Estimated Financial Returns from 

 Two White Pine Plantations 



Oliver P. Wallace, Sr. 

 Richard D. Hopkins* 



Eastern white pine is found on land with many different soil and 

 moisture conditions (8) even including such extremes as dry rocky 

 ridges and wet sphagnum hogs. Best development, however, is made on 

 moist sandy loam soils or those with a small proportion of clay. White 

 pine poses no special difficulties to establishment on open land. If 

 given a seed supply, it will usually restock sparsely vegetated areas 

 by natural seeding. In the Northeast region the exodus from farm land 

 has frequently been followed by natural restocking of the abandoned 

 land by white pine. State forest nurseries in the Northeast are produc- 

 ing millions of white pine seedlings annually. Many of these seedlings 

 are being planted under all sorts of environmental conditions with little 

 evaluation of the economics involved. Despite years of research, little 

 concrete information is available as to what a plantation on a specific 

 growing site will yield in terms of physical volume, given the stand 

 stocking and a thinning schedule. The long time period required to 

 bring a stand to maturity and changes in personnel, ownership and 

 management, measurement methods and tools, and markets all com- 

 bine to frustrate a clear cut reporting of what a white pine plantation 

 will yield. 



Several factors now present, i.e.. rapidly rising land prices, declin- 

 ing markets for boards, and the near extinction of the box board market 

 make knowledge of investment opportunities highly desirable. There 

 is also a change in the type of people purchasing forest land; their 

 motives for land ownership are based on recreation and aesthetic values. 

 The activity of these people has contributed to higher land prices. 



The return to be expected from white pine plantations is of inter- 

 est to investors and forest managers in the Northeast, throughout the 

 Appalachian range, in sections of the lake state, and in bordering areas 

 of Canada. Private investors are interested in rating white pine planta- 

 tion establishments as compared to other investment opportunities. 



Recently published techniques (9) coupled with serious efforts to 

 determine volume yields now allow preliminary calculations of white 

 pine investment opportunities. This report presents rates of return earn- 

 ed by the establishment and maintenance of two selected white pine 

 plantations under a given set of assumptions. The methods used in this 

 analysis may assist investors in analyzing the investment opportunities 

 available to them when establishing plantations. Estimating future po- 

 tential returns is difficult because financial yields are sensitive to tree 



* Assoriate Professor of Forest Resources and graduate student, Department of 

 Resource Economics, respectively. 



