Corr CPO Estate Agents Ireland

Forestry, a viable investment

It’s not often fully understood here how attractive Ireland is, as a forestry location. Our climate, supportive government policies and not least our soils all contribute, but the real ‘magic’ is revealed in the growth statistics. The growth rates here for our major commercial tree species are the highest in Europe, often showing more than double the annual rate of other ‘traditional’ countries, especially in Scandinavia. This fact, combined with our well developed road network and widely distributed sawmills, means there are really attractive returns for the wise and well informed. This is especially so in an era of historically low bank interest rates for savings.

As a fourth generation forest owner, I have valuable insights and experiences, sharing with my grandfather and latterly my mother both the highs and the lows of all stages in commercial forestry. My great grandfather, Michael O’Connor, emigrated from the village of Leitrim to seek (and find) his fortune in the United States at the turn of the 20th century. On his return, he bought the first of what has become a portfolio of holdings, centred on the upper Shannon and split between Leitrim and Roscommon. My grandfather, Aodogán O’Rahilly saw two complete rotations (from planting to clear felling) and almost lived to see the third get to first thinning stage. He started planting in the 1930’s and began doing significant volumes in the late 1940’s. He continued to do so, at varying levels of intensity, until shortly before his death in May 2000. My mother started planting on her own land in the mid 1950’s and is close to seeing a second complete rotation herself. I started with forestry in my teens, and have been very active for the past two decades. It will likely form a significant part of my future, for as far out as anyone can reasonably plan.

Planning is of course, critical. Many people think that forestry involves having land, planting it and then waiting for 40 years before anything really happens. Nothing could be further from the truth, as your input will be vital at every stage. From the start you must choose the right species, then ensure proper management of the young trees by protecting them from disease and insects. After about 15 years (for Sitka Spruce) you have thinning and other works to monitor and complete, in a timely manner. Many people make the mistake of ignoring other land owners and users, as the temptation is to just leave the forest alone. However, you need to listen and observe what happens in and around your forest. By showing your concern for others, they will help you maintain the forest in top condition. You will find such efforts visibly rewarded by watching a stand of timber grow through it’s various stages. Needless to say you will also be financially rewarded, especially when you partake of good advice.

So, what’s involved? If you start from scratch, the choice of land is critical. Some make the mistake of thinking that trees will grow on anything, which is simply not the case. Generally one should not plant less than about 10 hectares (just under 25 acres) as smaller plots are not attractive for potential purchasers, who need to have scale to justify the expensive equipment they use to clear fell softwoods. Active farmers are a special case, as they plan to extract timber themselves, so can justify smaller plots. However, wise famers will recognise that they may not be quite as ‘active’ when it’s time to harvest the crop. As guide, 10 Hectares (c. 25 acres) should therefore be the minimum you consider.

Many people have made the mistake of planting inaccessible holdings, forgetting that this is a really heavy crop. Commercial softwood trees, fully grown, weigh between 1 and 2 tonnes each. An Irish Oak can weigh up to 15 tonnes, and other species fall in that range. Even with all the foliage and branches removed this means moving many hundred of tonnes of timber off every acre, over the life cycle of the forest. No matter what species you plant, or how you think it will be cropped, you’ll need good road access for the trucks to take the timber away. Using smaller tractor and trailer sets might seem like a good idea now, but it will cost significantly more than loading directly onto the right truck and trailer set, in the forest. 

If you don’t want to plant yourself why not seek an already established forest, many of which come onto the market as the farmer premia begin to run out. This is typically between 15 and 20 years after original planting, where the first thinning is about to be required. The forest may be on the market for a variety of reasons, so seek advice, from both an accredited Forester and an experienced forestry owner.

You should also consider getting a forestry management company involved, especially as the final clear felling approaches. Irish forestry taxes are amongst the lightest in Europe, but there are some considerations which you would be well advised to consider, and there are accountants who provide this service.

We have a pool of investors seeking forestry in all parts of Ireland, and also act for landowners who wish to dispose of already planted lands. Please see our ‘For Sale’ pages for our latest offerings or contact myself if you require advice or information on this truly rewarding subject.

Shane Price