VARDAMAN VIRTUAL FORESTRY COMPANY

THE VITAL ROLE OF PTAEDA2V IN ESTABLISHING NEW LOBLOLLY PINE PLANTATIONS

No forestry operation is more important than establishing a new plantation.  Improper procedure often causes heavy mortality from spring droughts that could have been avoided.  Some plantations develop so slowly that they never produce an adequate return on invested capital; others produce superb investments.  Some landowners employ cultural techniques that haven’t a chance of producing a return, whereas others lose the whole game by trying to save at few pennies at the outset.

Furthermore, the right combination of practices is unique for each tract, because each tract has a unique set of conditions that affect its productivity.  What works on one owner’s tract may not work on another’s.  Therefore, one of the worst places to select techniques is a discussion forum like ours.  Its participants gain their ideas in operations from Virginia to Texas where climate, soils, and prices are quite different.  It’s OK to swap ideas, as long as you stick to those uniquely suited to your tract.  This long tutorial on using PTAEDA2V for those in our Internet Grad School tells how to do that.

Determining Site Index, Age 25, or SI-25

The first task is to determine SI-25.  If the site originally contains a stand of trees 25 or more years old, you should measure total height and age of individual trees scattered over the tract.  Determine SI-25 of each by entering SI-25 curves and then averaging SI-25 for the tract as a whole.  If trees on this site have been removed, there may be a stand like them adjacent to it.

The next best solution is the “Soil Survey” for each county published by the Soil Conservation Service.  You can determine the soils on your tract by the excellent maps in the last section.  Most surveys contain the “Woodland Management and Productivity” table that gives SI-50 for each soil.  You can convert these figures to SI-25 by multiplying by .75.  For our present purposes, let’s assume that your SI-25 is 60.

Selecting Techniques to Use in Establishing New Plantations

The purpose of all plantations established by JMV&CO is earning a suitable return on capital.  For the decades before genetic improvement produced results, we merely planted the best woods-run seedlings available and employed techniques that virtually guarantee survival of 85%.  Since we want the seedlings to develop fast enough to produce a thinning at age 12, we planted them 10 feet apart in rows 12 feet apart or 363 per acre.  We shall do so here. 

To illustrate what would develop from these actions using cultural techniques available prior to 1980, we entered these data in PTAEDA2V and predicted that this stand would develop at age 12:

INPUTS Site Index = 60.0 Growing Seasons Completed = 12.0 Planted Trees = 363.0 Percent Hardwood = 4.8

PREDICTED Dominant Height = 35.3 Average DBH = 6.3 Average Height = 34.0 Average Crown Ratio = 54.6

DBH Class	Number Trees	Average Height	Basal Area	Total Volume o.b.	Volume Cords To 4 in.	Volume Doyle bd. ft.
2	1.8	20.1	.1	.8	.0	.0
3	15.4	24.5	.8	12.1	.0	.0
4	24.5	29.1	2.2	34.0	.0	.0
5	57.2	32.2	7.8	126.6	1.0	.0
6	65.3	34.0	12.9	214.3	2.0	.0
7	64.4	35.9	17.1	293.9	2.9	.0
8	58.1	37.2	19.9	350.2	3.5	.0
9	21.8	38.0	9.3	165.3	1.7	.0
Total	308.6		70.1	1197.3	11.2	.0

Growth and quality increases produced by research of the past 20 years have been very large.  In 1988 we convened a meeting of six outstanding scientists, leaders in each important research fields.  They reported on gains in their sectors and then prescribed adjustments in PTAEDA2V inputs to predict them.  We have published a full report on this meeting and their adjustments under the red Pine Plantations button at http://www.vardaman.com/greensheets/1998sale.htm.

To illustrate what enormous effects this research has produced, we entered your stand with its basic SI-25 of 60 with all of today’s adjustments and predicted that this stand would develop at age 12:

INPUTS Site Index = 67.2 Growing Seasons Completed = 12.0 Planted Trees = 363.0 Percent Hardwood = 2.4

PREDICTED Dominant Height = 38.9 Average DBH = 7.1 Average Height = 41.4 Average Crown Ratio = 53.0

DBH Class	Number Trees	Average Height	Basal Area	Total Volume o.b.	Volume Cords To 4 in.	Volume Doyle bd. ft.
2	.9	21.6	.0	.4	.0	.0
3	4.5	27.3	.2	3.5	.0	.0
4	20.9	33.4	1.8	31.2	.0	.0
5	39.9	37.3	5.7	105.1	.8	.0
6	58.1	40.2	11.4	221.6	2.1	.0
7	70.8	41.9	19.0	378.5	3.8	.0
8	64.4	43.3	22.5	457.8	4.6	.0
9	54.5	44.8	23.7	497.0	5.1	.0
10	23.6	46.1	12.5	268.5	.7	359.5
11	4.5	49.8	2.8	65.0	.1	104.0
Total	342.1		99.6	2028.6	17.3	463.5

Since thinnings of less than 5.0 cords are not merchantable, you can see that the old techniques will not produce a thinning as early as age 12; indeed, we showed in First Timberland Investment Fund that the earliest is age 14.

On the other hand, this stand produced by the new techniques will allow the removal of all pulpwood-quality trees plus enough small sawtimber-quality trees to reduce stocking to 185 trees per acre as shown below.

DBH Class	Number Trees	Average Height	Basal Area	Total Volume o.b.	Volume Cords To 4 in.	Volume Doyle bd. ft.
2	.9	21.6	.0	.4	.0	.0
3	4.5	27.3	.2	3.5	.0	.0
4	20.9	33.4	1.8	31.2	.0	.0
5	39.9	37.3	5.7	105.1	.8	.0
6	54.5	40.1	10.6	205.3	1.9	.0
7	14.5	41.9	3.9	78.2	.8	.0
8	8.2	43.2	3.0	60.4	.6	.0
9	6.4	46.3	2.8	61.0	.6	.0
10	6.4	46.7	3.3	72.1	.7	.0
11	.9	50.2	.6	12.9	.1	.0
Total	157.0		31.9	630.0	5.6	.0

Using current stumpage prices, this will produce a cash flow of $109.00 less selling cost of $21.80 = $87.20.

The stand remaining will be:

DBH Class	Number Trees	Average Height	Basal Area	Total Volume o.b.	Volume Cords To 4 in.	Volume Doyle bd. ft.
6	3.6	41.1	.8	16.3	.2	.0
7	56.3	41.9	15.1	300.3	3.0	.0
8	56.3	43.3	19.5	397.4	4.0	.0
9	48.1	44.6	20.9	436.0	4.5	.0
10	17.2	45.8	9.2	196.5	.0	359.5
11	3.6	49.7	2.3	52.1	.0	104.0
Total	185.1		67.7	1398.5	11.7	463.5

If it is fertilized at a cost of $100/acre now, its volume at age 22 will be:

DBH Class	Number Trees	Average Height	Basal Area	Total Volume o.b.	Volume Cords To 4 in.	Volume Doyle bd. ft.
9	20.0	63.6	273.4	2.8	.0	.0
10	39.9	67.0	21.6	671.3	.0	1434.6
11	44.5	69.2	29.3	937.4	.0	2221.3
12	43.6	69.1	34.1	1089.7	.0	2804.4
13	25.4	71.3	23.5	773.5	.0	2199.0
14	9.1	73.0	9.6	321.3	.0	988.0
15	2.7	76.5	3.2	112.6	.0	375.9
Total	185.1		130.5	4179.4	2.8	10023.2

Using current stumpage prices, this will produce a cash flow of $3,142.25 less selling cost of $157.13 = $2,985.12. To establish the plantation, we first ran a 3-in-1 plow on 12-foot centers for $150/A. We planted 363 second-generation, low-density seedlings with a root-collar diameter of 7.0 mm at $56/A. We treated the stand with herbicide during the spring following planting at $57/A. We paid $50/A for supervision of all these activities. This total cost of $313/A plus land value fo $300 = $613/A of initial investment. We treated the stand with herbicide during the second growing season to suppress hardwood sprouts for $80/A. Annual management fees are $1/A.

CASH FLOW ANALYSIS
Plantation Year	Cash Flow	Description
0	-613	Land -$300 + est. cost -$313
1	-81.00	Herbicide -$80 + mgmt. fee -$1
2	-1.00	mgmt. fee
3	-1.00	"
4	-1.00	"
5	-1.00	"
6	-1.00	"
7	-1.00	"
8	-1.00	"
9	-1.00	"
10	-1.00	"
11	-1.00	"
12	-14.00	thin +87.$20 - fert. $100 - mgmt. fee - $1
13	-1.00	"
14	-1.00	"
15	-1.00	"
16	-1.00	"
17	-1.00	"
18	-1.00	"
19	-1.00	"
20	-1.00	"
21	-1.00	"
22	+$3284	harvest + $2985 + land $300 + mgmt.fee -$1

IRR = 7.26%

So far we haven’t mentioned another big plus, insurance against heavy mortality that occurs in the frequent spring and summer droughts. Water is pulled through the soil by gravity, so the soil dries out from the top down. When a hand- or machine-planter inserts an average-size seedling to a depth of only 3-4 inches (or less in an L-root), he virtually signs its death warrant during the first dry weeks. On the other hand, when the soil is loosened by the 3-in-1 plow, large, low-density seedlings with a root-collar diameter of 7.0mm can be easily planted in vertical condition to a depth of 7-8 inches. They grow rapidly both down and to the side and will survive most droughts.

In the article “First Timberland Investment Fund,” where the basic SI-25 was 64.2, the highest IRR we were able to produce with techniques available in 1989 was 5.01%, and this required a rotation of 25 years and some rise in timber prices. Here we selected a basic SI-25 of 60, and with the powerful tools developed over the past 12 years, we were able to produce 7.26% in 22 years without a price increase.

Many tracts in SE U.S., yours included, have a SI-25 of 70, and those that have ever been in agriculture of some sort probably have a SI-25 of 80. A good example of the latter is GA95222SN_, a plantation in Georgia planted in January 1995, with a predicted IRR of 11.41% in 22 years with no timber-price increase. We offered it in one of our Gambler’s Sales early this year, the details of which can be found at http://www.vardaman.com/greensheets/gambler.htm When we withdrew it early this month because about 40% of the annual growth of plantations in SE U.S. occurs in April and 75% is complete by June 1, the estimated IRR was better than 13.00%. December 2000 photos of what this sort of asset looks like are posted on www.se-timbersales.com in Burke County, GA.

If your land has SI-70 or better, we urge you to consider planting it in pines with the latest techniques now so that the plowed ground will be settled by planting time. If it borders a public road and can be logged during the rain of an El Nino, we urge you to “Seize the day” now.