The economics of radiata pine (Pinus radiata
D. Don) afforestation for the export log trade are evaluated for scrub-covered country of easy topography of site index 110. Twenty thousand eight hundred net of the 25,000 acres gross are initially planted in 11 yr, felling begins in the 16th year, and yields fluctuate between 4 million and 10 million cu ft annually until normality is reached in year 47. The yield for the normal rotation of 20 yr is 8,235 cu ft per acre net of utilisation losses. Silviculture aims at producing two 39-ft logs to a 6-in small end diameter (s.e.d.) by planting at 10 x 7 ft, thinning (probably to waste) to 150 stems per acre (s.p.a.) at 35-ft top height, and clearfelling at 110 ft.
Interest rates from 3% to 14% are evaluated; 1967 costs are used.
At normality 108 men are employed, 64 of them on logging, giving an average production of 79,300 cu ft per man-year.
The proportions of major costs at 7% interest are: logging, 45%; administration, 16%; social, 14%; establishment, 11%; and tending, 7%.
A net price-on-truck of 20.8c per cu ft is obtained after allowing 8.8c for port handling and 8.7c for a single log haul of 89 miles.
Comprehensive sensitivity analyses are made on the effects of altering costs and returns; the most important effects (expressed for a 7% interest rate) are:
1. Differences in yield of 500 cu ft per acre alter land expectation values (LEV) by 16%.
2. Differences in realisations of le per cu ft alter LEV by 10%.
3. Break-even growing costs are 6.4c per cu ft on stump.
4. The effect of locating the forest 40 miles nearer the port increases LEV by 36%.
The net LEVs at 7% are $145 and $166 when social costs are included and excluded respectively. The corresponding rates of return are 13.3% and 15.7%.
Compared with results from site index 95, growing costs are 17% less; productivity per man increases by 3%, and volume production per acre is 13% higher.