Harvest Scheduling as a Timber Appraisal Tool

Appraisers often value a forest that contains many different timber stands that can vary due to factors such as age, stocking, species, and site index. Many assumptions are possible on how the various stands will be harvested and what subsequent cash flows might be generated. We describe harvest scheduling methodology that is widely used to obtain the net present value of such a forest under optimal conditions. We illustrate how a popular software package can be used by appraisers to obtain optimal discounted cash flows using harvest scheduling and resulting timber stand values. ChristopherProduction Economics,

Timber Supply Fundamentals for Extension Forestry Professionals

Timber supply is a term forestry professionals often misuse. It is not the same as timber availability. Competing uses for timber, like bioenergy and carbon credits, make a proper definition important. Timber supply has three subsets: biological potential and physical and economic timber supplies. Plus, there is a temporal aspect that creates a relationship between stock and short-run and long-run timber supplies. A change in stock supply automatically triggers a long-run timber supply response in the opposite direction. Timber supply is a complex issue, and this discussion may help Extension professionals educate landowners and avoid mistakes when using the term

Timber Supply Fundamentals for Extension Forestry Professionals

Timber supply is a term forestry professionals often misuse. It is not the same as timber availability. Competing uses for timber, like bioenergy and carbon credits, make a proper definition important. Timber supply has three subsets: biological potential and physical and economic timber supplies. Plus, there is a temporal aspect that creates a relationship between stock and short-run and long-run timber supplies. A change in stock supply automatically triggers a long-run timber supply response in the opposite direction. Timber supply is a complex issue, and this discussion may help Extension professionals educate landowners and avoid mistakes when using the term

What is your “effective” rate of reforestation cost?

If you are considering a reforestation investment, you should be concerned with its effective cost; ,that is, the cost of reforestation after considering interest arid timing of the tax savings and cost-share payments. Effective regeneration costs depend on your interest rate, marginal tax rate, and whether or not you receive assistance from a state or federal cost-share program

State cost-share programs for nonindustrial private forestry investments

Fourteen states provide cost-share assistance for approved forestry practices. Host programs are intended to increase forest productivity. Funding is typically from state appropriations and/or taxes on primary forest products. Cost-share rates range up to 80 percent, but most programs are at the 50 percent level. All programs require an approved forest management program. Eligible practices are generally reforestation, site preparation, and timber stand improvement

FORVAL for Windows: A computer program for forestry investment analysis

FORVAL for Windows is computer software designed to help evaluate timberland and forestry investments from a financial standpoint. It is free and user-friendlyso easy to use that a manual is not required (a Windows Help file is available as part of the program). While professional foresters will find it a valuable tool, it will be equally useful to private forest landowners

A note on after-tax analysis where capitalized costs are depreciated

Forest management often requires relatively long-term and capital intensive investments. Economic analysis of timber management alternatives can therefore be an extremely important aspect of decision-making. Investment analysis techniques are prominent in forest management texts and have also been the subject of many articles in the forestry literature. Any forestry investment analysis involves several important aspects. Topics included in reports by Gunter and Haney (1984) and Bullard et al. (1986), for example, include the treatment of inflation, income taxes, risk, and the choice of an appropriate discount rate. In this article, we focus on a very specific aspect of after-tax investment analysis-the appropriate, after-tax discount· rate where capitalized costs are depreciated. We discuss this aspect in particular because previous forestry texts, reports, and articles have not been explicit in stating that a tax adjusted discount rate is necessary in such cases

Bullish on Forestry Careers

During the next decade, baby boomer-aged foresters, those born from 1946 to 1964, will be retiring in large numbers. This retirement trend is true for all sectors of forestry employment, from state and federal agencies to private firms and industries. Forestry employers in both public and private sectors are clamoring for more graduates, as well as for more diverse graduates, from forestry degree programs. With looming retirements and industry growth, employers can project the number of positions opening, and they are aware that U.S. forestry schools are not producing sufficient graduates to fill the positions

Business aspects of the Mid-South forest economy

Timber resources and related economic activity are substantial in the Mid-South states of Tennessee Alabama Mississippi, Louisiana, and Arkansas. Most of u; are awar~ that timber is an important aspect of our regional economy. We observe many stands of timber and often see it being harvested and transported to shipping points and manuf~cturing facilities. Many, however, do not fully appreoate the absolute size of the Mid-South\u27s forest resources, nor their relative importance to states within the region. The Mid-South forest economy is described in two sections: (1) forest resources in general and (2) timber manufacturing or processing. Value added and employment and wages for Mid-South forest industries are considered in the analysis. These aspects of the forest products industry allow us to compare states within the region, to characterize the Mid-South\u27s position in the national forest economy, and to show the importance of forestry to Mid-South businessmen