Friday Offcuts – 27 June 2024

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Welcome to this week's edition of Friday Offcuts.

In celebration of Matariki this Friday, we are pleased to release this week's edition of Friday Offcuts a day early. This week, we delve into several significant developments for the wider sector.

A new study from the University of Tasmania reveals that the frequency and intensity of extreme bushfires have more than doubled over the past two decades. We also feature industry responses to the NZ Forestry Minister’s recent announcement of direct support aimed at growing the forestry sector. Additionally, new High Court rulings in New Zealand are providing greater clarity and consistency in environmental regulations for forest growers.

In Australia, investments in wood processing continue to grow, with Forico installing a new generation of log stackers in Tasmania. HIA highlights prefab housing as a viable solution to current housing capacity and affordability challenges.

On the international front, the EU's Deforestation-Free Products Regulation is facing calls for postponement to ensure smoother implementation, reflecting global efforts to curb deforestation. Finally, Finnish company Kelluu is utilising hydrogen-powered airships to monitor forest health and DEMO International, a premier event held every four years, is set to take place in Canada this September.

Read these and more in another packed edition of Friday Offcuts. Enjoy.

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Extreme bushfires increasing in number and intensity

Extreme bushfires have more than doubled in frequency and intensity over the past two decades, according to a global study from the University of Tasmania. Published in the journal Nature Ecology and Evolution, the research reveals that six of the past seven years have been among the most extreme on record for wildfires.

Dr Calum Cunningham, Postdoctoral Research Fellow at the University of Tasmania and lead author of the study, said the findings are alarming. "This study provides concrete evidence of a worrying trend. The intensity and frequency of these bushfires are increasing at an alarming rate, directly linked to the escalating effects of climate change."

Using 21 years of satellite data, the research team, including Professor David Bowman and Dr Grant Williamson, identified intense bushfire events by measuring the combined heat energy from fires each day. 

The study shows that not only have the number of extreme bushfires more than doubled between 2003 and 2023, but the average intensity of the 20 most extreme bushfires each year has more than doubled during this time. "The impact of these extreme events is devastating, not only for natural ecosystems but also for human populations. These fires release significant carbon emissions, threatening to create a vicious cycle that further accelerates global warming," Dr Cunningham said.

The extreme bushfires are increasing fastest in the boreal and temperate conifer forests of North America and Russia. Hotspots of intense bushfires were also recorded in Australia, southern Africa, Mediterranean Europe, and South America.

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Source: University of Tasmania

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FIEA sees growth for forest industry

Forestry Minister Todd McClay's recent announcements on expanding the New Zealand forestry sector have been met with enthusiasm by industry leaders, according to FIEA events director John Stulen. "Our sector already boasts the most carbon- friendly exports and provides significant land-use benefits, all while reducing New Zealand's overall carbon footprint," said Stulen. "It's encouraging to see the government recognising this value and actively supporting our growth."

"Everything we do for industry aligns with the intent of today’s vision from the Minister," said Stulen. “We have just run a very successful Environmental Forestry programme, and in the coming months will deliver Wood Residues, Carbon Forestry, ForestTECH and WoodWorks events. These technology conferences focus on bringing leaders and innovators together with practical foresters, sawmillers and mass timber construction managers for growing the sector’s productivity and output.”

Government’s vision to grow the forestry sector aligns well with FIEA’s events:
  1. Spurring economic growth through jobs and exports; (ForestTECH)
  2. Delivering low emission solutions and products; (Wood Residues)
  3. Supporting land use resilience, adaptation, biodiversity & social benefits; (Wood Residues and Environmental Forestry), and
  4. Providing carbon removals to support climate goals. (Carbon Forestry)
“Our forest and wood technology conferences align very well with today’s specific visions from the Minister,” says Stulen. We work closely with MPI officials,  industry groups and technology providers to help practical people in industry improve their industry out there with boots on the ground.”

For more details on upcoming events see: “Our FIEA technology conference team looks forward to advancing forestry with the continued support of the Ministry for Primary Industries, industry leaders and our innovators and service providers at these well- attended events,” said Stulen.

For over 25 years, FIEA has partnered with industry to bring innovators to the podium to share their successes with their peers. This formula continues to work well with the support of industry, always a strong point. We see great reactions when these practical groups of hard-working people get to share their breakthrough with others who love their work in the forests up and down the country.

Source: FIEA

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New generation of logstackers installed in Tasmanian mills

Forico has purchased two New Generation Wagner L90 Logstackers for its mills in northern Tasmania, the first of the new generation machines to be commissioned in Australia. The two new ‘Wagners’ arrived at Long Reach in the East Tamar and Surrey Hills in Hampshire, Tasmania in May. After assembly and training by the North American manufacturer Allied Systems and specialist cargo handling company Quality Marshalling of New Zealand, the machines were commissioned and put into use in the log-yards in early June. 

Recognising the need to update their fleet, the Forico Board approved the purchase in April, a significant capital expenditure outlay of some A$4.5 million. The machines in use until that time had been purchased in 2015 and had been in service for in excess of 26,000 hours. 

The Wagners are also considerably more fuel efficient and have lower overall maintenance costs compared to front end loader machines used over the same operating period,” said Tim Duncombe, manager at Forico’s Long Reach Mill. 

The New Generation L90s were transported from America by sea and road after a lead time of around 18 months on delivery due to demand for machines and worldwide challenges on the availability of components. Making the journey from Portland to Melbourne, on to the port at Devonport and then on to the mill sites by road, the unique machines would have caused some ‘head scratching’ as they were driven under escort to their final destination, said Mr Duncombe. 

Manager at Forico’s Surrey Hills Mill, Paul Sturzaker, said the operational teams had identified the need for additional handrailing to protect operators exiting the cab, but beyond that the newly designed Wagner unit would significantly improve visibility and handling. 

Forico is the largest private forestry and asset manager in Tasmania, managing 89,000 hectares of plantation forest for wood fibre production, and 77,000 hectares of natural forest for conservation, biodiversity and cultural values. The company operates with the highest levels of global certification in sustainable forest management and is recognised internationally for its work in environmental stewardship and nature-based reporting.

Source & image credit: Forico

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NZ High Court ruling builds confidence in forestry

Forest growers in New Zealand's Canterbury region,  say the High Court’s ruling on sediment discharge and water yield rules provides certainty and consistency in environmental controls for growers across the country. The High Court has determined that the Canterbury Regional Council had not justified a need for more stringent rules in place of those already set out by the National Environmental Standards for Plantation Forestry (NES-PF)

It was highlighted that if councils wish to impose local rules on forestry operations that are more stringent than the national standards, they must follow the process set out in section 32 (4) of the Resource Management Act (RMA).

New Zealand Forest Owners Association (NZFOA) chief executive, Dr Elizabeth Heeg, says the High Court’s decision speaks to the credibility of the NES-PF as a national environmental management tool for forestry. “Forest companies appealed Plan Change 7 (PC7) on the basis that there was a lack of evidence to justify local rules that are more stringent than the NES-PF,” Elizabeth says. “Forestry is one of the few primary sectors with a targeted national environmental standard. This ruling confirms the primacy of that standard compared to local rules.

“Growers now have certainty that the environmental rules set out under the NES-PF (now the National Environmental Standards for Commercial Forestry – NES-CF) are appropriate for use across the country and that councils should exercise considerable care before departing from national standards.

“The decision also ensures forest owners are operating to the same environmental rules throughout New Zealand.”

The outcome stems from an appeal lodged by Canterbury-based forest companies, Rayonier Matariki and Port Blakely Limited, in December 2021 against proposed rule changes set out under Environment Canterbury’s (ECan) PC7. A specific sediment discharge threshold would have been imposed on Canterbury foresters under PC7 that differed from the national standard.

“Forest growers were concerned that the proposed changes created two conflicting sediment discharge standards whereby Canterbury growers would be held to operate to new and higher local standards,” Elizabeth says. “There was no evidence that this approach is required in the Canterbury Region. Growers would also need to apply for costly resource consents if the imposed PC7 sediment discharge threshold were breached.”

The judge also ruled the proposed changes for water yield management relating to new plantings of production forests were lacking in evidence to warrant change from the existing rules. “Under the existing Canterbury Regional Council rules, new production forests in sensitive catchments must comply with rules designed to ensure those forests have a negligible, or less than minor effect, on freshwater flows,” Elizabeth says. “This is a very high standard that forest owners support. There is no evidence that it is not working properly or that more restrictions are needed.”

Overall, the High Court decision sets a precedent; binding councils to the process of dealing with stringency under the NES- CF.

“It should cause regional councils to think carefully about introducing alternative environmental rules at a local level without sufficient evidence about whether they are needed,” Elizabeth says. We hope this outcome will encourage better conversations and consultation between forestry groups, growers and councils in future.”

Source: NZFOA 

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Prefab housing - another key to open affordability lock

The use of prefab and modular construction can help to improve the capacity issues the industry is currently facing, HIA Managing Director, Jocelyn Martin said. Ms Martin was speaking at a government roundtable designed to consider the barriers and opportunities for prefab housing, hosted by Minister Ed Husic, in Melbourne earlier this month.

Participants at the roundtable recognised that there were still a number of barriers preventing prefab and modular construction reaching its potential. 

Addressing gaps in the National Construction Code is critical, as is a clearer understanding of the chain of custody in the manufacturing and building process, financing and business models and insurance,” Ms Martin said. “A better understanding of terminology is also needed. There are many options for construction from modular floor and wall panels through to fully completed homes.

“Often people see prefab and modular as being an inferior housing option, but there are a range of builders doing some beautiful work, producing amazing homes. In addition, the use of modular components has the potential to improve energy efficiency and apply innovative manufacturing techniques,” added Ms Martin.

Participants at the roundtable committed to investigate improvements to contractual terms and financing models and to address the shortcomings of the Code as quickly as possible.

Source & image credit: Housing Industry Association

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Previous Govt to blame for ETS auction failure

The blame for the failure of last week's Emission Trading Scheme auction can be laid squarely at the feet of the Climate Change Commission along with the previous Labour Green Government, reflecting a series of manufactured crises rather than a fundamental issue with the market, according to the Climate Forestry Association (CFA).

The quarterly ETS auction failed to attract any bids, following a partial clearance of units in March – raising NZ$190 million – and the unprecedented failure of all four auctions under Labour/Greens in 2023.

Climate Forestry Association chief executive Andrew Cushen says the continued uncertainty in the market highlights the ongoing impacts of years of meddling by the previous Government.

“What we are seeing play out is a natural response to the regular fiddling with settings, endless reviews and constant changes, which reflected a culture of interference from the Labour Government, the former Minister for Climate Change and the Climate Change Commissioner,” says Andrew Cushen.

“Although participants in the market are understandably gun-shy after so long without any clear direction for the ETS, the auction doesn’t affect the fundamentals. At its heart, the ETS is a market mechanism, and it is designed to deal with short-term issues like the ones we’re seeing.”

“Despite not clearing, that shouldn’t mean we lose faith in what is essentially our most successful – and our one-and-only – tool for meeting our climate commitments and reducing our emissions.”

Andrew Cushen says that the Coalition Government really couldn’t be clearer that it supports the stable, long-term operation of the ETS in its current form. “Last week, at Fieldays, both Forestry Minister Todd McClay and Climate Change Minister Simon Watts restated the Government’s commitment to climate action and recognised that a strong and stable ETS is our most effective tool for achieving our climate targets,” says Andrew Cushen.

“It is widely recognised that the market is currently significantly undervalued. Consistent policy settings and a long-term commitment to stability – like that signalled by the Government – are needed to bring back confidence in the sector and certainty in the market. The Emissions Trading Scheme needs a strong and rising market price. This will enable the local investments in reductions and removals that are essential to meeting New Zealand’s climate targets.”

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Source: Climate Forestry Association via Scoop

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Global packagers call for delay on EU deforestation law

International packaging groups and political actors are urging the European Union to postpone the enforcement deadline of the Deforestation-Free Products Regulation (EUDR). They argue that more time is needed to ensure a smooth implementation of this critical legislation.

The EUDR, enacted in 2023 as part of the Green Deal, aims to eliminate deforestation and forest degradation linked to specific commodities imported or exported within the EU.

While applauding the EU's environmental goals, the American Forest & Paper Association (AF&PA) expresses concerns about "unrealistic" requirements within the EUDR. They believe these create technical hurdles that could disrupt trade between the US and EU.

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Source & image credit: Packaging Insights

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WIDE Trust undergraduate scholarship recipients 2024

The WIDE Trust is proud to announce that earlier this year 51 grants were awarded by the Trust to undergraduate students studying towards careers in either the forestry or wood industries in New Zealand in 2024.

The WIDE Trust awarded a further five grants to students, selected by the School of Forestry at the University of Canterbury, who demonstrate exceptional leadership ability and personal commitment to involvement in community initiatives. These five students, profiled below, were each awarded a $10,000 grant to further their education and contributions to their communities.

Ashan Barr

Ashan has shown remarkable dedication both in and out of the academic arena. He is a second-year student studying a Bachelor of Forest Engineering at the University of Canterbury and has balanced a strong commitment to sports. Off the field, Ashan's leadership roles have included serving as a service prefect, managing the Multicultural Manaaki Centre at his school, and mentoring and tutoring peers and younger students. For his extensive service, especially to the refugee community, Ashan has been recognized with awards, including the Naaz Shah Memorial Trophy.

Manon Bonar

Manon exemplifies a profound commitment to community, sports, and leadership. Over the past three years, Manon has actively participated in a variety of community activities, notably including Run 72 to support men's mental health, aiding students with different learning needs and involvement in university clubs leadership. Manon is a second-year student studying a Bachelor of Forest Engineering.

Rakairoa Joyce

Rakairoa demonstrates a remarkable blend of leadership, community service, and athletic prowess. In high school, she excelled as Head Girl and contributed significantly to several committees, including the Taiohi Tu committee, which promotes Te Reo and organises cultural events. In 2024, Rakairoa is set to further her impact as the Māori and Pasifika Lead on the University of Canterbury Student Volunteer Army Executive and as part of the University of Canterbury Squash Club Executive team. Rakairoa is a second-year student studying a Bachelor of Forest Engineering.

Hollie McKay

Leadership is a strong suit for Hollie, evidenced by her roles in mentoring, coaching, and captaining, which have honed her skills in planning, team management, and empathetic leadership. An Outward Bound scholarship winner, she has demonstrated resilience, self-awareness, and an ability to manage group dynamics effectively. Hollie volunteers with Nelmac and promotes understanding and inclusiveness with Māori culture and the LGBTQIA+ community. Hollie is a first-year student studying a Bachelor of Forest Science.

Millan Jeffcote

In 2023 Millan’s year was marked by deep engagement with both his school's cultural and sports communities. Beyond the classroom, his commitment to community service is exemplified through his mentorship in the Hāpai Rangatahi programme, supporting disengaged youths, and his regular academic support sessions at Cambridge Middle School. These roles highlight his ability to inspire and guide, underpinned by a significant dedication to volunteering, with over 250 hours contributing to his silver SVA award. Millan is a first-year student studying a Bachelor of Forest Science.

Source: WIDE Trust


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Hydrogen powered airships collecting forest data

Kelluu, a Finnish company founded in 2018, offers commercial enterprises and government agencies with data-as-a-service, specialising in monitoring and providing real-time, actionable intelligence on power lines, roads and railways, as well as surveying and monitoring potential environmental issues associated with forest lands and water bodies across Finland – and soon across Central Europe.

Production of processed raw materials from Finland’s forest lands into sawn wood and paper products is a EUR 15 billion a year market, making it one of the nation’s most vital industries. According to the Finnish Forest Centre, more forest lands were lost in 2022 due to spruce bark beetle infestations than ever before in recorded history.

Kelluu is leveraging use of RedEdge-P‘s high resolution, panchromatic imager for early stress detection of forests caused by bark beetle infestation at the green attack stage (when trees are yet to show distinct symptoms observable by the human eye) for the National Land Survey Institute of Finland.

“Equipped with RedEdge-P, our unmanned airships can fly for hours and survey thousands of hectares of forest land in a single mission, pinpointing precise locations of early bark beetle infestation for immediate remediation by forestry management companies” stated Jiri Jormakka, Co-Founder and Chief Operating Officer of Kelluu.

The RedEdge-P is just one of AgEagle’s leading innovations in aerial multispectral sensor technology. A single camera solution which is compatible with a wide array of unmanned aerial systems (“UAS”) ranging from large fixed wing to small multirotor to autopiloted airships, RedEdge-P captures calibrated high-resolution multispectral and RGB imagery with an optimised field of view and capture rate for efficient flights.

This solution seamlessly integrates a high resolution, all-colour imager with synchronised multispectral imagers to enable pixel-aligned outputs at previously unattainable resolution.

The Finnish company is using emission-free, AI-powered autonomous airships to create high-resolution digital twins of the real world and deliver real-time aerial intelligence. They are the northernmost airship factory in the world. This enables them to offer a complete aerial monitoring and data collection ecosystem to their clients as a service.

The Co-Founder and Chief Operating Officer of Kelluu, Jiri Jormakka, will be presenting this year as part of the ForestTECH 2024 series running in Rotorua, New Zealand on the 20-21 November and 26-27 November 2024 in Melbourne, Australia the week after. Programme and event details can be found on the ForestTECH 2024 website.

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NZ/China Monthly Report - June 2024

The indicator arrows have continued to move slightly to the positive in China with daily sales volume levels ahead of expectation. Inventory is dropping and sales prices for Kiwi logs firming slightly. None of this has meant great change in wharf gate prices NZ in June. As a consequence, production across our plantation estate remains subdued with many loggers and trucks parked up.

I have stated in the past how NZ dominates the China softwood log market, but I still hear criticisms of how some believe China plays with us, including gearing prices to manipulate supply. Let me assure you, it is NZ in the driving seat.

Importantly the eastern seaboard of China comprises a plethora of traders of all size and scale. Some own several sawmills and or remanufacturing plants, as well as trade logs, some just trade logs. The market is hugely dynamic with a great vying for position on price and volume. Many companies have been very successful and run multi-billion dollar enterprises, many rise and fall badly, casualties are common place.

“The market” is a multi-faceted place where everyone is on the phone taking the talk and getting market intel. No single company is in charge and despite what some would prefer to believe, there are certainly no Government officials behind the scenes manipulating market actions and reactions.

It is NZ exporters who control the price in China and when they inappropriately push too hard, sawmill owners react by closing the door when the Kiwi sellers want more for the logs than can be generated in sales. I believe this is called Supply Demand 101 in the learning almanacs. We have seen much too often where some Kiwi exporters appear not to understand that dynamic and should really have read the book.

To further emphasise NZ supply dominance, here is a snapshot of the softwood log sector in China as mid-June 2024.

Firstly, daily usage numbers in cubic metres. The top 5 supply countries with the species listed, the most dominant in a large mixture:
  • New Zealand, Radiata pine; 65,000
  • Pacific North West, Hemlock; 6,000
  • Japan, Sugi; 3,500
  • Australia, Radiata pine; 1,500
  • South Africa, Slash pine; 150
NZ Radiata pine is currently running at 85% of softwood daily log usage.

Secondly the inventory. This is the volume of logs sitting on ports waiting for a home, again, as at mid-June, in cubic metres:
  • New Zealand, 3.0mil
  • Pacific North West, 375,000
  • Japan, 160,000
  • Australia, 100,000
  • South Africa, 10,000
NZ Radiata pine is 82% of the softwood log inventory.

Economic activity across China remains subdued and the market mood generally negative. The current consumption levels confirm reasonable levels of constructing and manufacturing activity, with domestic prices stable to slightly weak across key Provinces.

All of this tells us it will be very dangerous to push up on log prices whilst activity is best described as fragile. If Kiwis exporters behave themselves, the fundamentals going into Q3 should remain stable. Thus, the word “if” will likely determine our near-term ability to get back to work.

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Source: Laurie Forestry

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SnapSTAT - BC harvest slows as NZ grows

As the forest harvest from British Columbia has declined since 2006 from 72 to 32 million m3, New Zealand's cut has risen from 20 to 32 million m3.

See more on page 19 here

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North American DEMO International running in September

The Canadian Woodlands Forum (CWF) is excited to announce that registration is now open for its flagship event, DEMO International®, to be held outside the Ottawa/Gatineau area in the beautiful region of Venosta, Quebec, Canada, from September 19-21, 2024.

This world-class event, occurring only every four years, will mark the 14th edition of DEMO International®. Over the course of its 55-year history, DEMO International® has evolved into one of North America’s largest and most unique ‘live, in-woods’ forestry equipment shows.

This year’s host is SBC Cedar (SBC), which operates sawmills in Quebec and New Brunswick. The event will take place on a property in Venosta, located within a 45 minute drive north along the Gatineau River.

Event Highlights:
  • Over $100 Million in Forestry Equipment: See hundreds of state-of- the-art machines and cutting-edge equipment in action.
  • International Exhibits: Discover products and services from world- wide top manufacturers and suppliers in the forestry sector.
  • Large and small scale forestry equipment including forest harvesting, forwarding, biomass, small scale equipment for woodlot management, firewood processors.
  • Exclusive New Product Line Reveals: Be the first to see the latest innovations and product launches in the forestry industry.
  • Live Demonstrations: Experience real-world applications of advanced forestry machinery and techniques.
  • 2024 DEMO International Technical Conference
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Source: DEMO International

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Gottstein Understanding Forest Science Queensland course

Places are still available and an enriching week of learning and networking is on the cards at the upcoming Gottstein Understanding Forest Science course, which kicks off on 28th July 2024 at Mooloolaba, in south-east Queensland.

“By far the best professional development I have done, during many years in the sector, was the bottom line from not one but two participants of the last course held at Coffs Harbour,” said Helen Murray, course director for The Gottstein Trust.

This year is the first time the course has been offered in Queensland.

“We especially encourage all Queensland and northern NSW industry people and associates to take advantage while it’s on their door-step,” said Suzette Weeding, chair of The Gottstein Trust, who will share her extensive experience in a session on forest biodiversity. “There’s no doubt that participants from elsewhere are in for a great experience, seeing the nuances of forests, plantations and forest management at the various sites on the field trips.

“We’re delighted that the Forest Research Institute at the University of the Sunshine Coast is supporting program delivery for the first time,” said Ms Weeding.

There is still time to book and intending participants are encouraged not to delay locking in their place.

Two days of Field trips enable participants get to see a diverse set of industry activities and sites; including a tour of a significant tree nursery, a spotted gum genetics research site, major softwood plantations and a hardwood production site, among other things. 

Further details can be found on the Gottstein Trust website.

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Source: Gottstein Trust

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Buy and Sell

... and one to end the week on… English please

English, please
A golfer is cupping his hand to scoop water from a Highland burn on the St Andrews course.
A greenkeeper shouts: 'Dinnae drink tha waater! Et's foo ae coo's shite an pish!'
The golfer replies: 'My Good fellow, I'm from England. Could you repeat that for me, in English!?'
The keeper replies: 'I said, use two hands - you'll spill less that way!

Preheating the oven
Wife: (on the phone) Did you preheat the oven like I asked"
Husband: 'Yep!'
Wife: 'What temperature?'
Husband : '214'
Wife: (after a slight pause) 'That is the clock!'
Husband: ...
Wife: ...
Husband: '215'

Dinner guests
A wife invited some people to dinner.
At the table, she turned to their six-year-old daughter and said,
'Would you like to say the blessing?'
'I wouldn't know what to say,' the girl replied.
'Just say what you hear Mommy say,' the wife answered.
The daughter bowed her head and said,
'Lord, why on earth did I invite all these people to dinner?'

And on that note, enjoy your weekend. Cheers.

Ken Wilson
Editor, Friday Offcuts
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