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Well now young fellow……you still have a lot to learn as you are still wet behind the ears. You haven’t even considered the expenses that the land owners incur. The land was not given to the owners, they had to pay for it. They also have to pay yearly taxes on the land & timber. Land maintenance? Ha, don’t get me started on that. And we all know how long it takes for trees to mature, especially hardwoods that are rarely replanted after harvesting the previous timber. Yes you can thin a pine plantation after 15-20 years for pulp wood the loggers steal from you. Then it may take another 15-20 years for the pines to reach their full marketable value that the loggers will steal from you again. How do I know this you may ask ? Because I have sold timber to loggers 2 times and got the short end of the stick both times and had to pay taxes on the timber I sold making only pennies n the dollar. Left a bad taste in my mouth to say the least. Now at almost 70 years old I’d never sell another tree to anyone. I’ll let the pine bettles and worms eat them up before I’d get robbed again ! Nuff said…
Would love to see a future analysis for an acquisition of a fairly typical property in Maine and how you might analyze that today without any type of plantation. Maybe a property similar to yours and how that might compare/contrast with a parcel that was recently harvested? Assuming that the price per acre would be less for a recently harvested (clear cut) vs a natural succession parcel at 20, 30 or 50 years.
But does it work exactly the same if you’re not basically level with the base of the tree? …like if a hillside has a 10/12 slope. I guess you’d need to try to stand level with the base of the tree?
Just curious, but what do you think about using the 10-Year treasury note rate for the discount rate as it's generally considered the highest "risk-free rate of return"?
The biggest problem with using the US treasury note is it has no mechanism to track inflation, so there have been many periods of time when the real yield (yield minus inflation) was negative. In this analysis, as soon as the discount rate is lower than inflation, it becomes a game of growing as much wood as possible and keeping it on the stump until a day before it dies. It's an example I love to use whenever people talk about the "economic maturity" of trees, but in truth the bond market has certain macroeconomic considerations that probably shouldnt be used to make forest management decisions.
This was very helpful. I'm in eastern va and just clear cut ~55 acres of mostly white pine that I purchased in Sep'23. After Forest Svc costs of 10%, I netted about $70k. I probably paid too much for the land, but there is always the option of selling a few 2-acre parcels on the state road and the land was next to my great-grandfathers house) The reseeding/herbicide protocols are different here, but after subsidies should be around $150/acre according to my forest service guy. The question I have with this analysis is the basis question on the land purchase. There were essentially no taxes paid on the $70k, and I'm left with about ~$1500/acre in dirt value. I'm assuming I would then use the purchase value as what's left (dirt value)- not the original purchase price? I'm in banking and use the discount as the required pretax return to reach hurdle (ie.>$0 NPV/acre ) so, actually a zero NPV means you make 5% in your example. Again- thanks for this; I always knew this was a close call financially- but land appreciates (usually)- so there's that. :)
Correct--whatever the land is worth today should be used for the purchase cost. It's really just about the opportunity cost of whatever capital is locked in the land at the beginning of the rotation.
The model assumes an annual growth of the per acre tax rate following the rate of inflation. Yes, you absolutely can do it with hardwoods, you just have to use different numbers. I plan to do more videos like this in the future with different silvicultural regimes.
I know that you mentioned it at the very end on hunt leases & firewood. If you are taking into consideration all of your expenses, why not take into account ALL of the potential streams of revenues on your chart application? Revenue from hunt leases, firewood, Air BnB, and even carbon credit revenue for example from a company such as NativState which has a similar 40 year commitment cycle for carbon sequestration can add up to a significant amount. NativState will also make a VERY detailed and indepth forestry management plan for each parcel as well which can be of great value. Very nice presentation! Thanks for posting!
Thanks! You certainly can and should take all those things into consideration when analyzing your land. Here I'm just trying to isolate the benefits of planting alone.
Could have been a 30 second video. One 24 inch nice red oak only worth $158. Good lord what a frustrating video. Bla bla bla, when is this guy gonna spit out the fricking answer???????
I would think that if you're milling your own logs and you have more time than money, it might make sense to cut some short boards. A one meter long board might come in handy for a lot of uses.
If you hold stick with hand in line with your eye, your arm is not extended 99 degrees from your body. Is that a case where you would add the distance from your eye to your shoulder, or just line your hand with where ever it lines up on the tree from the ground then add distance from there to the ground? Hope I am being clear with what I am asking.
very cool zach, think this is a great resource for new woodland land-owners like myself. Might consider working with maine woodland owners association which i just joined- im sure many of their member would be interested in this and i imagine you could write a really nice article promoting this for their paper publication.
Is it true that slower growing, higher value trees bring a higher profit per year ? If so why doesn't everyone invest in 'slow growth, high value' trees ??? I hope that makes sense. Thanking you in anticipation.
I want to plant (invest) 'high value' slow growing trees along my boundaries to give my grandkids an investment in 30 to 50 years from now. We have a slow draining wet ground to cope with in a cool to medium climate in Australia. Do you care to throw in any suggestions ???
Just milled up some cedar for our family lake dock build. 3"x8"'s , logs were free. Time was " free" a real enjoyable day and great finished products. Especially when it'll be used by us for 20-30 years. Not often a hobby actually saves you money
That could be right. I thought I double checked the manual, but I can often misquote things. Ive mostly been milling smaller logs, so I havent been testing the upper limits.
Please comment on deadfall - particularly in the stand of maple / oak where you recommended ASAP selective harvest to promote growth - Do you leave the deadfall as is, cut it smaller for increased decomposition or is it preferable to grind it up with a forestry mulcher ?
The deadfall can be serve an important ecological function as habitat for invertebrates, salamanders, and small mammals, which in turn are a food source for owls, birds of prey, and carnivorous mammals. Generally, I don't think its a good idea to cut it up or mulch it unless it is presenting substantial fire risk or acting to inhibit regeneration by completely covering the forest floor, which can happen with logging debris after a harvest.
A few thoughts. Chains can break, not all injuries are chain related and left handed people using the chainsaw like it's made for left handed use. Either way.. just like most power tools, gloves can be more dangerous than no gloves. Perfect example is the pulling force when contact was made. Glove wasn't penetrated but the hand would have been mangled imo.
The biggest difference is that OnX is an outdoors GPS app with functions geared toward exploration of new areas, whereas SilviCultural is a forestry platform primarily with a mapping feature geared toward organizing and managing land long term. There is overlap, like offline mapping capabilities, but even then the capabilities are differentiated by the target demographic, so when you export a map for offline use with SilviCultural, you own that georeferenced file, and it can be used by you and by anyone you distribute the map to forever, including family, lessees, and contractors. Likewise, the polygon and feature creation and delineation aim to reach functionality of a GIS, whereas with OnX, its a side feature not optimized for long term management or complex organization. As time goes on and I develop capabilities further by connecting polygons to forest growth metrics and such, this differentiation will be more obvious. So while I will be using this app to create offline maps anytime I go hunting or hiking in a new area, OnX will be more optimized for that and have better recreational features.
Yes, the mapping application has Canadian aerial imagery and is perfectly functional for a Canadian user. However, the forest growth modeling tool currently only provides data for the United States.
great fun. thank you. keen to learn more about the mini sawmill/TVI friend you have in Maine. It's also possible to add capital gear in a step by step process (planer, kiln, shaper...)Using local talent/resources;...Thanks for the upload!
very interested in the future marketplace potential of this app. the ability to connect smaller scale timber farmers with craftsmen or builders looking for good quality timber at a fair price and avoiding the big mills is pretty cool. I'd love to see something like this expanded and marketed to homesteaders to give them a place to connect and share information and buy/sell products directly and cutting out the big greedy platforms. really hoping this app is successful and leads to big things, good luck!
