The Development of Hardwood Silviculture Regimes Inspired by Financial Criteria

Transcription

1 The Development of Hardwood Silviculture Regimes Inspired by Financial Criteria Gaetan Pelletier Northern Hardwoods Research Institute Orono, March 12, 2013

2 Outline The Northern Hardwoods Research Institute The importance of framing silviculture within the value chain Factors that impact tree value Factors that impact costs A framework for decision making Conclusion

3 Outline The Northern Hardwoods Research Institute The importance of framing silviculture within the value chain Factors that impact tree value Factors that impact costs A framework for decision making Conclusion

4 What is the NHRI? A joint venture between Industry, Université de Moncton, ACOA (ICF) and NB RDC Government funding is for five years; Industry funding is conditional upon performance. Initially, an entity of Université de Moncton at the Edmundston campus An applied research center to enable industry to better manage hardwood forests and strive economically. Has an operating budget of $ 4,3M over five years Board of Directors: 4 from Industry, 2 from UdeM, 1 provincial, 1 federal & 1 from Woodlot Owner Association 4

5 Mission To encourage the sustainable management of our hardwood resource and to support, through applied research, the development of our hardwood forests for the benefit of the industry and organizations that benefit from its harvest and use. 5

6 Research Areas I. Characterization of the Resource and G&Y Modeling II. Silviculture, Management, Growth and Yield of Hardwoods III. Harvesting Operations, Utilization Merchandizing

7 Outline The Northern Hardwoods Research Institute The importance of framing silviculture within the value chain Factors that impact tree value Factors that impact costs A framework for decision making at all scales Conclusion

8 In: Scope of analysis for this presentation Partial cuts, perpetual cover treatments High returns perspective from landowner Multiple entry regimes Stands dominated by Northern hardwoods Strong markets for highgrade products Out: Even-aged regimes Pure biomass situations Choice of harvesting systems 8

9 Current silviculture framework Problem statement: Generally speaking, silviculture of hardwoods is not defined within a long-term financial and ecological framework (especially on public lands). This results in two polarized situations: o Regimes where the long-term values and financial o returns are compromised Operations that are feasible in the short-term but not sustainable Vision: To design silviculture regimes that are viable, sustainable and provide acceptable financial returns and high long-term value for the stand. Goal: To produce a framework that enables the formulation of silviculture regimes that consider impacts of activities on costs, values and returns

10 A silviculture system is: A planned program of silvicultural treatments designed to achieve specific stand structure characteristics during the life of a stand. A program of treatments integrating specific harvesting, regeneration, and stand tending methods Named on the principal method of regeneration and desired age structure. 10

11 At the treatment level, a Instructions for: prescription is: How much to remove What trees to remove Where to remove those trees Trail pattern Expectations for: Operational constraints Quality 11

12 There exists great variation in productivity and wood cost

13 Outline The Northern Hardwoods Research Institute The importance of framing silviculture within the value chain Factors that impact tree value Factors that impact costs A framework for decision making Conclusion

14 Factors that impact tree value Species Size Vigor Form Grade

15 Tree species impacts lumber yield and its value 1,400 $ Green lumber prices for Northeast ($/1000 FBM) 1,200 $ 1,000 $ 800 $ 600 $ sel #1 com #2 com 400 $ 200 $ - $ aspen beech ash y_birch r_oak s_maple Source: Hardwood Review Express, Dec. 2012

16 Tree size impacts value ( to a point) Relative Lumber Yield by DBH class Sugar maple, Nova Scotia, 2002 Relative lumber yield 100% 90% 80% 70% 60% 50% 40% 30% y = x R 2 = % DBH (cm)

17 Tree form impacts product distribution F2 Single main stem below 5 meters Acceptable lean (< 15 ) F4 No single main stem below 5 meters Large branches between 2.5 and 5 meters Acceptable curves on 2 axis or more or significant curve Acceptable lean or sweeps No potential for roundwood product Curves on 2 axis Significant curve Red maple Sugar maple Jack pine Yellow birch

18 Tree grade (size+form+defects) impacts product potential mean percent butt log volume by tree grade (source: Nova Scotia Department of natural Resources Forest Research Report no. 68, 2002)

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20 Outline The Northern Hardwoods Research Institute The importance of framing silviculture within the value chain Factors that impact tree value Factors that impact costs A framework for decision making Conclusion

21 Factors that impact costs

22 Tree size impacts machine productivity and wood cost FPInnovations, provue software Benjamin 2012

23 Tree form impacts harvesting cost F2 Single main stem below 5 meters Acceptable lean (< 15 ) F4 No single main stem below 5 meters Large branches between 2.5 and 5 meters Acceptable curves on 2 axis or more or significant curve Acceptable lean or sweeps No potential for roundwood product Curves on 2 axis Significant curve Red maple Sugar maple Jack pine Yellow birch

24 Hypothetical impact of tree form on harvester productivity Tons per productive machine hour Tons per tree

25 Outline The Northern Hardwoods Research Institute The importance of framing silviculture within the value chain Factors that impact tree value Factors that impact costs A framework for decision making Conclusion

26 A framework for decision making Sustainable & Financially Feasible Hardwood Silviculture Inital State Resource Caracterization Current Value Best sylviculture regime based on financial criteria Recommended treatment for current year Prescription Audit Template G&Y Model Module Operational Best Management Practices Product Yield Module Sylviculture DSS Elligible Silviculture Systems Efficient Operations Module

27 It is important to consider the risk of losing tree vigor (value) Rating Probability of mortality Value ($) projected in time Probability of product downgrade R1 Nil, > 25 years Improve Low R2 Low, years Stable Moderate R3 Medium, 5-15 years Deteriorate High R4 High < 5 years Substantial loss Very high

28 The trees we select to harvest impact the overall value of the regime Code F1 Silhouettes Highgrade potential Potential value Harv./Proc. cost Overall value V. HIGH V. HIGH LOW? F2 MODERATE HIGH LOW? F3 LOW MODERATE MODERATE? F4 NIL LOW HIGH? F5 MODERATE MODERATE MODERATE? F6 HIGH HIGH LOW? F7 MODERATE HIGH LOW? F8 MODERATE HIGH MODERATE?

29 Linking with existing systems Species Good form (F1, F2, F7) Poor form with log potential (F5, F6, F8) Poor form with no log potential (F3, F4) R1 R2 R3 R4 R1 R2 R3 R4 R1 R2 R3 R4 Beech AGS UGS UGS UGS UGS UGS UGS UGS UGS UGS UGS UGS Poplars AGS UGS UGS UGS UGS UGS UGS UGS UGS UGS UGS UGS Red maple AGS UGS UGS UGS UGS UGS UGS UGS UGS UGS UGS UGS Red oak AGS AGS UGS UGS AGS UGS UGS UGS AGS UGS UGS UGS Sugar maple AGS AGS UGS UGS AGS UGS UGS UGS AGS UGS UGS UGS White ash AGS AGS UGS UGS AGS UGS UGS UGS AGS UGS UGS UGS White birch AGS UGS UGS UGS UGS UGS UGS UGS UGS UGS UGS UGS Yellow birch AGS AGS UGS UGS AGS UGS UGS UGS AGS UGS UGS UGS Black spruce AGS AGS UGS UGS UGS UGS UGS UGS UGS UGS UGS UGS Cedar AGS AGS UGS UGS AGS UGS UGS UGS AGS UGS UGS UGS Fir AGS UGS UGS UGS UGS UGS UGS UGS UGS UGS UGS UGS Hemlock AGS UGS UGS UGS UGS UGS UGS UGS UGS UGS UGS UGS Jack pine AGS UGS UGS UGS UGS UGS UGS UGS UGS UGS UGS UGS Red pine AGS AGS UGS UGS UGS UGS UGS UGS UGS UGS UGS UGS Red spruce AGS AGS UGS UGS AGS UGS UGS UGS AGS UGS UGS UGS White pine AGS AGS UGS UGS UGS UGS UGS UGS UGS UGS UGS UGS White spruce AGS AGS UGS UGS AGS UGS UGS UGS AGS UGS UGS UGS

30 The Simplified Process Get information about the stand and characteristics of the trees Decide on the silviculture systems to model Simulate different scenarios that include variations of: o o o Silviculture systems Pecking orders Timing of cycles Grow stand through time Calculate costs, revenues and returns Produce financial indicators (IRR, NPV) for rotation Do sensitivity analysis

31 Comparing 3 scenarios short term long term cost revenue returns cost revenue returns Sanitation ave low low ave high ave Highgrading low high high ave low low Balanced ave high high low high high

32 Rules of thumb Get good info about the stand/block Priority should be to harvest trees with high value today but that will deteriorate in vigor There are trees with negative values when comparing costs vs. product value; it might be ok to leave some standing Be carefull not to highgrade Set minimum residual basal area/density levels Accept variation

33 Outline The Northern Hardwoods Research Institute The importance of framing silviculture within the value chain Factors that impact tree value Factors that impact costs A framework for decision making Conclusion

34 Conclusion Design silviculture regimes that are sustainable and feasible in the long term Chose appropriate financial criteria (IRR, NPV etc.) Understand the factors that impact costs, net value and returns Adopt silviculture that will: o Create a desired species composition o Put priority on harvesting trees that might loose value if otherwise left standing o Grow trees with desired characteristics Size Form Vigor Practice adaptive management

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