Sunday, May 06, 2007

At a loss.


Link to KMZ file for use in Google Maps and Google Earth.

A new Pacific Lumber timber harvest plan (THP) called "Golden Bear" #1-07-071 has somewhat perplexed me.

By all appearances PL will lose around $60,999.40 if they log this area. If my conclusion is accurate it begs the question- why would they cut this forest at such a loss?

The THP area encompasses 130 acres total. 123 acres are to be clearcut under the euphamism "Rehab" or "rehabilitation of understocked area". According to the logging plan, 10% of the trees in this forest are Douglas Fir and the rest are hardwoods like Tanoak and Madrone. Hardwood fetches a much lower price on the lumber market if sold at all. Often the hardwood trees in these plans are trashed or burned at the Scotia power plant.

In other logging plans that I'm familiar with that included Rehab the Rehab areas were a smaller portion of the plan. This plan proposes Rehab exclusively.

I have provided my calculations in the hopes that someone can tell me if I'm right or totally off the mark.

The following costs and values are from Pacific Lumbers own "Option A" management plan dated 11-21-2002. (At present time petroleum is more expensive and wood less valuable on the market leading me to believe that expenses are higher and potential revenues even lower than figures based on "Option A".)

Cost of "even aged management" (clearcutting or rehab) is $595.00 per acre.

This means it will cost $73,185.00 just to cut the plan area (123 acres).

The cost of tractor yarding, which is mainly what this plan proposes and is the cheapest method, is $180 per MBF (Thousand Board Feet).

There are 246 MBF proposed for harvest so yarding would cost $48,000.00 if only the cheapest yarding method is used.

This brings the total cost so far to $121,185.00

10% of this (24.6 MBF) is Douglas Fir with diameters ranging from 14 to 30 inches diameter at breast height (DBH) with an average of 20 inches according to the Golden Bear THP document. For the sake of arguement I'll say that all of the Douglas Fir is 30 inches DBH which is valued at $339 per MBF.

The gross value of the Douglas Fir to be harvested would then be $8,339.40.

90% (222.4 MBF) of the trees to be cut are hardwoods which are valued at $233 per MBF regardless of species or size.

The gross value of the hardwood to be harvested would be $51,819.20.

So the gross value of all of the wood to be harvested would be $60,158.60.

To conclude:

$121,185.00= Cost of clearcutting and yarding in this plan.
$ 60,158.60= Gross revenue from the wood.

$ 60,999.40= Money lost in this plan.

1 Comments:

At 5/07/2007 12:07:00 AM, Blogger saf said...

I may not be able to respond to comments for a day or two but would appreciate feedback.

 

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