Resources / Forestry / Cost of production
Forestry · Financial · Breakeven

Cost of production

$34/GMT delivered

Total delivered cost per green metric tonne — harvest, haulage, roading, amortised silviculture and overheads — placing wood on the mill or chip-terminal weighbridge. It is your breakeven, independent of the export price.

Worked example · Delivered cost per green tonne
$34 / GMT Harvest $12 Haulage $9 Silviculture $6 Roading $3 Overheads $4
Delivered cost per green tonne
The benchmark

Delivered blue gum chip cost is dominated by harvest and haulage; total cost to mill or terminal commonly runs $30–45 per green metric tonne depending on cartage distance.

ABARES ↗
What it signals

Because haulage is such a large share, cost of production is highly sensitive to distance to market: a compartment’s profitability can hinge on cartage kilometres as much as on how well it grew. It is the figure that decides which stands are worth harvesting when prices soften.

Data required to calculate
Harvest & haul cost$Silviculture & roading (amortised)$Green tonnes deliveredGMT

Silo pulls each of these from the sources the operation already uses, and keeps the figure current automatically.

How to improve it
01

Site new plantings within economic haul distance of the market.

02

Schedule harvest crews for full utilisation and minimal relocation.

03

Maintain all-weather roading to keep trucks moving year-round.

Questions & answers

What is cost of production?

Total delivered cost per green metric tonne — harvest, haulage, roading, amortised silviculture and overheads — placing wood on the mill or chip-terminal weighbridge. It is your breakeven, independent of the export price.

What data do you need to calculate cost of production?

You need: Harvest & haul cost ($), Silviculture & roading (amortised) ($), Green tonnes delivered (GMT). Silo pulls each of these from the sources the operation already uses and keeps the figure current automatically.

What is a good cost of production benchmark?

Delivered blue gum chip cost is dominated by harvest and haulage; total cost to mill or terminal commonly runs $30–45 per green metric tonne depending on cartage distance.

How do you improve cost of production?

Site new plantings within economic haul distance of the market. Schedule harvest crews for full utilisation and minimal relocation. Maintain all-weather roading to keep trucks moving year-round.

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