Forestry Now

Dermot McNally 0:02
welcome to forestry now, where we explore the forces impacting profitable and sustainable management of commercial forests and natural woodlands. I'm Dermot McNally, today, I spoke with Paul Lafferty. Paul qualified as a forester in 1989 but now runs his own auctioneering firm. He sells residential and commercial property and also runs for sales.ie which specializes in the sale of forests, refore land and standing timber. In this interview, we speak about his 11 years with Greenbelt, when our forestation rules were very different. We discussed how he manages his own forests, and then Paul gave me a feel for the typical prices that are being paid for forests in Ireland right now, and how an existing owner might prepare their forests for sale. Finally, Paul also set a very high bar for future guests by offering to be one of the sponsors for this podcast, which I'm delighted with. So thanks to Paul for that. You'll find relevant links and contact details below in the show notes, and I hope you enjoy the conversation. So Paul, would you say that the forestry degree from UCD was good preparation for work with Greenbelt in 1989

Paul Lafferty 1:15
Yes, yeah. Well, it was standard forestry degree which you needed to get a job. But I suppose, like all of degrees, you know, the practical side kicks in. But yes, certainly I knew a sickest Bruce, I suppose, from an hour's ruse or a pine, which all you needed to know in 1989 so, yeah, we, we were lucky. It was quite a big class that time, and we had jobs before we before we actually qualified. You know,

Dermot McNally 1:39
was there any element of work placement in the in the degree Paul, or was it just summer jobs?

Paul Lafferty 1:45
No, actually, it was a you had two years first and then you had a full year, practical year, full year he went to got a job with quiche. And we're all over the country, from Donegal to Waterford to mcroom leash and all over there. So yeah, we had a full year, and you were fully paid as a forest worker, which was, this was great when you were a student.

Dermot McNally 2:06
Yeah, very good. Yeah. I don't think they do that now, Paul, I

Paul Lafferty 2:09
would know there's no it's much shorter. They do practical summers, I think. And I think now, but yeah, that was the way it wasn't in my time as they said,

Dermot McNally 2:19
okay, and Paul, would you describe what your role was with Greenbelt then, from 89 to 2000

Paul Lafferty 2:25
from 89 Yeah, well, I was basically a forest area manager, I suppose. It started off with working under the wing of a few of the other foresters, more senior foresters in Greenbelt at the time. I think it was two or three ahead of that. And as your main job was a forestation. So procuring land, basically, if land come up for sale and it was suitable for forestry, your your when your jobs was to buy this, and then if people, farmers, owners, came to you to plant, and you organize the planting, and got the got the approval, which was very simple at the time, and applied for the grant, stood up a species map and sent it off to Kevin, and they submitted the application, and if we met the inspectors on the ground then, and you know, they had a few, maybe corrections and things like that for you to do, but the main job was, was definitely afforestation. And contract with the contractors, then you had some con men subcontractors and dealing with them and haggling over prices and all that, and making sure everything tried to get everything through the second phase of the grant. After, after four years, big problem we had in the in, in this part of the country, was trespass, of course, with animals trespassing and all this and and then, of course, frost damage. In the 90s, he had a lot of frost damage like we were just planting the species decision, I suppose, in the early days. Well, first of all, every bit of land would be planted. There was no question, oh, that might get approval. Everything was approved from and you planted 100% to the ground, you know, you had to, you literally had to put the plow into the river and plow out from it. We were doing some single more board plowing those times. And if you hadn't planted up to the river, the men, the inspector, would be planted Docu area, you know, and under hedgerows, or if you left anything out that wasn't planted. So, as I just say now and I come there, they're kind of 110% planted, you know. And the speed the species choice was either Sitka spruce, pure Sitka spruce, and a Bigfoot pine, or pure pine, you know, and maybe a little dress in a broadlease but very, very little vessel, like, you know, you planted up to the road. You couldn't keep back from the road as well, or you'd be deducted area like, you know. So of course, this has all changed now, and rightly so. Because, you see, I suppose the problems we're having now, our plantations are planted 30 years ago, where they were planted right up to the road, like, you know, and that was the requirement. Same with the with the under the power lines, the electricity lane as well. You know, the only tool to keep the search amount out of it, and that's that's probably going to change as well. You know, it.

Dermot McNally 5:00
Paul, just from a financial point of view. The there were deep peat bogs planted back in those days, but surely that ground must have been a lot cheaper to buy and therefore more profitable in the short term. To put

Paul Lafferty 5:17
differently, yeah, yeah, the big areas. Now, I wasn't involved in a huge amount of those areas in the west of Ireland, is short working over there. But yes, they were, they were quite profitable for the company, like you'd double more board plow them, you know, planting was quite easy, as long as the lads could stay standing on the area and a ditch ran across it, and you could do hundreds of acres, you know. And there was hundreds of acres planted, you know, which mostly spruce and pine mix, and they were quite profitable. Yes, yeah, yeah. I imagine, yeah.

Dermot McNally 5:49
Paul, was there problems getting those ones established? Did you ever hear or were they just lashed with with fertilizer? And, you know, we're given

Paul Lafferty 5:55
500 kgs of ground rock phosphates initially, and sometimes you'd have to come back, maybe after year four for the second phase grant, and apply more more fertilizer and maybe some nitrogen, you know. But if you got away with it, you didn't

Dermot McNally 6:12
farming back then was was intensive, and people were farming to the ditches and farming to the roadside and farming to the rivers. But did anyone in the live situation of planting a new farm? Did any of the neighbors query how close forestry was coming to them? Or was it people were people, like, a little bit unaware of what was coming down the track?

Paul Lafferty 6:32
One of the usually, yes, that was, that was another issue. Was negotiating with that. Usually, a lot of the cases, it was if somebody planted themselves. They would only be planting the poorest ground, but a farm usually would have come up for sale, so that the forestry would have, would have bought it. You know, we'd applied. Now, we didn't have to rub noses or anything, but we'd apply. The next thing we'd we would rock up to start bounding, maybe, and then there'd be a delegation at the gate. And a lot of things, you know, and very, very often people would want to swap ground and all that kind of thing, you know, the better ground. And that'd be, sometimes it'd be there would be, you know, quite hostile now, you know, people there, and you'd have to try and negotiate with them and and that kind of thing. And then to be planting beside houses, and we would give setbacks and things like that, you know, to them and and work, work with them as best you could, you know. You know, when I started, the premium was quite pathetic, you know, in hindsight, but land was like the best, top price you'd pay for land at the time was about 500 an acre, you know, and then, but you we bought a lot of land that, you know, on average between 203 100 an acre. But the premium was only 47 pound an acre for the first 20 acres, I think. And then it went down something like 15 pounds an acre, you know. And I remember, you know, at the times the brands were poor, so we, the company used to have to charge money for the for the first four years. Sometimes they'd have to give over the first four years of premium to cover the actual cost of afforestation at the time. So and then, usually you get, you get the grant, and then you get the first four year, then mandate the first four years of premium. But then you tell them, will you be getting 50 on the 50 Euro an acre for the next 10 years, or something like that, for 50? I think was a 15 year or 20 year period. Don't take it on the 20 year premium thing. That's 50. But then, if they had was 50. But then if they had any on non farm income, they weren't entitled to a premium at all, you know.

Dermot McNally 8:27
So, oh, okay, okay, so quite a few terms and conditions, yes,

Paul Lafferty 8:32
yeah, yeah. But it kind of started and it kept increasing, you know, to where we are today. You know,

Dermot McNally 8:37
yeah, yeah, very good. So mostly for probably not a lot of private clear felling going on back in the 90s. Then, no, no,

Paul Lafferty 8:46
no, we didn't. She wouldn't have seen a plaster or forward, or you don't see them in Irish forestry magazines or that kind of thing of her, you know. Or if you were up with where queens who were working nearby. But no, there was no private clear filler thinning been done. There was no Private Forestry there, you know. There was some maybe big estates that had it, but not in the part I was dealing with, you know. But no, no, definitely not, you know.

Dermot McNally 9:10
Okay, well, we'll look at good to get the background there and a little bit of context for for how you started out and what way that was. Let's move on then and and talk about your own forest, Paul, could you give me a quick overview of your own forest that you planted? Yeah.

Paul Lafferty 9:26
Well, one of the good things, I suppose, working with Greenbelt, they allowed us to, if something came along that you you were able to maybe found a bit of value. And the first place, I think I was, was 19 acres, actually, I think it's over near Kelly there, and think it was 3000 pounds at the time. This is way back in 1990 or something, and I got to go ahead that I could buy it myself. And the way we was, I was the same as a client to them. So they just grant, did the grant, and that kind of thing was mandated to the company. And you're just like another client to such so. You could work away. There was dog. That's the way I did it anyway, you know. So, so that was that, you know. So that's that was, that was planted with spruce and pine, some pine in it, and small bit of larch, I think actually, because it was some dry knolls and hills in it. Now, you know, I suppose, looking back, I suppose it was, it was, if it hadn't been planted today, it hasn't been planted, then it wouldn't be, planted, then it wouldn't be, probably, maybe not, wouldn't have been planted today Now, certainly wouldn't have got the 19 acres in it, and also that they've planted. And that worked out. And worked out well, no, well, I had trouble with, with with fires, and I was actually was damaged with fire. And on two occasions, actually, you know, so, but not all of us was burned. So I had to go through the reconstitute. Reconstitution on it, and we got the reconstitution grant and some insurance payment as well, you know.

Dermot McNally 10:47
And so Paul was running down to a heather bog. Or how did the fire get going? I don't know.

Paul Lafferty 10:52
It started from the side of the road. That's all I can say. You know, I got a call, but we were, we were able to successfully extinguish most

Dermot McNally 10:59
of it, and tell me, then Paul, just to bring us to the present day with that particular forest. Did you thin? Did you put a road in? And did you clear feller? Where is it? Now that

Paul Lafferty 11:10
one is the stoutest law you class really fast, and of course, rises up part of us. So, yes, it was thin. Now, as it happened, another piece of ground came up beside it, so we put the road in from, from the other piece of ground, which I planted later on, again, like that. I picked up another couple of acres at the back of us and picked up, you know. So they're kind of a piece male jigsaw, which is the way it kind of goes. So, yeah, that was there. All of that ground now has been thinned, thin twice, you know, and so, and some of it has unfortunately been windblown now. So we're, we have a clear fella, we had a clear felling license. And we're, we're at the process of clearing that now as well, you know.

Dermot McNally 11:49
And Paul, will you clear it entirely? Are you going to leave some of the slower stuff for a later clear fell

Paul Lafferty 11:54
well, as much as possible, only what's what's damaged because of the prices at the moment, it's not, it's not viable to to clear it much more than but now there'll be pockets, like there's a standard that you know yourself. They'll only blow down if you don't, if you don't clear them at this stage. You know, I could have cleared them a couple years ago, but being the wise old fool I am, it was waiting for the price to come up a little bit and all that. So, you know, the what's gonna say the plans of mice and main is that have some cliche like that, you know?

Dermot McNally 12:21
So, yeah, well, the crystal ball would be good to have, and it's hard to make those decisions. It's never simple. And Paul, so you describe land that was a little bit prone to fire and that mightn't get planted now, I mean, when you do cut clear fell, the weakest part of that ground is it, is it fit to carry a second crop? Or what way will you handle it at that stage?

Paul Lafferty 12:46
As it happens? Yes, the areas there were times we were quite fertile, like, Yeah, I'd be, I'd go back with the maximum amount of sick, I suppose I could, you know,

Dermot McNally 12:54
and would you, would you put in some pine in it, just if the soil is a wee bit weaker, or is it good enough to take a pure sit good crop?

Paul Lafferty 13:02
Yeah. Well, the areas that I go to your fellow now are pure spruce, and they'll carry through spruce again. But yes, I'll have to look at, there is an area that's like, it's, it's over this 35 years of age now, and it's some of that for some of us didn't want the when that's cleared off at, yes, I'll, I might have to consider that. But there was always the thought like you that you'd plan, first of all, you'd plan to spruce and spruce and pine mix. And that's the second rotation that was the thinking and the thought of the time that you it would be good, and it could ameliorate the soils, as I said, and improve it with the drainage that you should be able to carry a pure spruce crop. The second rotation that remains to be seen, I suppose you know,

Dermot McNally 13:38
again, thinking even further down the line. And maybe you're not thinking it this far, but your replant now with the way the storms are going and the wind, Have you any idea whether you'll continue to thin as a practice for that type of a plantation, or will you just leave well enough alone and just bring it to full maturity before clear fell.

Paul Lafferty 14:01
Yeah, it's something you'd have to probably won't be my decision. It'll whoever inherits us, after us, I suppose that will decide. But you know, the usual thing is, you know, with these things, you know, everybody will brace back, and no thinning, no thinning, no thinning. And then it'll be Wolf, Wolf. Nothing has happened for for years. And then we all start thinning again, you know. And somebody come up with this great idea of thinning, you know, and then it'll be all flavor of the month again. And, you know, maybe, maybe, maybe not, but certainly, you know, I think you know where this, where the soil is good drainage and the soil is quite good and fertile. They shouldn't really, you know, like with storms came in down south in 2014 and damage, you know, plantations there. All it came in Limerick, Limerick, day there, and blew in through Limerick, and up through temporary Kilkenny and on that way, and damaged a lot of plantations there. And so it may it may it may not come, you know. So that's it, you know, so many years ago, so you don't know, but I would. I was still thinking, you know, you're going to do, do a certain amount saying, because you need, you know, the income comes in, and it means that you're going to clear fell much sooner as well, you know. And your your percentage of saw log in your crop will be much higher than if you don't think, you know.

Dermot McNally 15:12
So, yeah, pros and cons, I suppose, yeah, pros and cons, yeah. We'll get back to the conversation with Paul Lafferty in a second. But if you're in the market for forestry lands, go to forest sales.ie. Where you'll find forest for sale across the country, and all the information you need to make a decision that's forest sales.ie. Now back to the interview with Paul himself. Maybe you'd tell us an idea of the type of forests and the land you're selling on fire sales.ie?

Paul Lafferty 15:43
Yeah, well, we sell big and small, I suppose. So, you know, obviously the bigger ones there, there's more in them I suppose to sell, and they're getting make bigger prices and bigger, a bigger, bigger demand from them. But there's also the customers there that want to buy the smaller one, you know. So if you know, 5060, acres of plantation comes up, you know, pure spruce or something. There's, you know, the big institution investors are typically gonna be involved in them. But the smaller person that is 20 or 30,000 to spend, you know, the so the smaller just can't get there and can't get by anything. And that scale, obviously, but they still like to have a piece of forestry. And there's, you know, I call them, kind of recreational forest and kind of hobby forest as well. So the small areas stay still as well. And we have a number of them on the Marin, we don't turn away anything really, you know, first, if it's, if it's for further, for the website for forestry or that land are our forests, you know, and smaller ones. And people are always looking for something with a bit, you know, with maybe a ruin of a house on us, a stream, you know, in a good area beside a lake and all that, and smaller ones like that, we will sell well. And I find people have, you know, maybe 2530, up to 30,000 to sell, to spend on those you know, they don't. You won't spend 300,000 on a recreational project, but you might spend that kind of, that kind of money so, but obviously, the, you know, the bigger ones, the better. The 4050, acres of pure spruce and that were planted, that were planted back in the 90s, they're there. They're the ones that are in high demand and get get good prices, you know,

Dermot McNally 17:13
yeah, well, you mentioned institutional investors there. So let's take the case that you have an institutional investor coming to you. What are they looking for when they come to buy a forest, apart from size and species? So, so what are the factors that they look at? Because probably we'll have forest owners listening who in the back of their mind might one day sell, and is there things they can put in place, or what can they do to be ready for that day? Should it ever arrive?

Paul Lafferty 17:43
Yeah, I suppose what the institutional investors are looking for like is a big area, you know, of productive conifers, generally speaking. And no, the access is huge, you know, so and, and the location you know so and you know the nearest to the sawmills and, you know, main archery routes and that. So you have no trouble with, you know, bridges and all that. But, you know, waitress and on roads and so, you know, if you have to haul, you know, timber is a bulky, low, relatively low value if you can, if you haul it too far, it's not worth hauling it, you know, at some in some respects, so that they put the forest owner that they can own, they can't change. That meant they can't change the location, or maybe not the species, and they can work on access. So definitely having a felon license and having a road license if it hasn't been tainted. But you know, the fact that it has been tainted, if there's a road in it has been successfully changed, it tells it ticks an awful lot of boxes, because that means, well, okay, so it's, it has been thinned. And so that means trucks can come in and leave successfully, and it's, and then it usually, after us, has been thinned. So that means it's, you know, it's, it can stand up, and it hasn't been damaged, hopefully by a storm like that. So having to fell in, having a fellow nice and some of the road ideally have the road in and and maybe for certain sections of it might did ordinary always some part of a forest, it could be thinned, you know. So if those things are done, soon as I see a road in, if you look at the photograph of it and you see a road in, well, you know that well, at least the trucks were able to come to to make the road, and the digger and all that. So that's that ticks the box straight away. You know how you know. But if the institutional investors, like you know, far away, you know those now in the West Coast, they're not that hot on them, you know,

Dermot McNally 19:31
yeah, yeah, what size of plantation are they looking for? Am I right in saying that, maybe that they're accepting smaller sizes than they would in the past. Or how do you see that at the minute?

Paul Lafferty 19:43
Generally speaking, I suppose the sort of a minimum, sort of idea of 30 years. But again, if it's a joint, something they have, they'll look at it, you know. So and they'll probably bid accordingly as well, you know. But sometimes, you know, some piece can be the vital piece of Jigsaw for access. As I said. And bring them out onto another road, or connect up another plantation they have. So, like, I would always do a bit of detective work, see who your neighbors are. And, you know, if a plantation comes up, and, you know, huge amount of plantations now would join other plantations. So it's, it's, it can be, you know, and you know, not everybody knows who a plantation is. Like, it's one of the things that can be hard to find out who, even if it's might be belong to somebody who either previously, and maybe call that, but we could change hands a couple of times without, without general public knowing, you know, so important to know who, who they have, who owns it, and they may be interested in buying another piece beside it, but isolated pieces on their own, with with bad access, you know, they're the institutional investors aren't going to buy them, but the smaller operators, you know, and might have an opportunity there to to buy a place, put their toe in the water and and buy a plantation. And, you know, by the time it comes to clear to thin in it, maybe it was a young plantation the fields decided could be, could be planted up as well, you know. And but I'd like kind of to see more cooperation between owners, getting getting roads put in in particular, and, you know, working together with felon license, and that there's a lot of work to be done there. You know,

Dermot McNally 21:10
are any of the institutional investors, or is there any specialist investment houses that are looking seriously at broadleaf plantations?

Paul Lafferty 21:19
Well, I suppose you know there was back maybe, let's say, if we went back when I started, we'll say, in 2011 institutional investors didn't want to know about broadleaf, didn't want to know about pine, and people like it. If you had, we'll say, had 4050, acres. And there was, you know, 10 acres the far side of the road that was planted in in ash, or maybe oak, or something like that. They would say, Well, if you want, we're not going to give you anything for that. We could hold on to that, you know. But then there was a sea change in that when, you know, the environmental awareness came along and they had to be seen to be green. So they, you know, they want to be able to say that they had, and they want, generally wanted to have a little bit more diversification in their portfolios. So they were beginning to not put huge value on it, but at least they were making an offer on it and including it in it. And they were, you know, and of course, when they, when they bought their land, then if they had to, anyway, because of their rules, to plan to search them out of broadleaf So, and we had, you know, up to last year, maybe up to two years ago, a lot of the big, big multinational companies, your apples and Googles and these things and McDonald's and that were buying plantations and invested in it just seemed to be green, you know. But actually, unfortunately, when the new president of America came in, and they have kind of stopped that, like, you know, this, this, unfortunately, they have it had a huge effect that way, you know, because it's not seen, it's it's not seems to be important. Which they seem more it becomes more and more important to every day. But unfortunately, powers that be seem to have changed people's mind in the higher levels of these companies. You know,

Dermot McNally 22:59
very good and Okay, so let's look at the scenario Paul, where I was bringing my 15 year old mixed species plantation to you for sale. I'm still in premium. What's the information you want to put that live on the website? Or what do you generally gather before it goes live?

Paul Lafferty 23:17
Yes, you will the first day. I suppose, obviously we need to the species map. And if there's a premium left, the actual how much premium is it? How many years are left there? There are key things. So I tradition normally do, would do evaluation for a person at the start to say that, send me the information. I do evaluation at 12 year, let you know what it is, what it would make in the current market. And then they can decide then whether they want to, really want to proceed to put it on the market. Then, you know, and with a small fee for that, just to keep ourselves a business, I suppose, and then if they proceed to want to put it on the market, we option, you know, typical auctioneer and fees on it, and smaller advertising to advertise it on the website, and generally, that's, that's enough to get a plantation sold. You know. Now, as I always say to people, forestry isn't the quickest seller in the world, but the good thing about forestry on the market is that, you know, in 99% of the time it's, it's appreciating as it goes, you know. So even if it's sitting on a market for six months, you know, more than it is. It has, it's either gone up to a growing season or has gone through another growing season, you know. And sometimes I would do value or if I do evaluation that people may, may, may think it's, you know, not less worth a lot more. And they might think it was surprise it was worth, you know, I thought it was worth a lot less, but it actually was worth more. But in some cases, people have more ambitious prices, and sometimes it takes a while for it to grow into that price. And if the market rises, you know, and and we sell them, they get offers on them, or try and get as many offers as we can others. And what we can do for people is get competitive bidding, bidding on a plantation, you know. So the amount of people that are on the website. And will, you know, get get interest and start bidding on it, you know. And then at least it finds its own market. As, as I always say to people, you know, it's, we could all 90 hope that it was worth X, Y and Z. Would you have to get somebody to actually commit to to paying a price? And that's the real market valuation of it, you know.

Dermot McNally 25:18
And so you've got my forest up for sale. It sells for 200,000 have I commissioned to pay? Or what happens there?

Paul Lafferty 25:25
Paul, yes, yeah, yes, yeah, pay. Yeah. Auctioneers fees typically is 2% of the sale price, plus fast. You know, now, if it's a small plantation, we do have a minimum fees as well to cover ourselves. Obviously, just sell something for 30,000 or something, you know, 2% so you won't play a lot with that, you know. So, so there we have minimum fees rated for around 2000 to two and a half 1000, depending on the plantation of that, you

Dermot McNally 25:51
know, Paul, just on the marketing and the imagery you go out on site. But do you use drone photography? Just to give the an added bit of information there for prospective buyer.

Paul Lafferty 26:04
We have, yes, we have, well, I suppose one of the things we have is the Google Maps, really. So we have a, an interactive Google map of each plantation is, is, mark is, is plotted on a specific Google map. So, so then we put all the plots in and all the all the details in on us and features. So if you click on the icons on it, on the website, you'll you'll see the class and what information we have on it. And we do, yes, use, use drone footage as well, and the land registry map and all that kind of information is there. We try and give as much information as we can for people go out on the ground to get a good, a good handle before they go and they're going to go out on the ground. And actually, it depends on, if you have a smartphone, and you can actually log into the log into the ways of bring up the Google Map, and it'll show you the boundaries and the plot boundaries and all that. If, of course, it depends on how good your if the coverage is on the forest, but it's gone. Now I've quite a lot of places you can get good, good, good data coverage, you know. So that can be useful too, especially if you have a giant plantations and that so and they, you know, you'll know where you stand. And you can take a plaster in an area, you can record the area. And can be useful when people are going out on the ground and you were saying, there, or somebody goes to me, somebody going to me that's we do a lot of that, do a desktop valuation of it, so and then maybe a site visit. But you want, when you have good area photography, and there's between Google and the server, several other satellite imagery that we have access to, some some more up to date than others, and we can assess so you have to do less time sampling on the ground, because you can see the uniformity of one area, then there might be an area.

Dermot McNally 27:49
Okay, well, maybe we talk about a few specific examples that you're either selling Paul or a forest that you've recently sold, just to give listeners an idea of what type of money a good, productive forest is making. So we can't there's obviously a huge range of forest quality out there in terms of soil or elevation, but let's assume that we're talking about high yield class forest with good access, and maybe we'd look at a Connor, for example, Paul for what you'd expect a good 20 year old plantation to make, or something similar.

Paul Lafferty 28:26
I suppose, if you had, as you described there, now, if that was in the Leinster area and Munster area, you'd probably get a little bit more for them than in the the conna Ulster area. So, you know, because the big population of the country is on that side. So, so the so you'd be hoping like, I suppose, this year, particularly, your prices are back a little bit, but you'd be hoping it would make your six and a half 1000 per acre, maybe, if it wasn't Leinster, Leinster, Munster area, you know. And talk about the east of the country there, you know, we'd say, and in the West, it might be slightly less, like, you know, you know. And of course, this time last year was a good bit more, you know, but prices will recover at all, but So, so the, you know, that's where I'd be started, hopefully target of that. And again, with competition, it can, it can go in excess of that. And if it's, if there's an issue with it, it may make a little bit less, you know. Now, I suppose most people, you know, if the foresters are sent out for the name on behalf of the company or whoever is buying it, that, you know, we work on the productive area as well, you know. So they would value it on the basis of the productive area. And same as I do, I suppose you know. But so you take the areas of pure spruce theories that are noise boosts and the areas of biodiversity conifers and that, you know. But if those areas are 15% biodiversity, you know, you wouldn't be able to lock value on those in those areas, you know. So, so generally, the net, the net productive area, is the area that you know is going to pay the day way at the end of the day, especially if the premium is gone off, it will say, are waning or, you know, if it's a if it's a company, they'll only. Have get the premium for 15 years. So they could, even though the five years left on us, they there might be no value in that for them, you know. So, so the productive areas is the area that that really pays the assigns the value, you know.

Dermot McNally 30:15
So, so in that case, we've got 50 acres, let's imagine we have 40 Acres productive that's the area that we're attributing the six to seven grand an acre, Paul, is it?

Paul Lafferty 30:25
Yes, yes, yeah, yeah, definitely, yeah. You might be, you know, the corner of the broad east, I suppose we could, you know, two, two and a half dollars. Now, any ironic situation is, I suppose, if there's ash in it, you know, it's worth more value, more value. There's a couple of hectares of ash in it, and Eddie get the Russell grant, and it can be replanted with spruce. So that's more valuable than the oak and Scott pine has grown. Well, you know, that's how we kind of approach approach the valuation of that one. You know,

Dermot McNally 30:53
let me pause the interview for a second to ask you this, could your business benefit from increased profile in the forestry sector? Well, if so, Nebby, you should be advertising on Ireland's only dedicated forestry podcast, with new episodes coming out every two weeks. So get in touch with forestry now to see how we can make it work for you. Back to the chat with Paul. Okay, well, we'll move on then to a large broadleaf forest. Just to give listeners an idea of what a block of broadleaf only will make. Is it working out at the two two and a half grand an acre pole? Or have you seen broadleaf plantations with good access, let's say 30 to 50 acres. Are they making much more than that? Well, they

Paul Lafferty 31:36
are in some cases, you know. So again, if you're in particularly Leinster area and Monster area, will say, of Corcoran Tipperary and sort of East, East monster area. And they're making relatively good, you know, fairly good money, you know, on the region, what you're talking about there. And plus, you know, I would say, you know, now, again, more than likely there's some element of ash in it, so they're able to factor in that a little bit. But if you have quite a big area, it's only 10 hectares, so it's not, not a huge, a huge amount, like, you know. So, but yeah, like a lot of people, are looking at alternative uses as well, you know. And sometimes the bigger plantations will be sold for alternative, alternative uses. And there are a few sort of environmental funds as well buying plantations and converting them to CSC, you know, continuously, forestry cover and the like of that, you know. So, and some, even some conifer plantations are being converted, you know. And they have a funds, their fund there to do that. So. And there's, you know, other private investors as well that are interested in good quality, broadly, plantations for the for the, for the long term, you know, yeah,

Dermot McNally 32:48
so, so what are we saying? Then, Paul two to three grand an acre or a little bit?

Paul Lafferty 32:52
Could we could be more like and, you know, the bigger, the bigger the area. Sometimes the better, the better options and alternative uses and all that. And options are there for them, you know. But yes, it could be three. But three could be 333, and a half in some cases, like, you know, they depend on the people look at the quality of the ground underneath and and make a judgment on that, you know. But a lot of the people buy, the people buying those kind of plenty, are looking for an immediate return on it, you know, very good.

Dermot McNally 33:19
Okay. And then Paul, could we? Could we look at refore ground, or land that has been clearfeld again? Let's imagine that it has replanting license for Sitka again, and it's good access. Where are you seeing refore ground at the minute?

Paul Lafferty 33:37
Well, again, this is taking a bit of a hit, like we, I suppose we go back again to last year. I suppose it was, it was at around 2000 an acre and and now it's, it's back again to, you know, around 1000 to 1500 depending on how many, many acres are involved. You know, smaller pieces now will, will always get a little bit more, you know, if there's the reform around five acres, you know, you know, even as I was sick or you need to be getting 10,000 to sell anything, you know, nowadays, with costs and everything, and so they may get a little bit more, but there's surprisingly little of a comment being offered to me and and for the at the moment now, you know. And then again, it's not as easy to sell as I thought it would be, you know, some small places they are now, I suppose, and people wanted to sell them, but just, just not, not as fast as I thought it would be, because it's, it's a great opportunity for somebody who has the wherewithal to do their own, maybe do their own planting, and maybe, if they're very good at machine work, or that, you know, you can, rather than Paying the high prices for for land which, which attract a premium, and then get in there and get it, especially if you're, you know, in your early 20s or 30s, you know, in 30 years time, you could have a nice nest egg there without a lot of investments, you know. But, you know, between 1000 to 1500 depending on what sort of crop comes off, it like. Again. If you're a plantation that some you're going straight away, you're going to be 20% 20% broadly funded. So more than likely, even if it was 100% spruce or 100% conifer, you're back to so you're again, as I said, the productive area is going to be a little bit less. But and you're set back some road from roads, rivers and and any stream or Latin and so the, you know, people are looking at the productive area. It's not just going in, like I said earlier there where we, you know, planted every every acre, every inch of ground. You know, there could be significant area, unproductive areas in reforestation ground because of the terms of the felling lesson. So that's naturally kicks, kicks back into it. But, you know, they're at the moment. And I suppose maybe, maybe, as with those climate the new grants for reforestation, some people are looking at at those as well, and but they haven't had much effect on the on the actual demand or prices that we're getting for a reforerned, you know.

Dermot McNally 35:57
And lastly, Paul, just to keep it with the real examples, is there much coming online with bare farmland that's still being farmed, but has the full plant and permission for FD 12, the citrus circus brews category,

Paul Lafferty 36:13
again, less, less of that coming on the market, but there are some coming on the market, and people are getting approval and all that. But if it has, if it has approval. Then, as you say, for fg 12, and you know that studies in good demand, you know, and because getting the high premium and that so. And we, you know, we had sold, sold some of those at around the around the 8000 an acre mark.

Dermot McNally 36:36
It Paul, we never mentioned how the price of farmland and demand for farmland itself is affecting just that base market for for new plantations. There was a day when in certain parts of Ireland, the price that an investor might pay for forestry ground was higher than a local farmer might pay. Has that changed? Or is it similar at the minute?

Paul Lafferty 36:58
Well, similar at the moment, I suppose, in some respects. But two things have happened, I suppose, and they're going against in opposite directions. First of all, I suppose, you know, land is approved now a it's nearly the best of agricultural land, so it's been approved only on the the areas that would normally be approved. And when the general public would say, Well, that should be planted, you know, that's not being approved, or can only be planted with native woodlands, without drainage and things like that. So that's on one hand, and then on the other hand, in this particular year, farmers, you know, a particular have got very good prices for their cultural problems, such as the cattle prices, and, you know, particularly the wingland trade and all that, and beef prices are way up from where they were. So, you know, I It's farmers are going well, you know, going to pay more. They're certainly going to be less willing to put that land into forestry if they can make a decent return from farming, you know. And less and less land is has been approved, and less of it is coming on the market for that reason, you know. So farmers, you know, wouldn't be inclined to, after having a good year, wouldn't be inclined to say, Well, no, I'll plant that the best of land, you know. And if they might plant the areas that they might consider planting the areas and that that the that they want to plant. But then when they'd, when they'd actually goes to prove get it approved. I find that, well, there was talking to somebody in the Air Force Station, and they said about a they have to nearly turn away about 80% of their clients, because they tell them, when they look at their maps and look at the where the land is, to say, well, you you won't get approval, or it's not worth their while trying to get approval for you. You know, for 10 acres of low lying ground, maybe. And even though it's productive and would grow from great crops on it the Department of wisdom or have decided that the theory shouldn't be planted, you know. And I think myself, these these schemes, this garden scheme, is counterproductive because, you know, whereas if it went into forestry in some shape or form, it will be very good for the environment. And in my opinion, any tree is better than no tree. And once the farmers say, Well, okay, I plant those 10 acres, but I'll make it. I'll have a go at reclaiming that land that you told me I couldn't plant, and they're going to drain it, they're going to plow it and reseed it and fertilize it and thrive it as much as they can to get some production out of it. For everything. First, it may be fertilized once, and there's been, it's been locked in there for 3040, 3040, years without any further drainage. So to my opinion, it's a, it's a counterproductive, you know, it's supposed to be good for the environment, but the whole totality, of it needs to be looked at, you know?

Dermot McNally 39:44
Yeah, so Paul, Just following on from what you're saying. We're talking here about screening for different environmental areas. And so before a forestry company will go out to look at, look at a piece of farmland for potential after. Four application they maybe will screen out many of them as simply unsuitable on the basis of what the department are telling them, surely that has a devaluation effect on that farmland that it's no longer eligible. It won't it will never be in the market at the forestry prices. So it it only will serve a local farmer has that pushed some of that marginal land, the value of it downwards, or held it, held it at a level?

Paul Lafferty 40:31
Yes, it probably would. I suppose, yes, it definitely is. But I suppose that it's not really coming to a parent in the market. I suppose because farmers are, you know, are happy to buy it at those prices, because they're still getting a decent return, as I said, because just just in this particular year, cultural prices are up. So, so it's, but yes, if the two go down yet, like, if land can't be approved, it's, you know, a certain name, it's certainly low, gets low value, you know. And if it can be farmed, well, it has a certain value. And if you get a read entitlements and all those schemes, and if you can get any two acres and that it's it's worth something, you know, so it, it put us straight for a forestry value. Yes, it would pull the forestry investors and individuals out, out of the market, and leave it to the local, the local market then, like, you know, but certainly has a devalued effect on it if, like, all land prices are that it's, it's what can be returned from them. So in respect, we have, you know, quite a, quite a support and agricultural price in Ireland because of all the area's entitled, forestry premiums, the acres, all these schemes, you know, they support the price of land. You know, yeah,

Dermot McNally 41:38
Paul, just then, to finish off, have Do you see any opportunities or trends that are coming down the line that forest owners or land owners should be aware of? Things that seem to be gaining in importance? The whole

Paul Lafferty 41:53
biodiversity side of it is it seems to be big, you know, and different. I guess I mentioned, area continuous forestry cover and that, and agroforestry as well. We hear people on the radio talking about a great new machine that can fix carbon and, you know, and it's going to do this and this and the other like, and, you know, you just plant a tree, and it fixes as much carbon as practically, all year round. The way, we have growth all year round. You know, the model website there, and we have a section where we'll be talking about carbon credits on it, and see, you know, so basically, as far as I understand, somebody with a plantation growing and the, you know, it's fixing carbon, and they may be able to get some payment for them, but it's, it's an, it's an interesting topic that's probably going to increase in the future as well. You know,

Dermot McNally 42:41
brilliant, brilliant. Okay, well, listen, Paul, thanks very much for joining me. It's great to talk to you. Thanks, Jervis, that's it for this podcast. Feel free to comment or subscribe for more episodes.

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