AbstractProcessing Australian hardwood plantations into rotary veneer can produce more acceptable marketable product recoveries compared to traditional processing techniques (e.g. sawmilling). Veneers resulting from processing trials from six commercially important Australian hardwood species were dominated by D-grade veneer. Defects such as encased knots, gum pockets, gum veins, surface roughness, splits, bark pockets, and decay impacted the final assigned grade. Four grading scenarios were adopted. The first included a change to the grade limitations for gum pockets and gum veins, while the second investigated the potential impact of effective pruning on grade recovery. Although both scenarios individually had a positive impact on achieving higher face grade veneer qualities, the third and fourth scenarios, which combined both, had a substantial impact, with relative veneer values increasing up to 18.2% using conservative calculations (scenario three) or up to 22.6% (scenario four) where some of the upgraded veneers were further upgraded to A-grade, which attracts superior value. The total change in veneer value was found to depend on the average billet diameter unless defects other than those relating to the scenarios (gum or knots) restricted the benefit of pruning and gum upgrading. This was the case for species prone to high levels of growth stress and related defects.