A forest industry and wood availability survey released on Friday revealed the Otago and Southland forest harvest could increase from about 1.5 million cu m to between 2.6 and 2.8 million cu m by the early 2020s, with most of that increase coming from small-forest owners.
The Ministry of Agriculture and Forestry and Southern Wood Council, undertaking a joint project, warned issues such as price would dictate the actual harvest, but local authorities would need to look at infrastructure, such as roading, as blocks to be harvested were small woodlots outside the current areas being logged.
"The actual timing of the harvest from these forests will depend on market conditions and the decisions of a large number of small-scale owners," the report said.
Maf forestry adviser Parnell Trost told a media conference that local authorities had about seven to eight years to start planning before wood harvests could start increasing.
The report also showed new processing investment, especially in Otago, would be needed.
Wenita Forest Products chief executive Roger Hancock said Otago had 60% of the forest resource but just 30% of the processing capability.
The southern region also had the highest percentage of further processed product, with 70% of its log harvest processed in some form.
Soaring fuel costs could curb some inter-regional flow of wood, but he said local authorities and the industry needed to work together to attract new processors.
In recent years, $250 million has been invested in sawmills, a medium density fibreboard plant, and moulding and veneer companies, but more was needed.
The simple fact that the long-touted "wall of wood" was real, would attract the attention of processors and investors, Dr Trost said.
City Forests chief executive Grant Dodson agreed, but said that stable trade conditions would help.
The high exchange rate was hurting all exporters but fluctuations and instability made future planning difficult.
"If I, as a chief executive, want to approach the board with a capital expenditure proposal, I don't know the exchange rate in 10 years' time.
It makes it hard for the board to give its approval."
Mr Dodson said, unlike parts of the North Island, there was very little land use change in the South.
Most forest companies were replanting land that had been harvested.
"There is some [not replanted] but it's hundreds of hectares, not thousands," he said.
Instead of dealing with two or three growers, mills would in the future be dealing with 10 or 12 owners of woodlots 5ha to 20ha in size, Dr Trost said.
"It is quite a different dynamic that both processing companies and local authorities have to deal with."
The southern plantations were a different mix to those nationally.
Only 55% of trees in the South were radiata pine, compared to 90% nationally.
From 2025, the volume of Douglas fir harvested would increase from 100,000cu m at present to more than 400,000cu m.
The volume of hardwood species was also expected to increase sharply, generating opportunities for furniture and other high-value uses.
Almost half the country's Douglas fir and 43% of eucalyptus plantings were in the South.
The 215,700ha forest estate was the youngest in New Zealand.
Half of it had been planted since 1990.
Dr Trost said only Northland and the North Island's East Coast expected comparable increases in forest processing.
Consultancy BERL said forestry represented 6.7% of the South's gross domestic product and accounted for between $180 million and $200 million in exports, a contribution that was expected to increase.
