OPPORTUNITIES FOR INCREASING TIMBER SUPPLIES, 



103 



Costs. — Costs of accelerated practices on the 9 

 million acres with returns in excess of 5 percent at 

 1970-71 prices were estimated at $346 million, 

 or an average of somewhat more than $38 per 

 acre. A major share of this cost was assumed to 

 be provided by public agencies. 



Out-of-pocket costs per unit of increased out- 

 put over the next 50 years, excluding interest on 

 investments, were estimated at about $6 per M 

 board feet. 



Additional harvests. — The estimated additional 

 harvests resulting from intensified practices on 

 9 million acres total nearly 56 billion board feet 

 spread over the next 50 years, or an average of 

 somewhat more than 1.0 billion board feet annually. 

 However, harvest increases are relatively small 

 until year 25 or so, after which harvests increase 

 rapidly. In thefirst two decades somelimited volumes 

 are available from commercial thinning and from 

 removal of softwoods on areas converted to plan- 

 tations. The major portion of increased yields 

 become available after 2 or 3 decades, reaching 

 2.5 billion board feet per year in the fifth decade 

 (fig. 44 and Append. Ill, table 1). This timing 

 reflects the predominance in these figures of 

 reforestation opportunities in the South, and an 

 assumption of short rotations. 



With a one-time intensified 10-year program 

 as assumed in this example, harvest increases 

 rise to a peak then drop off after the fiftieth 

 year. However, it is anticipated that a series of 

 intensified programs would be economically feas- 

 ible in future periods as a result of changing 

 forest conditions following harvesting or other 

 forest disturbances. Thus increases in timber 

 harvests could be maintained or increased over 

 longer periods by such a series of programs, 

 as illustrated later. 



Increased annual harvests of softwood 

 sawtimber on nonindustrial private lands 

 resulting from intensified management of 12.7 

 million acres, by rate of return at 1970 prices 







/ 



2 1/2-5% 



^_y^~- 



1/2%/ 



Harvest schedules shown in figure 44 represent 

 a summation of harvest schedules for individual 

 situations without adjustments for factors such 

 as maintenance of a given flow of timber harvests 

 over time. It was also assumed that the entire 

 acreage listed would be treated over the next 

 decade if funds were available. Areas considered 

 suitable and available for treatment already have 

 been scaled down for economic and ownership 

 reasons, as indicated earlier, but it is of course 

 possible that intensification might have to be 

 spread over a longer period. 



Increased Yields From National Forest Lands 



A similar analysis of opportunities for acceler- 

 ated reforestation and stand improvement on 

 National Forest lands was developed, including 

 evaluations both with and without an "allowable 

 cut effect," that is, an almost immediate increase 

 in harvesting of overmature stands following 

 intensification of management in anticipation of 

 a higher level of timber availability in future 

 years. 4 



Potential increases in harvests resulting from 

 intensified management on western National 

 Forests are shown in table 2 of Appendix III 

 with an allowable cut effect, but calculations of 

 rates of returns were based initially upon harvests 

 from individual treatments without allowable 

 cut effects. This procedure was followed partly 

 because of uncertainties as to allowable cut 

 effects, and partly to have direct comparisons 

 with returns from alternative investments and 

 alternative areas. 5 If allowable cut effects are 

 utilized in the rate of return analysis, returns 

 are increased substantially, as illustrated by 

 the following example: 



Rate of return 



Treatment 



Reforest spruce fir, site 3 



Release mixed conifer, site 3. 



With allow- 

 able cut 

 effect 



7.3 

 21. 6 



Without 

 allowable 

 cut effect 



1.7 

 5.9 



Area treated. — The resulting estimates — that is, 

 calculating rate of return from individual treat- 

 ments without credit for allowable cut effects — 

 indicate that at 1970-71 prices and costs, roughly 

 1.7 million acres of the 4.5 million acres studied in 

 this analysis would produce more than 5 percent 

 return on accelerated investments (Append. Ill, 

 table 2) . If returns were calculated with the allow- 

 able cut effect, most of the 4.5 million acres 



5 15 25 35 



YEAR FROM BEGINNING OF INTENSIFIED MANAGEMENT 



Figure 44 



4 See, for example: Schweitzer, Dennis L., Robert N. 

 Sassaman, and Con H. Schallau. Allowable cut effect — 

 some physical and economic implications. J. of Forestry 

 70(7) : 415-418. 1972. 



6 Haley, David. The economic analysis of activities 

 designed to accelerate stand growth in the context of 

 the managed forest. Paper presented at Western Forestry 

 and Conservation Association. Seattle, Washington. 

 December 6, 1972. 



