Longer-term pricing mechanisms have also provided some certainty to the harvest contractor base, with more consistency around future work programmes.

The good news is that the in-market log inventories in China have reduced again in May by around 150,000cu m to 3.35 Mm3, although uplift from port has also reduced to slightly over 60,000cu m/day, down 10,000cu m/day from April.

There are no surprises with the reduction in uplift, as the Chinese construction sector (or what’s left of it) historically slows during their hot season.

However, this will be met with reduced supply from New Zealand, courtesy of our wet season and lower spot pricing.

The tariff can is still being kicked down the road, and reports are that engagement from China has dwindled in recent weeks.

Where this will land is anyone’s guess, and it’s hard to see any sort of resolution in the short term.

If you look at China with your macro glasses on, there are some interesting stats starting to emerge.

China’s trade surplus surged to a record of $US165 billion ($273.3b) in the first quarter of 2025, up 350% from $US47b for the same period in 2024.

Much of this is thought to be due to the growth of e-commerce and tech, but it does show the economic powerhouse that China has become when compared to a US trade deficit of $US425.5b for the same period.

Save our sheep? At whose expense?

Federated Farmers obviously wanted something to talk about at Fieldays and launched an attack on forestry with, in my opinion, a very misleading “Save our Sheep” campaign.

The Feds and their broken record have pointed to forestry as the reason the sheep flock has reduced from 70 million in 1982 to 25 million today.

This is some pretty brave logic considering the total exotic forested area is still less than it was in 2002, when sheep numbers had already dropped to 38 million.

Maybe, just maybe, it’s not economic to farm sheep in some regions anymore and people are destocking and changing their choice of crop as a result?

Just a thought, why are beef numbers not dropping?

Perhaps beef is a better-value proposition than sheep in those regions?

The campaign may not have read the room well and has raised more than a few eyebrows with farmers who understand the importance of forestry and the Emissions Trading Scheme (ETS) to their farm cashflow and values.

Canterbury farmer Richard Holloway penned an excellent article, which has been published by various media outlets (including BusinessDesk) and provides a very balanced farmer’s view of the issue.

Since the Government introduced restrictions on land use earlier this year (as a result of the Fed’s lobbying), billions have been wiped off farm values nationwide, especially affecting those in marginal areas and those looking towards succession planning.

Let’s be very clear, none of us wants to see farm conversions into permanent carbon sinks; however, the new legislation has made it difficult for those wishing to convert to a timber crop and utilise the ETS as a method of obtaining regular cashflow during the growth cycle.

Speaking of which, NZU prices are creeping up slowly and are now at a two-month high, with current spot prices around $56.50/NZU.

The next government auction is on June 18, and all eyes will be on whether there is a full, partial or any clearance and the effect this will have on the spot market.

There’s nothing to see in domestic markets, which are generally pretty soft.

However, with continued and consistent reductions in the OCR and more favourable lending conditions, there would be some expectation of a rebound in domestic construction.

To add to that, construction costs have eased, with the Cordell Construction Cost Index (CCCI) indicating a 0.3% rise in Q1 2025, which is well below the long-run quarterly average of 1.0%.

So in summary, it’s getting cold and wet, and prices are average – nothing unexpected for the beginning of winter.

Planting has started in most regions and although numbers are down this year, it will still be a sizeable season, which I’m sure Federated Farmers will equate to another 10 million sheep removed from the national flock.

Next, they’ll be blaming the invasion of Ukraine on pine trees.