Economic Returns to Uneven- and
Even-Aged Management of
Southern Bottomland Hardwoods
James Henderson and Brent Frey
Department of Forestry
Mississippi State University
Overview
• Value in hardwood management for timber
and basal area concerns
• Putnam et al. 1960 growth assumptions
• Application of Putnam et al. 1960
– Red Oak, White Oak, Ash, Mixed Hardwood
• Valuation of timber volumes over time
• Returns by species and by growth
assumptions
Overview
m2/ha
44
87
131
175
~ft2/acre
Adapted from:
Oliver, C.D., Burkhardt, E.C., and Skojac, D.A. 2005. The increasing scarcity of red oaks in Mississippi River
floodplain forests: Influence of the residual overstory. Forest Ecology and Management 210: 393-414.
Stocking Guide for Southern
Bottomland Hardwoods
• Goelz (1995) developed a stocking guide
based on Putnam et al. (1960)
• A “B” –line based on Putnam et al. (1960)
suggested residual stocking.
• The assumption is it is safe to thin from 100%
stocking to the B-line.
• A more extreme thinning may degrade the
stand from production of epicormic sprouts.
DFC 60 to
70 BA
target
Basal Area and Log Quality
• Lower basal areas do
not promote self
pruning as well as
higher basal areas.
• Persistent limbs or
epicormic branching
reduces log quality and
future stumpage value.
Basal Area and Log Quality
• FAS/1F Red Oak $1,400
MBF
• #1 Com Red Oak $1,000
MBF
• #2 Com Red Oak $800
MBF
• Estimated high value
lumber yield for each
log grade using the U.S.
Forest Service Log
Grade Rules.
FAS, No. 1 Common and No. 2 Common
• Lumber of less value can result from
maintaining lower basal areas.
FAS/1F Red Oak $1,400 MBF
#1 Com Red Oak $1,000 MBF
#2 Com Red Oak $800 MBF
www.hardwoodreview.com
Mississippi Total Revenues Over Time For
Hardwood Sawtimber and Pulpwood
$200,000,000
$180,000,000
$160,000,000
$140,000,000
$120,000,000
$100,000,000
HDWD ST
HDWD PW
$80,000,000
$60,000,000
$40,000,000
$20,000,000
$0
Methods
Economic Returns to Uneven- and Even-Aged
Management of Southern Bottomland Hardwoods
• Putnam et al. 1960
• Table 6 uneven-aged
stocking and diameter
distribution
• Table 7 even-aged
stocking and diameter
distribution
• Table 9 diameter
growth rates by
species
Economic Returns to Uneven- and Even-Aged
Management of Southern Bottomland Hardwoods
• Table 7. Hypothetical stocking and estimated
development and yields per acre, for wellmanaged even-aged southern hardwood
stands at end of successive growth periods on
average or better sites.
• Table 9. Ten- year average diameter growth
rates for trees free to grow in unmanaged
stands on average bottom-land sites.
Economic Returns to Uneven- and Even-Aged
Management of Southern Bottomland Hardwoods
• Putnam et al. 1960 Tables 7 and 9
• Table 7. Hypothetical stocking and estimated
development and yields per acre, for wellmanaged even-aged southern hardwood
stands at end of successive growth periods on
average or better sites.
• Table 9. Ten- year average diameter growth
rates for trees free to grow in unmanaged
stands on average bottom-land sites.
Putnam et al. 1960 Growth Assumptions
Under the best intensive
management on good
sites, the growth rates for
the individual species
shown in table 9 might
eventually be increased
30 percent.
From Table 9 Putnam et al. 1960
Putnam et al. 1960 Growth Assumptions
Table 9 growth rates by
species and at a 30%
increase for managed
stands applied to Table 7
even-aged stand
development.
From Table 9 Putnam et al. 1960
Putnam et al. 1960 Growth Assumptions
“Time required for regeneration and growth to the 2inch class will vary radically from place to place and
time to time. It may range from 8 to 10 or even 15
years but may be assumed to average 8 to 10 years.”
From Table 9 Putnam et al. 1960
Growth Assumptions by Species
• Three species: Red oak, White oak, and Ash
• Growth to the 2-inch class in 8, 10, 12, and 15
years
• Two species specific growth rates with four
starting ages at the 2” diameter over the
development of the stand.
• 8 possible scenarios for each species
Value in hardwood management for
timber
• Discount rate of 4% applied
• 2” diameter improvement cut – precommercial
thinning
– $111.77 per acre from Cost and Cost Trends for
Forestry Practices in the South (2011)
• TMS 2001 to 2011 for S.E.U.S.
•
•
•
•
•
$19.78 / cord hardwood pulpwood
$323 / mbf,d red oak sawtimber
$298 / mbf,d white oak sawtimber
$261 / mbf,d ash sawtimber
$188 / mbf,d mixed hardwood sawtimber
Product Prices Over Time U.S. South: 01-11 (Source: TMS)
Ash Sawtimber
Red Oak Sawtimber
Hardwood pulpwood
Mixed Hwd Sawtimber
White Oak Sawtimber
450
400
350
300
$/MBF (D) 250
$/Cord 200
150
100
50
4Q2001
2Q2002
4Q2002
2Q2003
4Q2003
2Q2004
4Q2004
2Q2005
4Q2005
2Q2006
4Q2006
2Q2007
4Q2007
2Q2008
4Q2008
2Q2009
4Q2009
2Q2010
4Q2010
2Q2011
0
Valuation of timber volumes over time
• 2” diameter improvement cut –
precommercail thinning
– $111.77 per acre from Cost and Cost Trends for
Forestry Practices in the South
Land Expectation Value
• The LEV formula is:
LEV = [Net Value in Year n] ÷ [(1+i)n – 1]
where:
i = interest rate in decimal percent
n = the rotation age in years
• To use the LEV formula, compound all of the
costs and revenues associated with timber
production to the end of the first rotation or
cutting cycle and subtract costs from revenues to
determine the net value in year n.
Results
Volumes for improvement and regeneration harvests by average diameter and species
indicating age to reach average diameters by growth rate from a starting point of 2
inch average diameter by either age 8, 10, 12, and 15. (Putnam et al (1960) Table 7)
2
Diameter
Improvement cut
Regeneration Cut
Red Oak age
to reach diameter
White Oak age
to reach diameter
Ash age
to reach diameter
ST
PW
ST
PW
Unmanaged
Growth
Rate
Managed
Growth
Rate
Unmanaged
Growth
Rate
Managed
Growth
Rate
Unmanaged
Growth
Rate
Managed
Growth
Rate
bdft
cords
bdft
cords
8
10
12
15
8
10
12
15
8
10
12
15
8
10
12
15
8
10
12
15
8
10
12
15
6
10
5.3
6.5
16.1
19
21
23
26
16
18
20
23
24
26
28
31
21
23
25
28
27
29
31
34
23
25
27
30
23.5
30
32
34
37
25
27
29
32
41
43
45
48
33
35
37
40
46
48
50
53
38
40
42
45
14
18
1705
22
2171
26
2826
30
3132
34
3843
38
42
5050 29500
7
5196 10623 14699 18243 21570 24963 28000 29500
13.8
12.7
18.2
23.2
28.3
33
37
41
40
49
60
68
78
90
103
115
42
51
62
70
80
92
105
117
44
53
64
72
82
94
107
119
47
56
67
75
85
97
110
122
33
40
48
54
61
71
80
90
35
42
50
56
63
73
82
92
37
44
52
58
65
75
84
94
40
47
55
61
68
78
87
97
57
73
88
102
115
130
145
160
59
75
90
104
117
132
147
162
61
77
92
106
119
134
149
164
64
80
95
109
122
137
152
166
46
58
69
80
91
102
114
125
48
60
71
82
93
104
116
127
50
62
73
84
95
106
118
129
53
65
76
87
98
109
121
131
65
83
98
112
126
141
156
171
67
85
100
114
128
143
158
173
69
87
102
116
130
145
160
174
72
90
105
119
133
148
163
177
52
66
77
88
99
111
122
134
54
68
79
90
101
113
124
135
56
70
81
92
103
115
126
137
59
73
84
95
106
118
129
139
Economic returns by average diameter for red oak
assuming 2” diameter at age 8 and +30% growth
Improvement Cut
Regeneration Cut (Final Harvest) Cuts + Final Net FV LEV
Year Inches ST ($)
PW ($) Total Rev ($) ST ($)
PW ($) Total Rev ($) Total Rev ($) ($)
($)
8
2
16
25
0.00
0.00
-111.77
0.00
0.00
0.00
6
10
0.00 104.83
0.00 128.57
104.83
128.57
0.00
0.00
318.46
464.83
318.46
464.83
33
14
0.00 138.46
138.46
1,678.31
272.96
40
18
550.72
0.00
550.72
3,431.23
48
54
22
26
701.23
912.80
0.00
0.00
701.23
912.80
61
30 1,011.64
0.00
71
80
34 1,241.29
38 1,631.15
90
42
0.00
-111.77
-303.25
165.49
396.32
189.57
237.91
1,951.27
2,184.68 2,033.47
767.82
251.21
3,682.44
4,054.30 3,972.81 1,045.20
4,747.78
5,892.49
360.00
458.90
5,107.77
6,351.39
6,030.35 6,258.87 1,123.57
7,975.20 8,695.17 1,188.87
1,011.64
6,967.11
559.77
7,526.88
10,063.49 11,812.32 1,188.31
0.00
0.00
1,241.29
1,631.15
8,063.05
9,044.00
652.74
731.86
8,715.79
9,775.86
12,264.04 16,556.75 1,089.66
14,565.40 22,702.74 1,029.61
0.00
0.00
9,528.50
810.98
10,339.48
206.69
569.66
16,760.17 31,888.92
962.85
Red oak LEVs by growth rate starting at 2" average diam eter age
and indicating optim al rotation age using a 4% discount rate.
1400
LEVs
1200
$1,040.53
1000
<$1,199.87, $881.72>
800
$
600
400
200
0
0
20
40
60
80
100
120
140
Age
2" age 8 M gt.
2" age 10 M gt.
2" age 12 M gt.
2" age 15 M gt.
2" age 8
2" age 10
2" age 12
2" age 15
O ptim al Rotation Age
Mgt. growth diameters 30” at ages of 54*, 63, 65, 68
(exception 2” age 8 line peaks at age 54 with 26” dia)
Unmgt. growth diameters 26” at ages of 68, 70, 72, 75
W hite oak LEVs by growth rate starting at 2" average diam eter age
and indicating optim al rotation age using a 4% discount rate.
500
LEVs
400
$368.13
300
<$419.20, $313.18>
$
200
100
0
0
20
40
60
80
100
120
140
160
180
Age
2" age 8 M gt.
2" age 10 M gt.
2" age 12 M gt.
2" age 15 M gt.
2" age 8
2" age 10
2" age 12
2" age 15
O ptim al Rotation Age
Mgt. growth diameters 22” at ages of 69, 71, 73, 76
Unmgt. growth diameters 18” at ages of 73, 75, 77, 80
Ash LEVs by growth rate starting at 2" average diam eter age
and indicating optim al rotation age using a 4% discount rate.
300
LEVs
250
$227.66
200
<$258.69, $194.19>
$ 150
100
50
0
0
20
40
60
80
100
120
140
160
180
200
A ge
2" age 8 M gt.
2" age 10 M gt.
2" age 12 M gt.
2" age 15 M gt.
2" age 8
2" age 10
2" age 12
2" age 15
O ptim al R otation Age
Mgt. growth diameters 22” at ages of 77, 79, 81, 84
Unmgt. growth diameters 14” at ages of 65, 67, 69, 72
Mixed Hardwood LEVs by growth rate starting at 2" average diam eter age
and indicating optim al rotation age using a 4% discount rate.
350
LEVs
300
$299.84
250
<$334.50, $259.65>
200
$
150
100
50
0
0
20
40
60
80
100
120
140
160
180
Age
2" age 8 M gt.
2" age 10 M gt.
2" age 12 M gt.
2" age 15 M gt.
2" age 8
2" age 10
2" age 12
2" age 15
Optim al Rotation Age
Mgt. growth diameters 22” at ages of 65, 56*, 65, 71
(exception 2” age 10 line peaks at age 56 with 18” dia)
Unmgt. growth diameters 18” at ages of 68, 70, 72, 75
Even-Aged Mgt. Conclusions
• LEV’s on managed sites vary greatly by species
• Financially optimal rotation ages:
– Red oak: $1,040.53, <$1,199.87, $881.72>
– White oak : $368.13, <$419.20, $313.18>
– Ash : $227.66, <$258.69, $194.19>
– Mxd Hwd: $299.84, <$334.50, $259.65>
• If timber income is important then managing
for species and log quality are important.
TABLE 6. Hypothetical stocking and diameter distribution, with estimated development and yield per acre, for wellmanaged uneven-aged southern hardwoods on average or better sites.
After cutting; beginning of new
Midway of cycle; or average stand End of cycle; ready for cutting
Cut
cycle
D.b.h. (inches)
Trees
B.A.
Volume
Trees
B.A.
Volume
Trees
B.A.
Volume
Trees
B.A.
Volume
No.
Sq.ft.
cords
No.
Sq.ft.
cords
No.
Sq.ft.
cords
No.
Sq.ft.
cords
2
26.00
0.58
36.00
0.79
48.00
1.06
22.00
0.48
4
17.20
1.50
0.20
20
1.74
0.30
30
2.61
0.4
12.8
1.11
0.2
6
10.50
2.07
0.40
13
2.55
0.5
15.8
3.1
0.6
5.3
1.03
0.2
8
8.20
2.86
0.60
9.7
3.39
0.7
12.2
4.27
0.9
4
1.41
0.3
10
7.00
3.82
0.80
7.6
4.14
1
9
4.92
1.2
2
1.1
0.4
12
6.50
5.10
1.30
6.8
5.34
1.2
6.6
5.18
1.3
0.1
0.08
TOTAL
75.40
15.93
3.30
93.10
17.95
3.70
121.60
21.14
4.40
46.20
5.21
1.10
Bd.ft. (D)
Bd.ft. (D)
Bd.ft. (D)
Bd.ft. (D)
14
6.00
6.41
312.00
6.2
6.63
322
6
6.41
312
0
0
16
5.30
7.40
503.00
5.6
7.82
532
5.7
7.96
541
0.4
0.56
38
18
4.30
7.60
632.00
5.3
9.37
779
5.6
9.9
823
1.3
2.3
191
20
3.20
6.98
688.00
4.3
9.38
925
5.3
11.56
1139
2.1
4.58
451
22
2.30
6.07
678.00
3.2
8.45
944
4.3
11.35
1268
2
5.28
590
24
1.60
5.03
524.00
2.3
7.23
897
3.2
10.06
1248
1.6
5.03
724
26
1.10
4.06
561.00
1.6
5.9
816
2.3
8.48
1170
1.2
4.42
609
28
0.80
3.42
524.00
1.1
4.7
721
1.6
6.84
1048
0.8
3.42
524
30
0.45
2.21
369.00
0.8
3.93
656
1.1
5.4
902
0.65
3.19
533
32
0.27
1.51
272.00
0.45
2.51
452
0.8
4.49
804
0.53
2.96
532
34
0.11
0.69
139.00
0.27
1.7
329
0.45
2.83
547
0.34
2.14
408
36
0.04
0.28
57.00
0.11
0.78
165
0.27
1.91
392
0.23
1.63
335
38
0.02
0.16
28.00
0.04
0.32
64
0.11
0.95
191
0.1
0.79
163
40
0.02
0.17
34
0.04
0.35
76
0.04
0.35
76
42
0.02
0.19
37
0.02
0.19
37
TOTAL
25.49
51.82 5287.00
31.29
68.89 7636.00
36.79
88.68 10498.00
11.31
36.84 5211.00
ALL TREES
100.89
67.75
124.39
86.84
158.39
109.82
57.51
42.05
The cycle of development illustrated by this tible will usually be completed in about 10 years but may require 8 to 15 years, depending upon site quality.
Additional cordwood volume in tops of saw-log trees, not shown, is equivalent to about one cord per thousand board feet log scale or 40 percent of the
total cubic volume of such trees.
Sawtimber Bd.ft. (D)
Pulpwood Cords
Bd.ft. (D)
5000
12
10
4000
8
3000
6
2000
4
1000
2
0
0
50
75
% Sawtimber
100
Cords
6000
VOLUMES BY PRODUCT GIVEN
LOWER % SAWTIMBER COMPOSITION
Discount rate in decimal form
0.04
Mixed hardwood product prices
Avg PW
Avg ST
$19.78
$187.83
Revenue
Pulpwood
Sawtibmer
Topwood
$
$
$
21.76
978.78
103.07
Cutting Cycle (Year N)
Net Value in Year N
$
15
1,103.61
Land Expectation Value
$
1,377.89
Land Expectation Value
Cutting Cycle
$
1,377.89
Growth Rate
Starting Volume
Revenue
Pulpwood
Sawtibmer
Topwood
Total Value
$
$
$
$
LEV less starting volume vlaue
$
15
4.80%
214.98
65.27
993.06
104.58
1,162.91
D.b.h.
(inches)
Cut
Trees
B.A.
Volume
No.
Sq.ft.
cords
2
22
0.48
4
12.8
1.11
0.2
6
5.3
1.03
0.2
8
4
1.41
0.3
10
2
1.1
0.4
12
0.1
0.08
TOTAL
46.2
5.21
1.1TOTAL
Bd.ft. (D)
14
0
0
16
0.4
0.56
38
18
1.3
2.3
191
20
2.1
4.58
451
22
2
5.28
590
24
1.6
5.03
724
26
1.2
4.42
609
28
30
32
34
36
38
40
42
TOTAL
ALL TREES
Cutting Cycle
15
D.b.h.
(inches)
0.8
0.65
0.53
0.34
0.23
0.1
0.04
0.02
11.31
57.51
3.42
3.19
2.96
2.14
1.63
0.79
0.35
0.19
36.84
42.05
After cutting; beginning of new
cycle
Trees
No.
B.A.
Sq.ft.
Volume
cords
2
4
6
8
10
12
26.00
17.20
10.50
8.20
7.00
6.50
75.40
0.58
1.50
2.07
2.86
3.82
5.10
15.93
14
16
18
20
22
24
26
6.00
5.30
4.30
3.20
2.30
1.60
1.10
0.2
0.4
0.6
0.8
1.3
3.3
Bd.ft. (D)
6.41
312
7.40
503
7.60
632
6.98
688
6.07
678
5.03
524
4.06
561
524
28
533
30
532
32
408
34
335
36
163
38
76
40
37
42
5211TOTAL
ALL TREES
0.80
0.45
0.27
0.11
0.04
0.02
3.42
2.21
1.51
0.69
0.28
0.16
524
369
272
139
57
28
25.49
100.89
51.82
67.75
5287
Discount rate in decimal form
0.04
Mixed hardwood
Avg PW
$19.78
Revenue
Pulpwood
Sawtibmer
Topwood
Avg ST
$187.83
$
$
$
21.76
978.78
103.07
Cutting Cycle (Year N)
Net Value in Year N
$
15
1,103.61
Land Expectation Value
$
1,377.89
Land Expectation Value
$
1,377.89
Growth Rate
Starting Volume
Revenue
Pulpwood
Sawtibmer
Topwood
Total Value
Cutting Cycle
15
4.80%
$
$
$
$
65.27
993.06
104.58
1,162.91
LEV less starting volume vlaue Cutting Cycle
$
214.98
15
After cutting;
Cut
beginning of new
Volume
Volume
cords
cords
TOTAL
1.1 TOTAL
3.3
Bd.ft. (D)
Bd.ft. (D)
TOTAL
5211 TOTAL
5287
Discount rate in decimal form
0.04
Mixed hardwood
Avg PW
$19.78
Revenue
Pulpwood
Sawtibmer
Topwood
Avg ST
$187.83
$
$
$
99.06
734.09
77.31
Cutting Cycle (Year N)
Net Value in Year N
$
15
910.45
Land Expectation Value
$
Land Expectation Value
$
1,136.73
Growth Rate
Starting Volume
Revenue
Pulpwood
Sawtibmer
Topwood
Total Value
1,136.73
Cutting Cycle
15
4.80%
$
$
$
$
143.71
744.79
78.43
966.93
LEV less starting volume vlaue Cutting Cycle
$
169.80
15
After cutting;
Cut
beginning of new
Volume
Volume
cords
cords
TOTAL
5.01 TOTAL
7.27
Bd.ft. (D)
Bd.ft. (D)
TOTAL
3908.25 TOTAL
3965.25
Discount rate in decimal form
0.04
Mixed hardwood
Avg PW
$19.78
Revenue
Pulpwood
Sawtibmer
Topwood
Avg ST
$187.83
$
$
$
176.37
489.39
51.54
Cutting Cycle (Year N)
Net Value in Year N
$
15
717.30
Land Expectation Value
$
895.56
Land Expectation Value
$
895.56
Growth Rate
Starting Volume
Revenue
Pulpwood
Sawtibmer
Topwood
Total Value
Cutting Cycle
15
4.80%
$
$
$
$
222.14
496.53
52.29
770.96
LEV less starting volume vlaue Cutting Cycle
$
124.61
15
After cutting;
Cut
beginning of new
Volume
Volume
cords
cords
TOTAL
8.92 TOTAL
11.23
Bd.ft. (D)
Bd.ft. (D)
TOTAL
2605.5 TOTAL
2643.50
250
LEV FOR UNEVEN- AGED MGT. GIVEN
LOWER % SAWTIMBER COMPOSITION
$214.98
200
$169.80
150
$124.61
$
100
50
0
50
75
% Sawtimber
100
LEV BY SPECIES AND MANAGEMENT TYPE
(
EVEN
AND
UNEVEN
AGED
)
1200
$1,199.87
Even-aged
Uneven-aged
1000
800
$
600
$368.13
400
$299.84
$258.69
$124.61
200
$169.80
$214.98
0
RO
WO
Ash
Mix
UE 50% UE 75% UE 100%
Speices / Mgt. Type
Limitations
• Putnam et al. (1960) does not provide
information on log grade/quality.
• Timber price data also does not account for
log grade/quality.
• Pure species even-aged stands are not likely.
Future Research
• Valuation based on Matney and Shultz (MSU
FWRC) hardwood G&Y model that indicates
log grade/quality with timber volume.
Questions?
Thank You!
Photo from Meadows and Skojac Jr. 2008