Operating profit in non-industrial private forest 2019

• In 2019, felling volumes and the price of logs decreased clearly from the peak year of 2018. Even though the operating profit of non-industrial private forestry decreased to EUR 128 per hectare, it still remained high compared with long-term averages.

• The operating profit per hectare decreased 17% from the previous year in real terms. Nevertheless, the operating profit was 4% higher than on average in the past five years and almost 20% higher than the average of the previous ten-year period.

• In Southern Finland, the operating profit was EUR 163 per hectare, showing a decrease of nearly 20% from the previous year in real terms. In Northern Finland, the operating profit was EUR 58 per hectare (-5%). Northern Finland includes the regions of North Ostrobothnia, Kainuu and Lapland. The operating profit fell more clearly in Southern Finland than in Northern Finland, as the impact of logs on earnings is higher. In real terms, the stumpage prices for softwood logs decreased by 8%, while prices of pulpwood remained almost at the level of the previous year.

• Measured by region, the highest hectare-specific operating profit was still achieved in Päijät-Häme (EUR 232 per hectare) and Kanta-Häme (EUR 228 per hectare). In Lapland, the operating profit was EUR 36 per hectare, showing a decrease of only 2% from the previous year. The operating profit decreased the most in Etelä-Savo (-31%) and Kymenlaakso (-24%). In Mainland Finland, the operating profit decreased in all regions, apart from Ostrobothnia where it remained at the previous year’s level. In Åland, the operating profit doubled as a result of increasing felling volumes due to storm damage.

• Earnings of wood production in non-industrial private forestry totalled EUR 2,007 million (EUR 146 per hectare). These earnings include wood sold to forest industries and for energy generation, as well as wood harvested for private use. The earnings comprise gross stumpage earnings that are calculated by multiplying the felling volume by standing sales prices.

• Investments in wood production remained at the previous year’s level at EUR 17 per hectare (EUR 236 million). The amount includes the estimated value of work carried out by forest owners. The total costs of non-industrial private forestry, including the estimated administrative expenses and equivalent, were EUR 22 per hectare (+1%).

• Some investments are funded by state subsidies for non-industrial private forestry.  In 2019, state subsidies were nearly EUR 50 million (EUR 3.6 per hectare), being at the previous year’s level. Due to the lack of suitable silviculture and forest improvement projects, more than EUR 6 million of assigned subsidies remained unused.

• The forest land areas available for wood production in accordance with the National Forest Inventory are used in the calculations.

• The nominal values have been converted into real values using the cost-of-living index

The hectare-specific results available in the database were adjusted on 18 March 2020. The figures have changed since 1990. The information about forest land areas used in the calculations has not included groups of owners whose income and expenses have, however, been included in the calculation of operating profit in non-industrial private forestry. These include limited liability companies whose primary field of business is other than forestry and state forests not managed by Metsähallitus. Forest land areas assigned to wood production have been calculated over the entire time series, while forest land areas were used until 2014. The adjustment in areas reduced hectare-specific income at a national level in 1990–2017 by 1.6–3.0 per cent compared with previous information published in the time series. In addition, areas of non-industrial private forest were added to 2018 information. The hectare-specific operating profit, calculated using the adjusted areas, decreased by 3.3 per cent in 2018.