Effects of initial stocking on financial return from young-growth Douglas-fir

Abstract

Understocking of commercial Douglas-fir stands may markedly reduce financial return. The experiment reported herein was designed to study the effects of initial understocking, to analyze them within a financial framework, and to provide guides for the economic management of young-growth Douglas-fir stands. Four model stands at initial stocking rates of 25, 50, 751 and 100 per cent of normal stand values formed the basis of the experiment. Results were as follows: Difference in total physical output between initially understocked and fully-stocked stands is minor, but quality of output, as measured by sawmill and peeler logs, is much lower in the understocked stands. Maximum reductions in net income and soil expectation values at 3 per cent interest were $612 and $44 per acre, respectively, for stands of low initial stocking. Pruning and planting (at 3 per cent) are feasible means of eliminating or reducing the quality differential on some stands and sites. However, the level of profitability varies between stocking and site, and is highest on fully-stocked, highest-site lands. Thus, where funds for management inputs are limited, they should be allocated first to stands of high initial stocking and best sites. When the interest rate was figured at 5 per cent, it was found that natural stands of the initial stocking levels and sites studied here can be profitably operated at that rate. Under the 5 per cent rate, maximum soil expectation values were reduced substantially, and rotation ages were shortened. In addition, there was little difference in soil expectation values between the initially understocked and fully-stocked stands. This indicates that, within biological limits, stocking is not the important factor in economic success of a forest enterprise operating at a 5 per cent rate of return that it is under a 3 per cent rate. These conclusions would indicate that a “do-nothing” policy with respect to fill-in planting and pruning is the most profitable one. However, it is recognized that this is indicated only under conditions where stumpage values do not increase commensurate with interest rates.