CONSIDERATIONS IN RANKING TIMBER 

 GROWING OPPORTUNITIES 



Financial calculations ranking timber pro- 

 duction opportunities are rather complex and 

 have no utility unless performed correctly. 

 Certain aspects of these calculations that must 

 be thoroughly understood are discussed in the 

 paragraphs that follow. 



ALL MANAGEMENT MEASURES 



PLANNED SHOULD BE 

 INCLUDED IN THE EVALUATION 



It cannot be emphasized too strongly that 

 the culturing of a crop of trees involves a 

 number of interdependent activities. It is par- 

 ticularly important, therefore, that an evalua- 

 tion used in comparing timber growing oppor- 

 tunities on different areas or pieces of land 

 should include the entire series of treatments 

 to be carried out. The starting point of the 

 series varies. If the evaluation begins with the 

 establishment of stand cutting priorities, a 

 manager wiU want to rank each area on the 

 basis of present worth, considering the exist- 

 ing stand and the cutting treatment, as well as 

 all the treatments indicated to make the most 

 of the opportunity for future timber growing. 

 For example, it may be possible to make a 

 greater contribution to revenue by cutting a 

 low-volume decadent stand on high-quahty 

 land than by cutting a stand with a greater 

 volume on a low-quality site. If the evaluation 

 begins with regeneration, it will be advanta- 

 geous to compare alternative management 

 regimes for the entire growing period for each 

 area, and then to compare areas on the basis of 

 the series of treatments most favorable to 

 each. Frequently, the manager will be inter- 

 ested in comparing the desirability of doing 

 no additional management in a stand or of 

 adding a treatment to the management pro- 

 gram. To do this he must compare both pro- 

 gram levels so that the cost of the manage- 

 ment treatment added can be evaluated in 

 relation to the increase in yield to be expected 

 from the treatment. 



Certainly a critical time for making an 

 evaluation is when a sale is being planned. The 

 analysis made in conjunction with timber sell- 

 ing should indicate first of all the order in 

 which stands should be cut, and then how 

 timber production on the area might proceed. 

 For stands to be cut, the analysis should indi- 

 cate whether future timber production (other 

 than what unaided nature might accomplish) 

 should even be considered. Such questions as 

 these might be asked: How much could be 

 spent on regeneration of a timber stand at the 

 minimum interest rate specified? Could re- 

 generation of any species be accomplished for 

 that amount? 



If timber production is planned, an analysis 

 should be made that considers alternatives of 

 species, silvicultural systems, and treatment 

 combinations to determine the best way to 

 proceed and the rate of return that would re- 

 sult from the best of the alternatives. 



COST MUST BE CONSIDERED 

 DISCRIMINATELY, AND IN RELATION 

 TO THE APPROACH TO MANAGEMENT 



For a useful evaluation, it is important that 

 the cost estimates for treatments planned for a 

 stand be as accurate as possible. Many factors 

 influence the cost of timber growing activities 

 and these may vary considerably from stand to 

 stand. Ranking of stands must begin with a 

 discriminating consideration of costs. (Timber 

 growing costs are discussed in another publi- 

 cation in this series, Research Paper INT-42.) 



The approach to management can have an 

 important bearing on costs. For example, the 

 size of the cutting blocks laid out in sales 

 planning can have as large an effect on future 

 timber growing costs as on the revenues 

 realized in harvesting. As shown in table 2, 

 when stand reestablishment involves slashing, 

 prescribed . burning, and planting, it costs 



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