VARDAMAN VIRTUAL FORESTRY COMPANY

“My Son Starts College Year After Next, So I Won’t Sell My Timber Until Then”

We hear remarks like this all the time, and they make us want to cry.  The speakers seem to realize that trees grow each year, but also to think that prices never change.  This sets the stage for investment disaster, maybe not as bad as the dot.com bust, but bad enough when you need the money. 

To show how to use PTAEDA2V in managing plantations, we displayed the stand tables at the ends of the last scheduled four years of LA87040MMB among the attachments in its file on www.se-timbersales.com.  The columns headed “Volume” in the four following tables show the predicted per-acre timber volume each year.  Note that, even as young as age 22, annual volume increase in percentage is shrinking.  Anyone who’s thinking about growing stands to age 30 to 35 is smoking the wrong stuff if money-making is his intent.

Then we forecast the financial results of harvesting the stand at ages 19, 20, 21, and 22.  We used estimated stumpage prices based on our June sales each year at McComb, Mississippi and posted under the red “Stumpage Prices” button on www.vardaman.com. Note how important price fluctuations are on the local level.

None of us knows what prices will be in the future.  We’re just fortunate that PTAEDA2V enables us to predict what volumes will be.  But you must recognize that timber prices always change and sometimes change so much that your timber might be worth more today than it will be after it grows another year.  If history repeats itself, the owner of LA87040MMB will get more for his timber at age 21 than he will get by holding it another year.