PRICE PREDICTIONS AND ECONOMICALLY AFFORESTABLE AREA

Abstract

The profitability of forestry depends on the future trend of timber prices. Three plausible price predictions placed the margin of profitability at three widely differing levels of physical productivity. A good estimate of the elevation at which marginal profitability could be expected under each price prediction was given by productivity/elevation regressions for existing plantations in each of three localities in North Wales. Cartographic sampling enabled the cumulative area of rough grazings below this elevation to be estimated. By combining empirical relationships between price trend, profitability, productivity, elevation and cumulative area, a heavy dependence of afforestable area on future price trend can be demonstrated for North Wales; similar results would be expected throughout Britain. Inclusion of land products other than timber complicates the exercise. The significance of price trend for many forestry decisions justifies much more research on price prediction.