Economic Analyses of Wood Chip Mill Expansion in North Carolina: Implications for Nonindustrial Private Forest (NIPF) Management

Abstract

Abstract Potential economic benefits of wood chip mills in North Carolina and likely forest management changes for nonindustrial private forest (NIPF) landowners were analyzed. The net effects of wood chip mills provided a small net stumpage price increase (1.9%) benefit to forest landowners, had very small economic welfare effects on total economic returns to timber producers and consumers (>0.1%), and had a moderate impact on reducing aggregate site preparation costs (11.6%). Discounted cash-flow analyses indicated that wood chip markets would increase returns somewhat more for pine management than for hardwood management, but the much greater sawtimber prices, especially for pines, still would favor long rotations and pine management. These analyses indicate that markets provided by wood chip mills would tend to create more harvest of pulpwood as part of existing harvests or in new timber harvests of small stands, but would not be likely to encourage clearcutting of much more valuable sawtimber stands or large-scale changes in forest management practices.