Pine Tree Farming with Short Rotations –
A New Normal?

by Perry Clements | Dec 1, 2014

The traditional long-term rotation ages for pine plantations in the southeast will always be an option for timberland owners as long as there are sawmills and premium paid for sawtimber products.

However, with increasing pulpwood prices due to increased demands and lower supply in our area, shorter rotations are much more attractive now than they have been in the past. In fact, just a few years ago shorter rotations were not even an option from a financial standpoint. This was mainly due to very low pulpwood prices.

Traditionally, pines are planted with the intent of growing them for at least 30-35 year rotations. Several thinnings would be conducted during the life of the stand to keep the trees healthy and sustain their vigor so that their growth and development could be optimized for sawtimber development.

Growth and yield models have shown that long-term rotation ages when combined with aggressive, intensive management can yield, on average, 8-10% compared for the entire duration of the rotation.

Intensive management means proper site preparation, site control, fertilization and routine, timely thinning.

Advantages to Long-Term Rotations include:

  • Periodic income from thinnings
  • Development of wildlife habitat
  • Aesthetics
  • Good timber investment

Disadvantages to Long-Term Rotations:

  • Exposure to weather catastrophes.
  • Exposure to loss due to fire, insects, disease, etc.
  • Weaker investment compared to short rotations.

Growth and yield models have shown that short rotation ages (11-15), when combined with intensive management, can yield, on average, 12-15% or even more.

Advantages to Short Term Rotations:

  • Short rotations increase income streams by providing income more often.
  • Decreases exposure to weather catastrophes.
  • Less exposure to loss due to fire, insect and disease.
  • Potential for increased investment opportunity.

Shorter rotations are market driven, meaning if the pulpwood market is favorable then a clearcut may be an option. Short rotations are mostly windows of opportunities and should only be considered if markets are advantageous at the time of the first thinning.

Our firm recommends to plan for a long rotation. However, if the conditions are favorable and if the plan is agreeable to the longterm goals of the landowner, then a short rotation becomes an option.

Factors that Affect the Investment Decision for Long-Term Versus Short-Term Rotations Include:

  • Soil Quality
  • Site Index
  • Stand Density
  • Stumpage Price
  • Competition

For sites that are optimal for slash pines with low competition and where pine straw production is a practical reality, the increased income from pine straw can drive the return on investment percentage above 15%.

Especially in today’s financial environment, the above mentioned returns are very strong and easily surpass many other investment opportunities.

Our Analysis Can Be Achieved by Investing in the Following:

  • Proper site preparation and planting techniques (herbicides)
  • Genetically improved superior pine tree seedlings
  • Competition site control
  • Fertilization if needed

Timber Markets (Future Outlook)

Long Term Pine Lumber Production

For the foreseeable future, the timber market outlook for Southwest Georgia looks better than at any time in the past. The Southeast is one of the three major sources of softwood lumber products in the United States and Canada. With Canada experiencing substantial timber losses due to the mountain pine beetle, Canadian imports into the United States are declining. In fact, Canadian sawmill companies are investing in the Southeast at an increasing rate.

The Pacific Northeast in recent years has over-harvested to keep up with China’s demand for lumber products and not kept up with the increasing demand for lumber in the U.S. If new housing starts rise and investments continue to be made in the Southeast, mill facilities predictions are that by 2017 timber prices for sawtimber will meet or exceed the 2005-2007 peaks we saw during those times.

The above will result in the Southeast becoming the number 1 region for lumber production in North America.

Pine Pulpwood—Short Term Wood Production

The future of this sector of the timber market in the Southeast looks very promising with consumption and use slightly increasing and supply on a decline due mostly to land use changes and reduction of pine tree planting over the past decade. This sector points to an increasing market.

Wood pellets and OSB plants are competing for the same products. The wood pellet industry in Georgia alone has grown from none to nine facilities in the last six years and plants continue to be built across the state. Most of the pellets from these plants are exported through the Savannah port to Europe for electrical generating plants.

The pulpwood market has its ups and downs due to weather fluctuations but remains strong and is forecasted to stay that way. During the last couple of years we have experienced pulpwood prices beyond our expectations.

In a nutshell, we believe that for timberland owners who are intensively managing their trees, the return on their investment will have very positive results whether long term or short term rotation management.

For landowners wishing to learn more about their rotation options please contact Charles Rozier and Associates Consulting Foresters at 229-246-4509 or email Perry Clements at pclements@rozierandassociates.com.

Perry Clements is a Georgia Registered Forester with Charles Rozier & Associates in Bainbridge, Georgia. The firm is a full service consulting company that also offers brokerage and appraisal services. They have combined experience of more than 50 years of timber management. Perry has expertise in timber appraisals, timber sales, market analysis, forestry herbicides, and loblolly plantation establishment.