[saf-news] What can we agree on?

Karl Davies karl at daviesand.com
Thu Sep 14 20:00:38 EST 2000



WardropD at aol.com wrote in saf-news, response cc'd to nefr-list, gaof, alt.forestry,
bionet.agroforestry:

> Joe,
> You are right when it comes to long term economics, but many enlightened
> foresters and loggers simply don't care about the future composition and
> growth.  Why?  Because 1. they will be dead before the next rotation matures,

Have these guys ever heard of appraisals?  Have they ever heard of NPV?  If not, I wouldn't say
they're so "enlightened."
You might want to suggest they take a look at
http://www.daviesand.com/Papers/Economics/NPV_Appraisals/ and the references at the end.  Forests
have NPV before this or the next rotation matures.

You might also want to make sure they're not buying into the Great 3-5% Scam that's been perpetuated
all these years by burros, indos and some acados.  See http://www.daviesand.com/Papers/Economics/
for a description of the scam and why it's so popular with these "foresters."

BTW, I had occasion recently to review a computer growth rate analysis for a municipal watershed
forest not far from here.  A consulting forester had used a UMass forestry department simulation
program for the job 15 years ago.  What do you think the volume and value growth rates were?  Yup,
2.98% for volume and 3.25% for value.

I assume the only reason the value growth rate was greater than the volume growth rate was because
of projected mortality in low grade trees.  Trees were graded veneer, sawlog, pallet, pole and
cull.  There was no information about probability for grade increases, grades not even really being
grades in the first place.

If I get the job for updating the inventory, it will be VERY interesting to see what the present
values are.  From what I've seen of this watershed forest, the value growth rates have been much
greater than 3.25%.  And this is without any significant management over the past 15 years.  The
place has been generally neglected and selectively high-graded.  Even so, I figure the value growth
rates are double or triple that 3.25%--without including inflation.

KD






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