Price of Eucalyptus trees per hectare

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Price of Eucalyptus trees per hectare

Post by admin » Sat Jun 04, 2016 12:27 pm

so I got one for the forum.

Anyone got a current market price on the value of Eucalyptus trees per hectare, acre, or ton in Chile?

Ball park figure is fine. We did some appraisal a few years ago for pine trees on a property, but don't recall the price. What I know about Eucalyptus is it makes terrible firewood and is rather ugly to look at.

So, what happened is I got offered a property with 10 hectares of fairly mature Eucalyptus on it, and another 15 or so hectares of native forest. I am still at the point of doing back of the napkin calculation to see if it is even worth it. If I get any further along with the purchase I'll hire a forestry engineer to go do a proper appraisal.

At first, I was thinking, 'great, that will be fun, I get to pull the stumps on 10 hectares'. Then some quick googling is giving me price ranges of $5,000 - 9,000 U.S. per acre, or on 25 acres that would be about $125,000 - 225,000 U.S. which makes me not so interested in pulling stumps anymore. I even got a calculation from an Indian industry paper that they are getting something like $32,000 an acre in 2015, and were complaining the price had dropped like 30%.

So I'm just trying to get an idea if those numbers hold up in Chile.

Anyone?
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Re: Price of Eucalyptus trees per hectare

Post by frozen-north » Sat Jun 04, 2016 12:58 pm

'Cada hectarea de bosque se vende en $3.200.000'

Actualizado: 25/03/16

Se vende bosque de eucaliptus nitens de 10 años con o sin el terrero.
Son 32 hectareas plantadas con bosque y 24 de solo terrero.
Cada hectarea de bosque se vende en $3.200.000

http://www.bienesonline.cl/ficha-terren ... V45292.php

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Re: Price of Eucalyptus trees per hectare

Post by admin » Sat Jun 04, 2016 1:03 pm

still not bad, at 32 million pesos.

I could not believe the international numbers I was finding. So, I went and surfed around alibaba to see what the Chinese are paying these days for imports from vietnam and australia.

Yea, wood chips are running about $80-100 U.S. per ton, sometimes more. An acre produces something like 400 tons of Eucalyptus, mas o menos, or about $36,000 an acre.

I can now totally see why the native forest are having a hard time competing with that.
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Re: Price of Eucalyptus trees per hectare

Post by HybridAmbassador » Sat Jun 04, 2016 4:03 pm

I detest Eucalyptus trees, have one in my residential property and that dreaded tree sucks up all moisture surrounding it and kills all other vegetation closer by.

Euca trees are great if planted nearby swanpland or terrain containing lots of moisture for paper pulp yielding such as in Uruguay closer to Paraguay river. If planted in el campo may be OK but the tree sheds huge amount of balks from it and spews lots of tree saps in the season. Not suited for home property.
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Re: Price of Eucalyptus trees per hectare

Post by bert.douglas » Sat Jun 04, 2016 10:56 pm

HybridAmbassador wrote:I detest Eucalyptus trees, have one in my residential property and that dreaded tree sucks up all moisture surrounding it and kills all other vegetation closer by.

Euca trees are great if planted nearby swanpland or terrain containing lots of moisture for paper pulp yielding such as in Uruguay closer to Paraguay river. If planted in el campo may be OK but the tree sheds huge amount of balks from it and spews lots of tree saps in the season. Not suited for home property.
There are several rather different species all known by the name Eucalyptus. We might be talking about different trees.

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Re: Price of Eucalyptus trees per hectare

Post by admin » Sun Jun 05, 2016 10:38 am

bert.douglas wrote:
HybridAmbassador wrote:I detest Eucalyptus trees, have one in my residential property and that dreaded tree sucks up all moisture surrounding it and kills all other vegetation closer by.

Euca trees are great if planted nearby swanpland or terrain containing lots of moisture for paper pulp yielding such as in Uruguay closer to Paraguay river. If planted in el campo may be OK but the tree sheds huge amount of balks from it and spews lots of tree saps in the season. Not suited for home property.
There are several rather different species all known by the name Eucalyptus. We might be talking about different trees.
Yea, I don't like Eucalyptus trees either from a landscaping / environmental perspective. Thus, why I was grumbling about the cost and hassle of getting rid of them. However, this seems to be an industrial / forestry property. Not the sort of area you buy for vacation property, and also in an area where there is sufficient water as to not be a drag on the water table.

As I understand it Eucalyptus gets a bad rap for sucking up water, because they grow so fast. Still, likely not something that should really be grown north of the bio bio river where Chile starts drying out.

People often are surprised by how expensive land is in the South of Chile, considering how few people there is here. Well, the forestry industry is likely what is underwriting the price of land, relative to the population. Even the most worthless land in the south of Chile, is worth at a minimum what can be produced by the forestry industry, and then goes up if it has more general agro / housing / so on value to it. Ironically, keeping that well supported is likely the environmental laws limiting the amount of native forest that can be used for none-native species.
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Re: Price of Eucalyptus trees per hectare

Post by admin » Tue Jun 07, 2016 9:44 pm

Went to see the property last Sunday.

o.k., that is a big no go. This property was pure money pit / dead money.

So, I thought it might be educational to explain why.

Not a single tree on the property, including the "native" forest, is older than 10 years old. Eucalyptus are max 3 years old. All the native forest, had been logged out (I think twice, once about 80-100 years ago, and recently within the last 10 years). In fact, I seen a clearing on the property where it looked like the last kind of old growth tree (about 24 inch diameter, probably 50-60 years old) had been dragged out within the last few months.

Which is more than a bit of a problem because, at least in theory, they have a registered forestry management plan, and can be fined for cutting the native forest. I don't think the current owner even knows it happened, but it is on them to prove they did not do it.

So, here was the deal. I was given this offer, through a family member. The brother to the husband of my wife's aunt, had a good friend, that inherited this property as part of a much larger estate. She just wanted to unload the property. So, she offered it to us for 110 million pesos.

Well, on paper, it ticked all the basic boxes. It looked pretty good. 25 hectares. 110 million pesos. 10 hectares of eucalyptus. From google earth I could count about 10 structures, a small creek, and it was in an area we have been shopping for property for a while now. The going rate in the same area, can run from about 5 to 10 million pesos typically per hectare, for properties of comparable to larger sizes. The guy that died had intentions of building some sort of saw mill, and put about 20 million pesos in to wiring this property with 3 phase electricity for machinery. Not a small thing so far out.

well, it turns out that they owe a payment to the current caretaker, that lives on the property (that is red flag trouble for someone). It is in an area where essentially if you don't have caretaker they will strip the trees in no time (especially if you don't pay the caretaker). It is also in an area, inside a much larger area of southern Chile, that is not going anywhere fast as far as development (sort of development twilight zone). No one is going to build a vacation home there. This property will not be sought after for easy 20 years, if ever, for living space. Long way from civilization. The structures were worth max 30 million pesos, and the largest barn looked like it has collapsed in the last year or two because it was built like crap. A few small cabins, max worth 1-2 million pesos each. Built to be like worker bunk house things.

One of the biggest factors was it was sort of a creek, drainage bottom of several larger neighboring properties. Essentially it was sort of creek bottom, where all the large neighboring properties drain towards it. When things flood, that is where the water goes.

The neighboring property, a large fundo, had a gate with a great big sign saying they record all visitors and had cameras everywhere. They have theft issues from the looks of the amount of money put in to security.

So, I am sure it is worth something to some one. Just not to me. I don't think the banks would even give me the appraisal price to get say a 80 million pesos mortgage on the place, unless the appraiser was completely clueless about the area. banks for the most part don't make those sorts of mistakes in Chile.

Honestly, if they were to give it to me, all I would see is a pile of expenses for about 20 years. There are better deals out there.

The exercise of learning about Eucalyptus trees was perhaps worth the time, but not the property.
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Re: Price of Eucalyptus trees per hectare

Post by Putenio » Tue Jun 07, 2016 10:09 pm

Thanks for sharing admn - informative and useful.
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Re: Price of Eucalyptus trees per hectare

Post by GringoVikingo » Wed Jun 08, 2016 3:32 pm

Most of the eucalyptus in Chile is named globulus, and it's origin is Australia.
1 hectares is normally planted with 2000 trees.
Annual growth in central Chile is about 40 cubic meter.
Its mostly sold in meter roma 2,41mx1mx1m

Ready to pick up here in Bio Bio, the price is 36 000 peso roma meter
Without work the price is 26 000 peso.
1 cubic meter raw eucalyptus have a weight of about 850 kg, dry about the half.

To make eucalyptus to good firewood, it should dry slowly for 2 years, and not be exposed to directly sun.

If you can't do most of the work by yourself, it's little money in forest industry.
Access to the forest with road, and transport distance from the forest to a road to pick up the log is very important.
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Re: Price of Eucalyptus trees per hectare

Post by admin » Thu Jun 09, 2016 9:13 am

yea, my calculations are you need about a 1,000 hectares to be in the game. Considering you have to split your harvest over 6-8 years, to have income every year, nothing for the first 6 years. Machinery and workers to harvest, costs to plant, maintain the property, and so on.

Perhaps workable these days if you can pick up a big property at auction that does not already have native forest on it. You would need to get property at under about 1 million pesos a hectare or even 500,000 pesos a hectare, and that means big properties.

There is a famous story about a logging executive from North America. Came to Chile to find land. Hired a Helicopter for the day. Flew around a big property in the Patagonia, and said, "I'll take it".

They bought the property, 10,000 hectares or some ridiculously sized property. Then they found out that they could not cut the native forest. It became a 'thanks for donating to the environmental preservation of old growth forest in Chile' sort of operation.

The logging industry get's a bad rap, but in Chile they do have a certain market based relationship with the current forestry laws. They keep the land prices of the limited land you can do logging on jacked up, so that the land you can not log tends to also stay jacked up in value. Helps that in the last 20 years or so there is also been a big demand for land by environmentalist to simply preserve the old growth forest (e.g. tompkins and other international NGO's). Now there is carbon tax speculations going on also.

Hey, I just rejected a $200,000+ dollar property primarily because they cut the old growth forest (not the only reason). I have bluntly told way more than one land owner in chile, "you cut your old growth trees, you kill your property value".
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Re: Price of Eucalyptus trees per hectare

Post by mem » Thu Sep 14, 2017 9:37 pm

yes, very interesting. I have been quite surprised at how many "Forestry Engineers" I am coming across. Not poor ones either. At first I figured forestry engineers were something like glorified park rangers, but now I think I am beginning to see the light on why there are so many of them and what they actually do in relation to the wood industry in Chile

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Re: Price of Eucalyptus trees per hectare

Post by Rhodolite » Fri Sep 15, 2017 12:32 am

What are the names of the kind of trees found in Chilean "old growth forests"?

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