This is the first release of Margules Groome’s biannual harvest and haulage cost index for New Zealand plantation operations (Figure 1). The methodology used is similar to Margules Groome’s approach in Australia where we have published harvest and haulage cost indices for almost a decade. The indices are the sum of different weighted economic indicators. The indicator weightings differ for harvesting and haulage.
Figure 1: New Zealand Harvest & Haulage Cost Index December 2023, Nominal
Sources: Infoshare, MBIE, Margules Groome
The indices have never dipped below 100 over the observation period and have shown on average a steady increase prior to COVID. As of December 2020, prices started to increase rapidly. As can be expected, there is a strong correlation with fuel price changes although this is only one of the indicators used in the indexation. Given the recent inflationary environment, all the index parameters have increased faster compared to the past. It is expected that this trend will start to taper off in 2024/25 to align with historical trends. Inflation in New Zealand was 5.7% in 2023 but is forecast to drop to 3.2% and 2.1% for 2024 and 2025 respectively[1]. The 10‑year average inflation rate from 2011 to 2020 was 1.5%.
Our recent work on this topic covers cost components for harvesting, roading and haulage, however, the cost items can be tailor-made based on your company’s needs. In addition, our cost benchmark data does not only cover New Zealand but also most of the main forestry regions around the world.
For further information and analysis on the indices, and forestry cost benchmarking, contact Margules Groome.
[1] Consensus Economics March 2024