How does the fall in timber prices affect forestry?
Private forest owners are actively monitoring roundwood prices, as it is clear that for the majority of small and medium-sized owners, it is important to sell timber on the market at a time when prices are sufficiently high, since the next opportunity to sell timber profitably may not arise for decades.
The average forest property size in Latvia is around 10 hectares, and timber extraction from properties of this size is irregular.
The year 2023 is characterised by an atypical fact: compared to 2022, the price of timber has fallen for almost all timber assortments (usually, a significant price drop is only observed for specific assortments or groups of assortments).
The year 2022 is remembered for having an exceptionally high, one might say unprecedented, price level, and looking over a longer period, prices are by no means at their lowest now; however, it must be remembered that forestry costs have also increased.
Forest owners cannot expect a swift return to 'super-high' prices. It is difficult to predict at what level they will stabilise, given the global economic and geopolitical situation.
By the end of 2023, there should be a clearly visible downturn in timber harvesting volumes in private forests, influenced by several factors: the fall in roundwood prices, the emergency situation due to the spruce bark beetle infestation (declared in April, May, and June, and which effectively continued until September—as is known, forestry in coniferous stands was significantly restricted), and the amount of rainfall during the summer.
Planting of young stands in the spring proceeded similarly to previous years, although due to drought, some of this year's and last year's plantings perished or were significantly damaged. We strongly hope that the call for applications for support measures to restore damaged forest stands will be announced in the coming months.
Support would be greatly needed for owners of areas that have perished due to both the drought and the bark beetle infestations. The volume of young stand tending is affected by the noticeable increase in tending costs (up to 1.5–2 times) due to both fuel and labour costs. The volume of young stand tending in private forests correlates with the available funding from the Rural Development Programme.
What is the impact of the emergency situation caused by the spruce bark beetle?
The implemented safety (protective) measures primarily affected the timber flow, considering that timber harvesting in coniferous clearings was restricted for half a year. These events prompted a discussion on what to do in the future if the bark beetle population continues to remain high.
First and foremost, the recommendation from forest entomologists was confirmed: the 'best cure' for beetle-infested stands is complete harvesting, rather than logging individual damaged trees, which only continues to attract beetles and promotes the further spread of the insects.
Extreme weather conditions caused by climate change and the spread of bark beetles are prompting a rethink of spruce stand management models—how correctly we are tending them and what the optimal duration for growing spruce is, especially on peat soils.
The correct decision regarding the numerical values for the diameter of the main felling proved its worth, allowing forest owners to make decisions more efficiently and reduce various potential risks.
What is currently worrying forest owners the most?
The ill-conceived nature conservation system in Latvia and the uncertainty surrounding the introduction of new restrictions.
The continuation of the current situation is unacceptable—namely, new protected areas are being created while compensation remains unfair. It must be remembered that many households in Latvia rely on the ability to manage their family properties and preserve the opportunity to live in the countryside, which, of course, requires income.
The currently set compensation levels may not even cover 1% of the value of a 1-hectare forest stand, causing resentment among landowners towards the state and reinforcing the view that their property is being effectively, if not formally, nationalised!
Nature conservation must be designed as an engaging system where landowners are interested in preserving natural values; agreements must be signed with them, providing for duties and fair compensation for state-imposed restrictions. A voluntary and dynamic nature conservation system should be promoted.
A Latvian woman, a forest owner from Vidzeme, emphasises:
“In a democratic state, private property serves as the foundation for the functioning of businesses, from which, in turn, taxes are paid to the state budget.
Currently, the Latvian state does not provide the necessary healthcare services to its residents free of charge (except for emergency aid and assistance in cases of acute illness for a minimal fee).
Unlike the principles of totalitarian power during the Soviet occupation, where private property was not allowed to exist but free medicine and higher education did, in an independent Latvian state, an individual must be able to provide for themselves using their own funds, including paying for healthcare services. Meanwhile, the state supports the existence of private property and its use for fulfilling one’s own needs and the functioning of the state economy, but it does not provide all of an individual's needs for free, including healthcare. Therefore, a democratic state has no right to nationalise private property without fair compensation!”