Profitability of the First Commercial Thinning, a Simulation Study in Northern Finland

Anssi Ahtikoski,Anu Hilli,Marja-Leena Päätalo,Juha Laitila

doi:10.3390/f12101389

Abstract

Despite positive signals from increasing growing stock volumes and improved roundwood trade, first commercial thinnings (FCTs) tend to be a bottleneck in Finnish forest management and forestry. The reasons are many, but probably the most crucial would be the lack of simultaneous economic incentives for participating agents, i.e., private forest owners and forest machine contractors. This is due to poor stand characteristics in most FCT cases: low cutting removal with small average stem size. There are five predetermined management options: (1) Industrial wood thinning with only two timber assortments, pulpwood and saw logs, (2) Integrated procurement of industrial and energy wood, (3) Energy wood thinning solely consisting of delimbed stems, (4) Whole-tree energy wood thinning with an energy price of 3 € m−3 and (5) Whole-tree energy wood thinning with energy price of 8 € m−3, that were applied for six separate forest stands located in Northern Finland, and derived from a database representing stands with an urgent need for FCT. Then, a two-phase financial analysis consisting of stand-level optimization (private forest owners) and profitability assessment (contractor) was conducted in order to find out whether there would be simultaneous economic incentives for both participants of FCT. The stand-level optimization revealed the financially best management options for a private forest owner, and then, for a contractor, the profitability assessment exposed the profit (or loss) associated with the particular management option. In brief, our results demonstrated that conducting either an industrial wood thinning (1) or an integrated procurement (2) resulted in a positive economic incentive for both the private forest owner and the contractor in all six cases (stands). Further, applying energy wood thinning with delimbed stems (3) would even generate a financial loss for the contractor, given the roadside prices applied in this study.

Highlights

The growing stock volume of the Finnish forest resources has been accumulating steadily during the last decades, reaching a value of almost 2500 million cubic meters [1], and so too has the roundwood trade increased during recent years, ranging between ca. 60 and 71 million cubic meters per annum [1]
First commercial thinnings (FCTs) tend to be a bottleneck of the Finnish silviculture—the area of managed/conducted first commercial thinnings (FCTs) falls distinctively short of the planned/scheduled area which is based on the silvicultural status and urgency [2]
In Lapland, the need for FCTs within the five years corresponds to a total of app. 470,000 hectares, while during the last five years there have been carried out app

Summary

Introduction

The growing stock volume of the Finnish forest resources has been accumulating steadily during the last decades, reaching a value of almost 2500 million cubic meters [1], and so too has the roundwood trade increased during recent years, ranging between ca. 60 and 71 million cubic meters per annum [1]. The growing stock volume of the Finnish forest resources has been accumulating steadily during the last decades, reaching a value of almost 2500 million cubic meters [1], and so too has the roundwood trade increased during recent years, ranging between ca. 60 and 71 million cubic meters per annum [1] Despite these positive signals, first commercial thinnings (FCTs) tend to be a bottleneck of the Finnish silviculture—the area of managed/conducted FCTs falls distinctively short of the planned/scheduled area which is based on the silvicultural status and urgency [2]. Managing young forests could generate positive socio-economic impacts both at the regional as well as on the national level [5]

Methods

Results

Conclusion