Costs &  
 Returns
Benefits of Management

Benefits of Forest Management

Some of you have probably wondered what are the real benefits of forest management--other than the lower tax rates under Chapter 61.  There are no simple answers to this question because each property is different in timber/vegetation types and ownership objectives.  Nevertheless, I hope the attached spreadsheet and the following explanations will give you some relevent information on this subject. 

You've  heard the rationale for thinning forest stands:  improved rates of growth on better quality trees.  But how much faster will a good tree grow after thinning?  Research indicates that the increase in volume growth is 20-30%.  There is also an increase in grade value growth of about the same amount.  See my paper on forest investment considerations.  Combined volume and value growth increases on residual trees can be up to 50%.

Other silvicultural benefits are less amenable to short-term economic analysis.  These would include the quantity and quality of regeneration resulting from well-designed and executed cutting operations in older stands, and the identification and release of future crop trees in sapling and small pole stands.

Forests are like all living things in acquiring bad habits.  If they are not broken of them early, the results can be irreversible.  There isn't much a forester can do to improve the quality of the growing stock in a 60-80 year old forest.  It's set in its ways.  The best that can be done with poor quality older growing stock is to design and implement a regeneration strategy so that the next stand will be better.  Young stands, however, can be thinned and weeded to greatly improve the average quality of the growing stock. 

The difference in annual value growth rates between unmanaged and well-managed forest stands is illustrated in the table below for site index 65 land.  The information in this table is adapted from published reports which are available upon request.  The numbers for the intensive management regime assume that management was started early in the stand's life.

Management

Principal Species

Average bf/Ac/Yr

$/Mbf

$/Ac/Year

No Management

Mixed Softwoods and Hardwoods

300

100

30

Moderate Management

Better Grade  Hardwoods

250

200

50

Intensive Management

High Grade Hard- woods, Pruned Pine

300

300

90

Other benefits from good forest management derive indirectly from the process of thinning and harvesting.  Skid roads can become recreational trails.  Increased sources of browse can improve wildlife habitats.  A well-thought-out forest management plan can include recommendations for improving recreational opportunities and wildlife habitats.  These improvements can significantly enhance the value and marketability of your forest land. 

Recent years have seen the advent of some very sophisticated computer programs for the financial analysis of forest investments.  These programs can provide information on anticipated rates of return, present net worth and other measures of profitability.  They can also be used to evaluate the profitability of competing forest management alternatives.  This information is useful for sound financial planning and for documenting the value of the forest to prospective buyers.

If you already have a forest inventory made during the preparation of a management plan, the inventory data can be entered into a computer program to analyze the future rates of growth of your forest under different scenarios.

Recreational improvements might include forest landscaping in frequently used areas, clearing trees to create views from high points on the land, digging earth ponds and clearing cabin/tent platform sites.  Wildlife habitat improvements might include seeding cleared areas to food-producing groundcovers, planting nut and fruit trees and bushes, releasing mast-producing trees from competition and increasing the diversity of forest habitats on the property.

I use a spreadsheet that summarizes the theoretical economic value of the full range of forest management activities on a given acreage, using average costs and returns for this region.  The spreadsheet can be modified for specific acreages and the quality of the growing stock.