Senior Growers Meeting – 24 February, 2015

A discussion paper was circulated in September 2014 concerning the opportunity to establish a growers’ data series.

FWPA has been progressing a similar data aggregation program with the softwood and hardwood processors. The softwood data series is well established with 13 companies now participating providing over 90% coverage of monthly sales. The hardwood data series is also underway with 10 companies involved. It is expected this will be launched in April/May with 2 years of historic volume and weighted average price data covering near 50% of monthly sales.

In terms of forest information the most comprehensive data available is produced by ABARES as part of the Australian Forest and Wood Product Statistics. The most recent release in November 2014 contained data on harvesting activity for the period ending June 2013.

The establishment of a growers’ data series will provide an opportunity to greatly improve the timeliness and accuracy of the information available on forest activities.

Following the circulation of the paper consultation has been undertaken with most growers to discuss level of interest and clarify the type of information that could be collected. Further discussions have taken place at the recent senior growers meeting where several issues were raised. These are detailed below with the resultant follow up actions:

A legal question was raised regarding the potential for past prices to reflect future prices in situations where sales are governed by long term contracts.

Legal advice has been received from Mallesons indicating that the process of aggregating prices to produce a weighted average price should ensure any past prices are sufficiently opaque so as to not inform future prices. However, it was noted that in situations where only 2 companies were contributing data there may be an opportunity to identify individual prices. We have therefore arranged for the Protocol Agreement governing the data aggregation program to be amended by broadening clause 8 to ensure aggregated data is only disseminated where 3 or more companies have contributed.

Log Grades
It was suggested that the log grades may benefit from further refinement.

Suggestions to further simplify the softwood log grades with the amalgamation of export grades have been received and incorporated.

Given the sensitivity of the data it was critical that individual transactions not be identifiable.

The sensitivity is noted and understood and the on-line is designed to provide the necessary protections.

Gross Value of Production (GVP)
To reduce the compliance burden on organisations it would be important to integrate any activity with ABARES annual GVP survey.

The GVP survey requires information on; Royalty, Harvesting, Haulage and Delivered Prices by a range of log categories. Discussions with ABARES have confirmed that they use volume and delivered prices to calculate the GVP. Or in situations where delivered prices are not available they use volume, royalty, harvest and haulage to calculate GVP. In addition, ABARES have confirmed that they can work with average harvest and haulage prices provided they have the volume and delivered prices for a defined log category. Consequently, the growers data series could be structured to ensure that quarterly data could be readily combined to satisfy ABARES’ annual requirements.

Now that these matters have been clarified the next step is to implement the directions from the meeting to proceed with a growers data series which focuses on volume with a quarterly time period and integrates with ABARES GVP survey.

Whilst this may appear a simple instruction the reality is that integration with the GVP survey would require the provision of data in addition to volume. It should also be noted that a number of companies were also interested in aggregating performance benchmarking data for harvest, haulage and establishment.

Data aggregation levels
To accommodate all of the different views it may be we simply create a flexible system where data can be aggregated up to a common level. This would enable each grower to participate at the level suitable for their organisation. The outcomes from this approach would be:

Level 1. Quarterly nationally aggregated volume data set (this would address confidentiality issues and given aggregating data on volume was seen as non-contentious would enable all growers to participate) 

Level 2. Quarterly GVP aggregated data set (this would cover average harvest, average haulage and delivered prices for the agreed log grades for those growers seeking to integrate with the GVP) aggregated data only available to contributing companies with an agreed timeframe for industry/public domain e.g. 6 monthly.

Level 3. Performance Benchmarking (this would cover harvest, haulage and establishment for those growers wanting to provide more detailed information) weighted average data only available to contributing companies with an agreed timeframe for industry/public domain e.g. 12 monthly.

Next Steps
Growers were asked to consider the above information and advise the level (Level 1, 2, 3) at which their company may wish to participate in the growers data series.