Mike Matre

Does thinning planted pine increase profit?

When dealing with timber, the question always arises concerning thinning—will thinning increase my timber profit?

We recently wrapped up a clear cut of 30+/- year old planted slash pine that had never been thinned. We have analyzed the harvest results and we also took the actual stand data and plugged it into a growth and yield model to simulate two thins. Since the site is old field, we also looked at the results had it never been planted in pine, and instead leased to a farmer.

THE RESULTS

Sale

  • 26+/- acre per ton clear cut
  • 30+/- year old planted slash pine on old field site
  • Never thinned
  • Dougherty County, GA

Cruised Estimate

  • $84,911 (with a +-12.5% Standard Error of the Sample Calculated at a 90% Confidence Limit)
  • 29 Cruise Plots (10BAF)
  • Actual Harvested Gross
  • $80,733

Cut Out

  • -4.92% on money
  • -4.58% on tons

Not too shabby. I included this to toot Matre Forestry’s horn. Credit also goes to the timber buyer Culpepper Timber Resources and the logger Don Thornton. In a no thin stand eaten up with suppressed diameters and cankers, plus fighting mill quota and mill quality specifications, a cutout this close is very nice.

* Rotation NPV is the net present value in year 0 of all cost and revenues during the rotation. NPV is often used to compare different investment options. A 7% discount rate was used to calculate.

CONCLUSION

Wow! There it is. Real world data showing that thinning planted pines far beats a no thin rotation. And it is commonsense. Thinning brings money in sooner in the rotation; improves growth rates; improves tree quality (when done right); and increases total revenues. Also, the wildlife habitat is much better in thinned pine plantations, due to improved wildlife ground cover and browse. Consider investing in timberland – you’ll be glad you did. Besides building net worth through timberland investing, you can even go out there and enjoy your woods from time to time!

Notes:  Included in calculations – Reforestation Expense in 1987 of $100 per acre. 2017 market timber prices for actual 2017 clear cut. 2009 market timber prices for simulated 2009 2nd thin. 2001 market timber prices for simulated 2001 1st thin. Annual miscellaneous cost of $2.81 per ac in 1987, increasing $6.00 in 2017. Clear cut total expense of 11%. 2nd thin total expense of 13%. 1st thin total expense of 14%. Estimated dry land rental rates by year (net $36 per acre per year 1987, increasing to net $77 per acre per year in 2017). No CRP payments were included in the analysis (the stand was not in CRP).


Richard Monson is President/Chief Executive Officer of Southwest Georgia Farm Credit. He has worked in the Farm Credit System for the past 31 years, serving in a variety of roles. Mr. Monson received his Bachelor’s degree in agricultural economics from West Virginia University, Master’s degree in agricultural economics from Clemson University, and attended the Graduate School of Banking at Louisiana State University.

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