Poor Pruning Operations Can Cost Dearly

We often field enquiries from woodlot owners concerned they are paying too much for their pruning. Frequently it turns out that the problem is related to the basis of payment. Rather than paying for the work by the hectare of treatment, they are paying by the tree. And because they don't have accurate stand maps, and don't have a quality control system, they have no choice. This can cost them dearly.

The main problems that arise are:

  • Too many trees get pruned. This is a natural tendency because the more trees pruned, the more the contractor gets paid. Anything over 385 stems per hectare requires an exceptional growth site for trees to attain the required pruned log diametre at harvest.
  • The high pruned stocking usually gets carried through to final crop stocking. If it's the same contractor doing the waste thinning, they will be reluctant to cull out the excess pruned trees (that's more work, and it could raise the question why so many trees were pruned in the first place). If it's a different contractor, often workers will still base target stocking on the pruned-tree stocking on the assumption that it is correct and they think it's a waste to cull out pruned trees - even if there are too many of them.
  • Smaller trees get favoured. Pruning smaller trees involves much less work than the bigger dominant trees, but the price is the same.
  • Pruned tallies get inflated. This is also known as "ghost" or "phantom" tallies and is a regular problem with less scrupulous operators. If the forest owner doesn't have an accurate map of net stocked area, it is much more difficult to pick up inflated tallies.

Normally the net result is woodlot owners pay too much for a poor job, and have no way to verify the quantity of work done versus the invoiced amount. Worse still - ultimately the pruning generates little or no clearwood, and pruned logs are excluded from the high value markets. We regularly see examples of this through our woodlot harvesting operations. However, because of client confidentiality, and client privacy, we cannot report on specific instances.

We estimate that where this problem is arising, some woodlot owners are paying in the order of 30% too much for the work. Combined with lost future harvesting returns, the cost to woodlot owners is significant.

The key to avoiding this problem is an accurate stocked area map, good quality control plotting and paying for the work per hectare (not per tree). This means the forest owner is in control of the operation and can't get ripped off.

PF Olsen undertakes robust quality control using accurate maps and contractor's payments are solely based on this assessment. Importantly, we do not calculate payments based on tally information from contractors.

With the price of pruning labour in the region of $0.90 per metre, a well managed 5.5 metre prune height on 350 stems per hectare will cost $1,732 per hectare (all lifts combined). With the issues discussed above inflating the cost by approximately 30%, an additional $620 per hectare can quickly appear. This would bring the operation cost to $2,252 per hectare.

The cost associated with degraded pruned logs and subsequent lost revenues amounts to much more. If all of the pruned volume has to be downgraded from pruned logs to a S20/S30 mix (due to inadequate diameter growth) there is a significant loss. With pruned logs currently selling for around $130/tonne and the S20/S30 mix for $75/tonne, the lost value in this example is 150 tonnes x $25 = $8,250/hectare!

Top quality silvicultural management and mapping investments are easily justified considering the magnitude of the above costs and revenues. An example of a PF Olsen woodlot map is shown below.

Note: If you click on the map above, you can view it at actual size.

The woodlot maps created during this process have many other benefits:

  • Required for entry into PF Olsen's Group Scheme insurance for wind and fire.
  • Required to verify areas associated with forest valuations.
  • Used in harvest planning and pre-harvest inventory.
  • Used in harvest planning and management.
  • Will be required to join the Emissions Trading Scheme.