News: Portfolio 2008

University of Georgia Researchers to Timberland Owners: Improve Forest Inventories or Risk Losing Billions in Timber Value

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• • A company that buys acreage based on a timber inventory indicating 8,000 standing tons of stumpage valued at $40/ton when, in fact, only 6,000 tons of stumpage is present, overpays by $80,000.
  • For a hypothetical 10,000-acre forest of pine and hardwood, if stand level sampling error is reduced from 25% to 10%, the additional expected net present value (NPV) realized from the forest would be about $325,000 at a discount rate of 6% and about $537,000 at a discount rate of 4%.
• Additionally, with the likelihood that overall forest management was not as effective with poor inventory practice, the actual value increase in realized returns will be substantially larger than these expected gains in NPV indicate.
  

 

 

 

 

• Timberland management organizations should reduce stand level sampling error below 15% when developing management plans to optimize financial returns.
• Future studies should address:
  • The effect that error in individual inventory variables has on expected NPV.
  • The effect that improperly timed and missed silviculture (care and cultivation) and harvest decisions can have upon expected NPV when based upon faulty inventory information.

To review or obtain a copy of Dr. Borders’ complete study, please go to this page.

 

About University of Georgia, Warnell School of Forestry and Natural Resources
Warnell provides students with five degree-path programs in forestry and natural resource science and management, including majors in forestry, fisheries and aquaculture; natural resources recreation and tourism; water and soil resources; and wildlife management and ecology. With more than 23,000 acres of teaching lands, Warnell is

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