Forest nurseries say they will be forced to dump millions of seedlings this year due to uncertainty over emissions trading.
The Government is reviewing the Emissions Trading Scheme, which became law in September last year.
Nurseries normally grow between 30 and 40 million seedlings a year.
However, an estimated 7 million radiata pine seedlings may have to be dumped mid-year as buyers pull out because of the global funding crisis and uncertainty over the emissions scheme.
Forestry company PF Olsen says seedlings grown to order in expectation of "carbon farming" opportunities now don't have a buyer.
The Forest Nursery Growers Association says the estimate of seven million is probably too low because it is only for radiata pine.
It says nurseries will confirm their winter orders by the end of April, but many farmers and investors are on the verge of pulling out of their contracts.
Meanwhile, forestry nurseries say they are struggling through the deepest downturn they have faced in half a century.
The Forest Owners Association says it is vital nurseries continue so there is the capacity to build the forests in the long term.
It says new forest planting has virtually stopped while investors wait on the sidelines to see what happens to emissions trading.