunity that drives us forward.
Programmed Timber Supplies truly sees the opportunity and works with suppliers and customers to ensure real outcomes are achieved through a more considered product and service offering to supplement existing channels. In a fibre constrained market the questions should be asked – how many more frames can be made with the same volume of MGP or how to make the same volume of frames with less MGP?