CHH tags 9500ha for dairy

By PAM GRAHAM


Carter Holt Harvey has identified 9500ha of its forest estate in the central North Island for conversion to dairy, industry sources say.

The parcel is nearly twice the entire amount of land Carter Holt Harvey has sold for conversion in the past five years and is 2.4 per cent of the company's 400,000ha estate.

A Massey University study says forest land for conversion to dairying sells for between $4500 and $6000 a hectare, suggesting the land could fetch as much as $57 million.

The sources said the land was near Tokoroa in an area where the company has previously sold land for conversion.

Local farmers say developed dairy land in the area sells for as much as $24,000 a hectare.

Carter Holt chief executive Peter Springford is due to update the market today on the progress of a review of its entire forest estate, the largest in the country, when it reports its third-quarter results.

The company processes about half of its harvest itself and aims to determine how much of the estate it needs to keep.

Falling log prices and rising freight rates prompted Carter Holt to write down the value of its forests last year by almost a third to $1.6 billion.

It declined to comment yesterday.

The company is expected to report a $44.25 million net profit in the third quarter, down from $70 million last year, says Reuters.

The decline is mostly because the company has sold its tissue business.

The identification of the block suggests the company is stepping up its land sale programme.

However, most of Carter Holt's estate is best suited to forestry, Jeremy Fleming, the company's forestry chief executive, said in an interview with the Herald last month.

He said the company had sold about 5000ha for conversion to dairying in the past five years.

The estate has a stocked area of 330,000ha spread throughout New Zealand. About 59 per cent is freehold.

Conversion of forestry land is ongoing in the centre of the North Island.

State-owned Landcorp Farming is converting 25,700ha of former Fletcher Challenge forests between Taupo and Reporoa to dairying.

Critics say dairy conversions will increase nitrates in waterways and reduce the country's ability to meet obligations for the global control of damaging emissions.