Price Premium Requirements for Growing Higher Quality Pine Sawtimber in Even-Aged Systems in the Southeastern United States

Abstract

Abstract Intensive pine silviculture has become the dominant management paradigm in the southeastern United States. Although productivity has been substantially increased by the combination of cultural, silvicultural, and genetic advancements, wood quality is sometimes sacrificed in intensive silviculture. Extending the optimal rotation allows trees to grow more timber, which may result in the production of better quality sawtimber; however, landowners may require incentives to do so. We simulated loblolly, slash, shortleaf, and longleaf pine for growth and yield using the Forest Vegetation Simulator (FVS) to determine sawtimber price premiums landowners would require to offset the costs associated with delaying the final harvest by 10 to 30 years in even-aged systems. Required incentives increased with the length of harvesting delay beyond the financially optimal rotation age. On medium productivity sites, landowners would be willing to delay the final harvest by 10 years for sawtimber price premiums of $5.06/ton (20.47%) for loblolly, $5.34/ton (21.6%) for slash, $4.56/ton (18.45%) for longleaf, and $6.71/ton (27.14%) shortleaf pine, respectively. Harvest delays of 10 to 20 years were financially justifiable, whereas extensions exceeding 30 years were prohibitively costly for all species. Delaying the optimal harvest could benefit landowners by generating a premium price for their sawtimber while providing important ecosystem services. Study Implications The study findings will provide a baseline resource for forest landowners and managers who are interested in growing higher-quality and larger-diameter pine sawtimber to longer rotation ages to obtain a premium price. The results will also be helpful to primary forest product industries (e.g., sawmills) who prefer high-quality pine sawtimber and are considering offering a price premium for higher-quality pine sawtimber. Findings can be useful for those interested in managing forests for multiple benefits (e.g., timber production, wildlife hunting leases, carbon credits, and other ecosystem service incentives), as managing stands on longer rotations can provide the dual opportunities of receiving price premiums for higher-quality sawtimber while simultaneously generating revenue from nontimber benefits, which may help justify delaying the final harvest. Our findings can also help make policymakers and forest managers more aware of the minimum price premiums required to offset the revenue loss accrued by delaying the final harvest.