VARDAMAN VIRTUAL FORESTRY COMPANY

The Most Direct Link to Knowledge Workers in the Southeast Forest Economy

CUTTING CORNERS IN REFORESTATION CUTS PROFITS

Years ago, like many landowners, we thought that the cheapest regeneration was the best, but now we urge landowners to go "whole hog." If we plant for our own account (as in VPPP) or guarantee success of the plantation, we go all-out.

To show you why, we simulated the growth of several stands of trees with our growth-and-yield model, PTAEDA2V, and evaluated each scenario with a analysis of the cash flows for a single 25-year rotation. Our assumptions for all scenarios were as follows:

12 x 10 spacing, 363 hand-planted trees/acre, 25% spacing variation

Thin stand when possible, harvest at age 24, one extra year to log

Loblolly pine SI-25 = 60

South Georgia stumpage prices

No adjustment of prices or costs for inflation

Market value of land alone = $200 per acre

Annual maintenance costs = $2.00 per acre

For a relatively-cheap, commonly-used regeneration effort, we assumed the following per-acre costs:

Minimum herbicide site-prep (10 gallons/acre)	. .. . .. . .	$. 90
Controlled burn	. .. . .. . .	10
1st-gen. seedlings grown at 30/sq. ft. ($34/M)	. .. . .. . .	12
Dibble planting at $0.05 per tree	. .. . .. . .	18
No herbaceous weed control	. .. . .. . .	0
TOTAL	. .. . .. . .	$.130

Added features that we ordinarily use in regeneration and their per-acre costs are as follows:

Optimum herbicide site-prep (20+ gallons per acre)	. . .. . .	$ 112
Controlled burn	. . .. . .	10
2nd-gen. seedlings grown at 15/sq. ft ($50/M)	. . .. . .	18
Shovel planting at $0.13 per tree	. . .. . .	47
Herbaceous weed control after planting	. . .. . .	53
Total	. . .. . .	$ 240

As a result of meeting with our panel of scientific advisors at the 1993 Atlanta seminar, we believe that these cultural treatments will have the following effects:

Minimum herbicide	. . .. .	Reduces hardwood to 4.8% of basal area
Optimum herbicide	. . .. .	Reduces hardwood to 2.4% of basal area
Herbaceous weed control	. . .. .	Gives 2-year upward shift in age
lst-gen. seedlings	. . .. .	Increases SI-25 by 8%; reduces pulpwood-quality to 20%
2nd-gen. seedlings	. . .. .	.Increases SI-25 by 11%; reduces pulpwood-quality to 16%
15/sq. ft. seedlings	. . .. .	Gives 1-year upward shift in age

Next we simulated results with the routine effort, results obtained by adding the other techniques separately, and results from using all of them together. Here is a summary of what we found:

Treatment	Extra Cost of Treatment	Total Capital Investment Land + Regen.	Thin at Age	Thinning Revenue	Harvest Revenue	Real IRR% on Total Investment
Routine		$330	15	$96	$2,462	9.16
Opt. Herb	$23	353	14	98	2,686	9.26
15 / sq. ft. seedlings	35	365	14	97	2,861	9.37
2nd-gen. Seedlings	4	334	14	87	2,701	9.49
Herbaceous control	53	383	13	89	3,184	9.59
"Whole-hog"	110	440	12	96	4,623	10.60

The most important lesson from this exercise is that cultivation of some kind produces a return not only on the regeneration cost, but also on the $200 investment in land (often more than half of the total). Unless the owner makes some effort to start a new crop, net return from land above annual carrying costs is close to zero and may be so long in coming that it can only be captured by a future generation.

The second lesson is that the more intensive the cultivation is, the
higher the return on the total investment is and the sooner the owner
begins to recoup some of his outlay.

The third lesson is that, since each modern technique works in a different way, it has a different impact, which may be more or less powerful than others. Because plantations are natural systems, we cannot measure the exact impact of each technique, but it is clear, for instance, that using second-generation seedlings is very desirable. Still, the biggest plus comes from using all of them together.

One word of caution: Establishing plantations with modern techniques is not a game for amateurs. The whole job must be done right with expert care at each step. For example, total failure will result if the seedlings are allowed to overheat or dry out between lifting in the nursery and planting on the site. If you want both the right prescription and superb guaranteed execution, call us.