Metla Project 3456

Profitability of forestry and economically optimal timber production

Duration: 2007-2010 Keywords: Profitability of forestry, any aged models, even aged models, models on forestry
Research project group: Distinct projects - Forest-based enterprise and business activities

Objectives

This project specifies practical ways to measure the profitability of forestry, analysis the past development of profitability and tries to find ways to increase the profitability applying economic models and methods to timber production. In measuring profitability the essential problem to be solved is to take into account the amount of capital invested to forestry. To increase the profitability we develop economic-ecological models for norway spruce, models that include the dynamics of nutrients in forest soil and models that leave the age structure of the forest a priory open. In addition, we study the implications of the uncertain timber price and uncertain rate of interest on the profitable timber production. The results can be utilized in presenting information on the development of forest profitability, in developing silvicultural recommendations, in planning the joint production of timber and forest conservation services and in optimizing bioenergy production from forests.

Results

Penttinen, M. & Lausti, A. Metsänomistamisen markkinariski [The market risk of forest ownership]. Metsätieteen aikakauskirja [Forestry periodical] 4/2007: 391-395.

Penttinen, M. Portfolio management and the competitiveness of forest ownership. Dissertationes Forestales 43 (second doctoral dissertation of the author).

Hyytiäinen, K. & Penttinen, M. 2008. Applying portfolio optimisation to the harvesting decisions of non-industrial private forest owners. Forest Policy and Economics 10(3): 151-160.

Penttinen, M., Uotila, E. & Hyytiäinen, K. Metsä sijoituksena ja metsänomistaja sijoittajana [Forest as an investment and forest owner as investor]. Posteri [Poster]. Metsätieteen päivä [Day of forest science], Helsinki 5.11.2008. The best poster award of the day of forest science.

Presentation and poster in the Figures For Forests congress:

Presentation IAS/IFRS Accounting and Forest Valuation on Farm Forestry (pdf)
Poster Farm Forestry Accounting – The Finnish application for profitability bookkeeping (pdf)

Working paper 93 of the Finnish Forest Research Institute: Penttinen, M. & Rantala, O. The International Financial Reporting Standards (IFRS) accounting system as applied to forestry (Working paper 93) in cooperation with the business accounting research area of the MTT Agrifood Research Finland.

Produced an article for the practice: Penttinen, M. Metsänomistamisen kannattavuus [Profitability of forest ownership]. Metsäsavo. Metsäkeskus Pohjois-Savon asiakaslehti [Forest Savo. The customer newspaper of the North Savo Forest Centre] 5/2009, s. 12-13

Presentation IAS/IFRS forest accounting and valuation on profitability book-keeping farms (pdf) in Conference IUFRO Unit 4.05.00 Managerial Economics and Accounting

Working paper 141 of the Finnish Forest Research Institute: Penttinen, M: Lausti, A. The competitiveness of forest ownership analysed by various market portfolio proxies

Project leader: Tahvonen, Olli

Other researchers: Heikkinen, Tiina (2009), Hyytiäinen, Kari (2007-08), Linkosalo, Tapio, VA (2009-10), Luiro, Jukka (2008-10), Niinimäki, Sami (2008-10), Penttinen, Markku (2007-09), Perttunen, Jari, VA (2008-09), Viitala, Esa-Jussi, VA (2007-10)

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Updated 24.05.2012
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