COMPARATIVE ECONOMIC-ANALYSIS OF 2 MANAGEMENT OPTIONS FOR LOBLOLLY-PINE TIMBER PLANTATIONS

Southern yellow pines constitute approximately 50 percent of all fores ts in the southern United States. In a few years, more than 50 percent of the softwood timber requirements of wood products mills in the sou thern United States will come from pine plantations consisting primari ly of loblolly pine (Pinus taeda L.). Intensive management of such pla ntations has resulted in very impressive growth rates for the first 8 to 12 years. These plantations are often harvested at age 20 for pulpw ood. Alternatively, plantations can be managed to produce quality sawt imber at around age 50. This paper presents the results of a case stud y involving a comparative economic analysis of these two management op tions for loblolly pine plantations. The comparison was made based on the land expectation value (LEV) for each management regime using curr ent market prices and different levels of real discount rates. The res ults indicate that, if the expected rate of return (real) on investmen t is less than 7 percent, managing a given plantation timber stand sim ilar to the one studied for sawtimber production based on a 50-year ro tation is clearly more economically desirable than managing the same s tand for pulpwood production based on a 20-year rotation. In fact, if the price of sawtimber is at least $450 per thousand board feet (Doyle ) and pulpwood is priced at $35 per cord, the superiority of the sawti mber management option still holds at discount rates of 7 and 8 percen t. Evidently, the pulpwood option becomes more attractive at higher di scount rates and/or at relatively lower prices for sawtimber and highe r prices for pulpwood.