VARDAMAN VIRTUAL FORESTRY COMPANY

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

THE HAND THAT ROCKS THE CRADLE OF REGENERATION RULES THE WORLD OF FORESTRY

Before you read this article, please study the interview of Dr. James H. Miller published in the January 1992 issue of JMV&CO's newsletter. It describes in detail the enormous, and insufficiently appreciated, effects of competition on tree growth. You will learn from it that every cultural practice used during regeneration will have a significant impact on yields from the plantation in future years. The effects are not matters of guesswork; they have been amply verified by Dr. Miller's study and those of others.

Dr. Miller's team concentrated on the biology of regeneration and pointed out that no practice has an isolated effect, that all of them work together, and that we cannot know the exact contribution of each one. We at JMV&CO and the scientists who worked with us recognized the difficulty in developing PTAEDA2V. Nevertheless, we must make educated guesses at these separate effects in order to decide whether an individual practice is worth its cost. Perhaps future research will refine our guesses, but at least they have been adopted by Weyerhaeuser Company and us because they are better than any others than we know about. We will now use them to estimate the financial impact of Dr. Miller's findings over a single 25-year rotation.

Ordinarily, the advantages of a given cultural practice are described by showing the increase in return obtained by using it. We will proceed in the opposite manner: first we will show the yield obtainable from the most profitable set of practices and then quantify the effect of cutting a corner here and there. And throughout the process, we will assume that the base land used to support this forest is located in the good timber markets of the south, can be sold for $250 per acre, and has a site index (25 years) of 60. Other common assumptions in the analysis are these: purchase of the land at the start and sale of it one year after the final year of timber growth, annual maintenance cost of $3.00 per acre, 25-year rotation with a thinning at age 15, no change in prices, and use of cash flows to calculate internal rate of return (IRR). Several common plans are discussed below.

A. The most profitable plan calls for site-preparation with herbicides to control both herbaceous and woody vegetation, no disturbance of the surface soil, the use of genetically-superior seedlings selected by family for the site and grown in the nursery bed at no more than 15 per square foot to an average root-collar diameter of five millimeters. In other words, the plantation will get a roaring start with gangbuster super seedlings in bare soil. We estimated total per-acre establishment costs at $175. Our calculation of IRR for this plan gives a result of 7.02%. This means a compound, real return of 7.02% annually on every cent invested, a return equal to that obtainable from many comparable media.

Now let's cut a corner. B. Suppose that, to save money or by mistake we failed to control herbaceous vegetation. This allows development of various weeds that inevitably get their share of the site's water and nutrients and thereby slow the growth of the young pines. The calculated IRR for the scheme is 6.33%.

Let's cut more corners. C. If you switch from gangbuster-size seedlings to the size commonly produced, IRR falls to 5.57%. D. If you eliminate all herbicide use but adopt at least some sort of site-prep, IRR falls to 5.15%. E. Finally, if you use seedlings without genetic improvement (such as are unavoidable in management of natural stands), IRR falls to 4.45%.

These calculations omit one very large factor: the amount of rainfall during the first growing season. When the rainfall pattern is close to normal, survival in all these plans will be adequate. The drier the season is, however, the greater will be the impact of competing vegetation, and as the drought increases, excessive mortality will occur in the order of E, D, C, and B. The only certain plan is A; if you follow our specifications and allow our staff to install the plantation, JMV&CO will guarantee adequate survival. How big is the weather risk? Your guess is as good as ours.

The sample plans analyzed above will fit many tracts across the south, and we feel sure that all of them will produce higher returns than management of natural stands. But the variety of possible regeneration plans is almost endless, and those that you consider should be precisely tailored for your tract and its timber market. If you care about the rate you earn on your savings account or timberland, just beware of those who recommend cheap solutions, saying that one plan is as good as another. Each JMV&CO office has a complete set of computer hardware and software and will be glad to help with your analysis without charge.

The main message of this article is twofold: 1) There is no free lunch in regeneration; every time you cut a corner, you decrease your IRR and increase your risk. And equally inescapable is 2) Your IRR is fixed the day that you implement your regeneration plan; you cannot correct errors by manipulating the stand later.

The hand that rocks the cradle of regeneration rules the world of forestry.