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Finland’s 2022 Return On Wood Production Exceeded the Average of Previous 10 Years

The real return on Finnish assets in wood production in non-industrial private forests was 6.3% in 2022. Despite high inflation, the rise in wood prices pushed the return above the average of the previous 10 years, as Natural Resources Institute Finland (Luke) reports.

Returns on wood production was 6.3% in 2022 in mainland Finland. The return fell by 5.8 percentage points from the previous year’s high and was one half percentage point below the previous five-year average.

Income from roundwood sales accounted for +3.7 percentage points of returns, and state wood production subsidies accounted for +0.1 percentage points. Stumpage price change accounted for +1.1 percentage points of returns, and the value of net increment of growing stock for +1.7 percentage points. Total costs in wood production reduced the returns by -0.4 percentage points.

By region, the return was highest in South Savo, North Savo and North Karelia (9%) and lowest in Central Ostrobothnia (0.4%).

Net increment of growing stock had a positive impact on returns in every region. This means that the value of trees that grew in forests was higher than the value of trees felled.

The return excluding the change in standing sale prices was 5.0%. This is more than one percentage point higher than 20 years earlier. The main reason for the increase was the rise in the value of the net increment due to the increase in the volume of the stand and the increased share of logs.

In the return calculation, the stumpage value of the assets was Euro 61.5 billion in 2021, rising to Euro 63.3 billion in 2022.

Source : Lesprom Network

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