Operating results for private forestry

The costs in private forestry are structurally higher than the revenue generated. The disparity decreases the larger the area of forest or woodland involved.

Trends

The operating results for private forestry companies, expressed in the ratio of revenue to costs, show that in the 1990s an average of 77% of the costs involved were covered by revenue. For larger companies, with more than 50 hectares of forest or woodland, the figure was 93%.

The income that most forestry enterprises generate from the sale of timber, other forest products and subsidies, is not enough for them to cover their forest maintenance costs.

Average real revenue and costs for private forestry companies were relatively stable during the 1990s. Viewed over a longer period, however, both real revenue and costs have fallen considerably; for companies owning more than 50 hectares of forest or woodland, they did so by some 60 to 70 % overall in the past 25 years.

Scale effects

In the private forestry sector, results are greatly dependent on the area of forest or woodland involved. Per hectare losses are greatest for the smallest companies but from an absolute point of view, the loss for companies with between 100 and 250 hectares is greater. For companies of this size, the effect of smaller losses per hectare is offset by the effect of their having a larger area of forest or woodland available. It is usually only large enterprises with more than 250 hectares that are able to stay out of the red. Such companies have lower overheads and their revenue from timber is somewhat higher. (In fact, only 2% of private forestry companies own more than 250 hectares of forest or woodland.)