Canadian Forest Service Publications

Effects of precommercial thinning on the forest value chain in northwestern New Brunswick: Part 6 - estimating the economic benefits. 2013. Pitt, D.; Lanteigne, L.; Hoepting, M.K.; Plamondon, J.; Duchesne, I.; Bicho, P.; Warren, G. The Forestry Chronicle 89:(4)502-511.

Year: 2013

Issued by: Canadian Wood Fibre Centre

Catalog ID: 35334

Language: English

Availability: PDF (request by e-mail)

Available from the Journal's Web site.
DOI: 10.5558/tfc2013-091

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Abstract

The Green River precommercial thinning (PCT) trials were established between 1959 and 1961 in naturally regenerating balsam fir (Abies balsamea [L.] Mill.)-dominated stands an average of eight years after overstory removal. Following clearcut harvest of three of the study's six replicates in the fall of 2008, the rotation-length effects of PCT and vegetation management (VM; deciduous tree and brush suppression) on the forest value chain were integrated into a spreadsheet-based model that estimates the net present value (NPV) of these silvicultural treatments. Assuming costs and prices near recent values, both PCT and VM were observed to support positive landowner NPVs through discount rates in excess of 6%. At a discount rate of 4% and an age where sawlog production was maximized, PCT and VM offered similar NPV (>$550/ha). Landowners that can attract buyers willing to pay a premium for wood from thinned stands (equal to the sum of reduced operational overhead charges, harvesting and sawmilling costs and increased pulping costs) could see the value of their stands double. Sensitivity analyses revealed that these results are dependent on site productivity, silvicultural costs and a strong premium on sawlog stumpage rates. Depending on economic circumstances, PCT and VM could be attractive investments on high quality sites that are situated in close proximity to wood processing infrastructure.

Plain Language Summary

The economic benefits of precommercial thinning in balsam fir stands of northwestern New Brunswick were assessed. The Green River thinning trials were established between 1959 and 1961 in naturally regenerating balsam fir-dominated stands. In 2008, half of the study replicates were clearcut harvested, allowing evaluation of the rotation-length effects of thinning and vegetation management (deciduous tree and brush suppression) on the forest value chain. From data collected during harvest and subsequent sawmilling and pulping, a predictive model was constructed to estimate the net present value of these silvicultural treatments. The model shows that, depending on economic circumstances, precommercial thinning and vegetation management may be attractive investments on high quality sites that are situated in close proximity to wood processing infrastructure. Financial outcomes were shown to vary with site productivity, silvicultural costs, and the premium on sawlog stumpage rates.