THE DOLLAR IMPACT OF PLANTING TOO MANY TREES PER ACRE
In attempting to enter into PPICs with two first cousins whose tracts in the
Conservation Reserve Program (CRP) are about 50 miles apart, PPMC failed to trade with one because
it offered $126 per acre per year, but succeeded with the other because it offered $176.
Measurements of plots in the plantations were made by two different JMV&CO managers, and
financial analyses were prepared in a uniform manner as part of the daily flow of such work.
The $176 offer was made by one manager, and the $126 offer was made by another about three weeks
later. Because his offer was $50 smaller than his cousin's, it took the second owner only one
heartbeat to say no. We wouldn't blame him if he thought we were trying to cheat him.
When we became aware of these unusual events, we immediately went back over the
appraisal files and found that both plantations were established under CRP forestry plans and were
identical in SI-25 and hardwood component. The big difference was that the per-acre stands of living
trees were 378 at age 8 in $176 and 611 at age 9 in $126.
We entered the data for each in PTAEDA2V and used it to predict the following
stands at age 12:
| |
$126 Plantation |
$176 Plantation |
| Average Height |
41.8 feet |
44.1 |
| Average DBH |
6.0 inches |
7.5 inches |
| Average Crown Ratio |
47.7 percent |
54.0 percent |
| Trees: DBH |
|
|
| 1 |
11 |
|
| 2 |
6 |
|
| 3 |
29 |
1 |
| 4 |
46 |
12 |
| 5 |
93 |
27 |
| 6 |
171 |
44 |
| 7 |
163 |
100 |
| 8 |
74 |
92 |
| 9 |
11 |
58 |
| 10 |
|
31 |
| 11 |
|
13 |
| Total |
604 |
378 |
We then thinned both to about 165 trees per acre by removing 13.3 cords from $126
and 10.5 cords from $176. The remaining stands held to harvest at age 22 were as follows:
| Average Height |
45.7 feet |
46.4 feet |
| Average DBH |
7.6 inches |
8.7 inches |
| Average Crown Ratio |
53.4 percent |
57.8 percent |
| Trees: DBH |
|
|
| 7 |
92 |
6 |
| 8 |
66 |
81 |
| 9 |
47 |
43 |
| 10 |
|
25 |
| Total |
165 |
165 |
The predicted stands at harvest were as follows:
| Average Height |
74.9 feet |
|
75.3 feet |
| Average DBH |
10.5 inches |
|
11.8 inches |
| Average Crown Ratio |
35.9 percent |
|
39.1 percent |
| Trees: DBH |
No. |
Cords or MBF |
|
No. |
Cords or MBF |
| 9 |
19 |
3.0 |
|
1 |
.2 |
| 10 |
70 |
2.9 |
|
24 |
1.0 |
| 11 |
49 |
2.8 |
|
56 |
3.2 |
| 12 |
23 |
1.7 |
|
43 |
3.3 |
| 13 |
4 |
.04 |
|
23 |
2.2 |
| 14 |
|
|
|
14 |
1.8 |
| 15 |
|
|
|
4 |
0.7 |
| Total |
|
7.8 |
|
|
12.1 |
Since the crown ratios at age 12 were similar, the trees in each stand
maintained almost the same difference in DBH, but what a difference this made. Sawtimber
volume in $176 was 55% larger.
First step in calculating the PPIC offers was to evaluate the timber
sales using identical market prices and selling percentages. In $126 thinning produced
$168 and harvest $2,401; in $176 thinning produced $204 and harvest $4,921. These
differences were almost entirely due to differences in tree size. Because volume depends
on the square of the radius, bigger trees contain much more volume per tree, and their unit
values are also much higher. To calculate the PPIC offer, we used identical timber prices
and discount rates.
Wow! Baseball, tennis, and pool are said to be games of inches. Now you
see that the same is true in making money growing trees. You'll never get trees into the
valuable size classes if you crowd too many on each acre.
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