Press release 13.06.2006
The results of a study performed at Metla indicate that, as a rule, the higher the financial return that could be achieved through alternative use of the capital tied up in the forest, the lower the investment that should be made in regeneration. At a low real interest rate, planting and sowing in prepared soil provide the best financial outcome. At a high interest rate, on the contrary, natural regeneration and sowing provide better outcomes.
Soil preparation combined with planting or sowing are the best ways to obtain desired density for a young stand. With natural regeneration the primary development of seedlings is slower, and the number of trees is lower and more scattered. However, the costs of natural regeneration are less than those accrued from planting and sowing.
For natural regeneration of Scots pine (Pinus sylvestris L.), a high seed tree density (100 trees/ha) produces better returns than one of low density (25 trees/ha). The growing stand is denser and the primary development is faster. The high number of seed trees means better growth at the seed tree phase, which further improves the economic outcome. However, expenses caused by seed trees reduce the advantageousness of natural regeneration compared with sowing, especially at high interest rates.
The interest rate influences the relative profitability of regeneration chains.
The chart depicts the means and standard deviations of the maximum net present values (NPV) for 12 alternative regeneration chains. A 50-year-old pine stand was used as the initial state for the calculation; thinnings and regenerations can be made at an optimal time point either by planting or sowing or by natural regeneration.
At a low 1% real interest rate the chains based on soil preparation and artificial regeneration produced the best performance.
Due to the major costs associated with stand establishment, profitability of planting was considerably reduced when the interest rate increased. Natural regeneration provided the best performance at 3% interest rate.
Natural regeneration and sowing produced an equal outcome at 5% interest rate. Differences in performance between different practices were more significant at high interest rates.
One aim of the study was to explore the profitability of stand establishment for Scots pine by combining measurement data from a field experiment in northern Häme to an economic optimization model at stand-level. The effects of 12 different regeneration chains on seedling growth and primary development of the stand were studied in the field experiment. Four regeneration methods were used: planting, sowing, and natural regeneration (100 or 25 seed trees/ha.) Three intensities of soil preparation were used: conventional harrowing, intensive harrowing and no mechanized soil prepation). After ten years from the regeneration cutting, the data on the measured seedling stand were entered as source tree data in a process-based forest growth model used to predict the tree growth development until the end of the rotation period. Cuttings (number, intensity and timing of thinnings and point of final cutting) were optimized for each initial set of seed trees representing the different regeneration chains.
In this study, the situation where regeneration practices are omitted after the final cutting was not included. On the basis of preliminary comparisons, a planned and cost-effective regeneration gives markedly better financial returns on investments than an unmanaged stand at 3% or lower interest rates.
Canadian Journal of Forest Research, Volume 36(5). ISSN 1208-6037. Pages 1179–1189Kari Hyytiäinen, Sakari Ilomäki, Annikki Mäkelä, and Kaarlo Kinnunen. Economic analysis of stand establishment for Scots pine.