Simulation of the Impact of Future Market Prices on the Management of Loblolly Pine Plantations

Computer simulation techniques were employed to evaluate the impact that four future market scenarios had on cash flows from intensively managed pine plantations in the South. Four simulation programs were combined to predict tree growth and stand development and to model intermediate thinnings and final harvests for an economic analysis of management alternative for an average loblolly pine plantation. Under the stated assumptions, the results demonstrated that the present value of unthinned stands compared closely with the returns generated from thinned plantations for the future market conditions assumed. This suggests that individual forest product companies may find wood flows, cash flows, tax advantages, and future product requirements of their plants to be overriding factors for engaging in commercial thinning.

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