Economic Feasibility Analyses 



3513 



contained 250 merchantable trees per acre, about 28.5 cords of pine pulpwood 

 and slightly over 5 cords of hardwood pulpwood. The projected costs and 

 revenues of this sytem are presented in table 28-3. 



Table 28-3. — Costs and revenues of conventional and modified (to incorporate residue 

 baling) harvesting of 3 6 -acre pine-hardwood stand (Stuart et al. 1981) 



Item 



Conventional 



Modified to 



incorporate 



baler 



Costs 



Stumpage costs 



Harvesing costs 



Hauling costs 



Total costs 



Revenues 



Pulpwood (1 ,216 cords) 



Residue 



Total revenues 41 ,538 



Profit 5,825 



* 1,8 11 tons, green- weight basis. 



59,019 



7,327 



Next, yield by the system modified to incorporate the baler was simulated on 

 this same stand. An additional yield of about 50 tons per acre, or about 18 cords, 

 of residues from limbs, tops, and non-merchantable trees could be removed. The 

 projected costs and revenues of the modified system are also presented in table 

 28-3. 



Capitalization for the system modified to incorporate the baler increased 

 investment from $266,838 to $336,838 under the assumption that the baler 

 would cost about $70,000 (table 28-4). With revenue from residue at $9.65/ton 

 (green- weight basis), profit in the system incorporating the bales was $7,327 

 compared to $5,825 for the conventional system. Based on projected annual 

 production of the baler (1 1,404 tons) the authors* conclude that a residue sales 

 price for the baled wood need be only $6.14 per ton, green- weight basis, to yield 

 a 30-percent pre-tax profit on the additional investment required for the baler. 

 Additionally the land owner benefits from having the tract free of residue and 

 ready for regeneration. 



