﻿28 BULLETIN 13, U. S. DEPARTMENT OP AGRICULTURE. 



be held before being cut, the rate of interest, risk, depreciation of 



equipment, and proportion of the time it is in use, competition, etc. 



In general, a profit of 10 per cent over and above all logging costs is 



probably warranted in most regions where there is a fairly continuous 



employment for the sawmill equipment, and this rate of profit has 



boon used in deriving the stumpage values in Table ll. 1 



A 10 per cent profit on an investment in stumpage and logging 



amounts to one-eleventh of the market value of the lumber. 2 For 



second-growth pine lumber at the market values given in Table 8, 



the profit can therefore be obtained by dividing each value by 1 1 . 



The profit per acre will bo based on the average yields per acre given 



in Table 6. At 15, 20, 25, and 30 per cent this is, respectively, 



three-twenty-thirds, one-sixth, one-fifth, and three-thirteenths of the 



market value. 



Stumpage Value. 



Stumpage values per thousand board feet and per acre (based on 

 the board-foot yields in Table 6) are given in Table 11. These were 

 obtained by deducting the logging costs per acre (Table 10) and a 10 

 per cent profit on the combined stumpage and logging investment 

 from the market values per acre given in Table 8. 2 They apply, for 

 each quality, to stands of average yield, provided the market values 

 and logging costs are identical with those used in this bulletin. The 

 yield of individual stands may differ somewhat from the averages 

 given, while the values and costs will, in all likelihood, vary with the 

 locality. Where these are radically different the stumpage value is 

 best found by means of the formula. 



1 The effect on stumpage values of a 20 per cent profit is discussed in Forest Service Bulletin 96, pp. 24-29, 



M 



2 In computing the stumpage values the formula 8= C was used, in which 8= stumpage value 



M= market value, C= logging costs, and P=rate of profit on the combined investment in stumpage and 

 logging. For different rates of profit this reduces to the following forms: 



For a profit of 10 per cent: <S=ry M— C 



20 

 15 per cent: S=^ M—C 



20 per cent: S=— M— C 



4 

 25 per cent: S—-^ M—C 



30 per cent: S=^ M- C 



To determine the stumpage value obtainable, if any desired rate of profit is to be secured, the logging 

 costs should therefore be deducted from the corresponding fraction of the market value. 



