Financial rates of return on thinned and unthinned stands, using large-scale forest inventory data in Mississippi and Arkansas, 1977 to 1995This article is part of a larger document. View the larger document here.
Providing landowners and natural resource managers information on financial rates of return (ROR) plays a vital role in providing and promoting forest management. I combined Timber Mart-South stumpage price data with forest inventory data spanning 17 years from the Southern Research Station, Forest Inventory and Analysis work unit for the States of Arkansas and Mississippi. This dataset was used to compute simple and adjusted financial ROR. The study area encompassed 63.4 million acres of which 37.4 million acres were in timberland. A total of 11 325 sample plots, of which 6 416 were classified as forest, made up the initial dataset. The study’s timeframe spanned three decades, with MS surveys conducted in 1977, 1987, and 1994, while AR were in 1978, 1988, and 1995. Of these 6 416 plots, 245 were classified as sapling-seedling sized stands 1977 to 1978, sawtimber size 1994 to 1995, and having no harvesting or disturbance (< 5 percent all live removals or mortality) occurring on them at any time during the survey time span. Another 41 plots where classified as sapling-seedling sized stands in 1977 and had 20 to 50 percent of their all live volume removed during the 1987 to 1988 survey. These 41 plots had no harvesting, mortality, or disturbance during any other forest inventory and were classified as sawtimber size by the mid-1990s. I studied the annual rate of change (both monetary and volume) from the point which harvesting occurred on the thinned stands. Therefore, these preliminary results pertain to changes that occurred between the 1987 to 1988 and 1994 to 1995 surveys. The average annual volume growth of all live trees on the undisturbed plots was 2.2 percent per year, while the 41 thinned stands’ volume growth was 4.6 percent per year. The average real ROR on the undisturbed stands was 15.7 percent per year using a simple financial maturity model, and 8.6 percent per year using an adjusted financial maturity model. The thinned stands grew at a higher rate, as their real rate of value change was 19.9 percent and 10.1 percent per year for the simple and adjusted financial maturity models, respectively. All volume and value change differences between undisturbed and thinned stands proved to be statistically significant. Combining long-term/large-scale forest inventories with price data has the potential to guide landowner decisions by offering insights into forest management dynamics.
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