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Regeneration - Your Choice

Prepared for: Forest Landowners Association September / October 2000 Issue
Prepared by: Teddy Reynolds, Reynolds Forestry Consulting – RFC, 870-234-0200 (ext 1202)

Choices for “regeneration programs” are almost unlimited. However, information that influences our selection process is also unlimited. Does any of the following sound familiar?

  • This is what we have always done.

  • My consulting forester said this is the best way.

  • The cheapest method is always the best way.

  • I did not realize that there could possibly be a better way.

  • My chemical representative said this was the best method.

  • I never really thought the method was that important.

  • This way is prettier.

  • I learned that in a seminar years ago.

  • My consultant said not to worry, regeneration takes care of itself.

  • It does not matter which method I choose, as long as they survive.

  • I don’t care; I won’t be alive to see it anyway.

  • God’s in charge of my regeneration program.

  • Joe/Mary at the coffee shop said it worked for him/her.

  • My children can worry about that.

  • My father/mother said he/she still has controlling interest and I had better do it their way.

Unfortunately, our decision making process is not always constituted by the important facts alone. Some of the outside influences are humorous, but sadly real. If you fall into that category, in time, you and your heirs, will reap the forth-coming unsuspected consequences.

To select the appropriate regeneration method (with the above non-silvicultural influences temporarily set aside), you must first understand and determine the following four important factors:

1)    Rotation length (length to maturity of investment in years). The number of years you select does not increase or decrease the diameter of the target crop tree. As you decrease the intensity, the growth decreases and the rotation length must be increased to grow the same diameter tree as a high intensity investment over a shorter time. Whether you select 25 years or 50 years you will still gross approximately $8,000/acre (appreciation and inflation not included). As you select a shorter rotation, you consequently are electing to increase your intensity of management and investment.

2)    Revenue available for investment (per acre). This amount is proportional to the rotation length. As you increase the investment amount you consequently increase the intensity of your management and likewise shorten your rotation.

3)   Acceptable Stocking Rates. Acceptable rates are acres containing 200 or more seedlings per acre (after mortality), preferably 300 to 400 seedlings per acre. Stocking levels below 300 seedlings/acre require mechanical or chemical pruning. Stocking is not to be confused with survival percent, you can have a 70% survival rate and still have a 95% stocking rate in a genetically improved planted stand. On the other-hand, in a naturally regenerated stand you can have a 100% survival rate with a 60% stocking rate. For example: on 100 acres only 60 acres naturally established itself in regeneration (survival was 100%), but on the remaining 40 acres only hardwood brush emerged. As you increase your stocking rates, you consequently increase your investment amount and often times indirectly shorten your rotation.

4)    Risk. As the intensity of site preparation and investment increases, the survival and stocking risk proportionately decrease. Regeneration failures occur more frequently in low intensity site preparation and sometimes end up costing more when re-planting costs are added. When lost opportunity costs ($320/acre/year equivalent return; based on $8,000/acre over 25 years; appreciation and inflation not included) are calculated into failed stands, the total combined cost (two regeneration attempts plus lost opportunity cost) will be far greater than the initial costs for even the highest intensity site preparation. As you decrease the risk, you simultaneously increase the investment and intensity, while shortening your rotation. However, remember you never totally eliminate risk, you just decrease it. There will always be a certain amount of loss in every regime.

Remember, as you wisely increase your investment/intensity, while simultaneously decreasing your term/rotation and produce the same product volume, your net compounding return rate will increase. With start up cost of $360/acre over a 22 year rotation will produce returns over 15% (compounding rate of return after all costs and taxes). The key is shortening your rotation variable in the compounding function formula.

Notation: Your decisions are based on the following assumptions:

  • Soil Type: Sandy Loam with Clay Base at Three Feet. This soil type was assumed to project rotation lengths in the following chart. Other soil types with similar site preparations will produce different rotation lengths.
  • Species: Loblolly Pine.
  • Target Product: Sawtimber (2nd grade lumber).
  • Target Diameter: 16 inches Diameter at Breast Height (4.5 feet; 18 inches stump diameter). Even though the average diameter will be 16 inches upon maturity, there will be trees varying in diameter from 12 to 20 inches.
  • Target Logs: 2.5 - 3 logs (16 feet per log; 7 inch top or first whirl of live limbs, whichever occurs first).
  • Natural pruning (no artificial pruning incorporated). Even though pruning is not included, it does play an important role in certain management regimes.
Circle one selection in each of the four categories. You do not have to select all four categories to determine a preference. One selection to four selections will equally guide you on the chart below to a single or multiple choice option.
Rotation Length (years) 60 50 40 35 30 25 20
Investment (per acre) $50 $100 $150 $200 $250 $300 $350
Stocking (acres stocked) 50% 60% 70% 80% 85% 90% 95%
Risk Rate High Medium Low

 


The following chart serves as a “general” guideline matching Regeneration Method to Rotation, Stocking, Investment, and Risk. Match your above selection to the most appropriate fit (none will fit perfectly) inside the following Regeneration Methods. Your four selections may not fit the chart the first time. If so, you have some contradictions in your selections that need to be adjusted. For example, if you elected a “25 year rotation” with an “investment of $100”, you will need to either adjust the investment to $250 or adjust your rotation to 40 years. If you elect to adjust the 25 years to 40 years, then that puts you with a “Natural Regeneration – Seed Tree – Chemical/Burn” with a 40 year management regime (I hope you're young).

 

Method Rotation Stocking Investment Risk

1)  Natural Regeneration

45 Years 60% $90 High

    a)  Seed Tree

40 Years 60% $90 High

        i)    Burn

50 Years 40% $20 High

        ii)   Chemical

45 Years 60% $85 Medium

       iii)   Chemical/ Burn

40 Years 70% $105 Medium

    b)  Shelterwood

50 Years 70% $90 High

        i)    Burn

55 Years 50% $20 High

        ii)   Chemical

50 Years 70% $90 Medium

       iii)   Chemical/ Burn

45 Years 80% $105 Medium

    c)  Uneven-Age

55 Years 70% $90 High

        i)    Burn

60 Years 60% $20 High

        ii)   Chemical

55 Years 70% $90 Medium

       iii)   Chemical/ Burn

50 Years 80% $105 Medium

2)  Genetically Improved

30 Years 90% $300 Low

    a)   Burn

35 Years 70% $80 High

    b)   Chemical

30 Years 80% $155 Medium

    c)   Chemical/Burn

28 Years 90% $175 Low

    e)   Shear/Rip

26 Years 90% $240 Low

    f)    Tillage        (shear/plow)

22 Years 95% $260 Low

    g)   Tillage (shear/rake/burn/plow)

22 Years 97% $360 Low

Notations for Natural Regeneration

  • Pre-commercial thin between ages four and eight to 400 trees per acre or 80 Basal Area.  

  • Release Spray between ages two to four, if needed.

  • Seedling Survival above 200 per acre to qualify as a stocked acre (ideally between 300 – 400 per acre).  

  • Uneven-Age refers to a minimum of three age classes (three crown heights) evenly distributed though-out the stand. Uneven-Age is not to be confused with uneven-diameter. Loblolly pine trees of the same height are the same age, regardless of the varying diameters. The rotation length in Uneven-Age refers to the target single tree removal date.  

Notations for Genetically Improved Regeneration

  • The above listed investments include seedling and planting costs of $60/acre.

  • 2nd Generation Atlantic Coastal (2nd GAC) Bare-Root are utilized.  

  • Grass Control Following Planting (Arsenal/Oust or Velpar/Oust).

  • Three Fertilizations during the Rotation (early fertilization of DAP with mid and late fertilizations weighted towards Nitrogen).  

  • Release Spray at age two or three, if needed (Arsenal/Escort).

  • Seedling Survival above 200 per acre to qualify as a stocked acre (ideally between 300 – 400 seedlings per acre).

How do I personally feel about the above? Well, as a combined “active landowner” and “consulting forester”, I sincerely believe that “there are no costs involved in Site Preparation. They are simply investments that lower your risks and strengthen your return” by:  

  1. Increasing your stocking rates.

  2. Increasing your biological growth rate.

  3. Increasing your dividend schedule (thinning cycles).

  4. Shortening your investment term (rotation).

  5. Increasing your overall composite rate of return.

Timber when properly managed, provides the rate of return of a high risk mutual fund while exhibiting the combined stability of a Treasury-Bill. The timber-investment's consistent weakness is the knowledge requirement of her investor and their acting there-on.

Time is money. Money can’t buy back the time you waste, but properly managed time can generate revenue. When I can spend a dollar and gain a day, the decision is easy.