What is the net present value of an hectare of forest? Please help me out here

[Henry14]

Dear all,

I am writing an article in which I calculate that the value of a forest's wild edible plants is of about US$72 per ha per year.  I would like to compare this to the value of a logged forest. I came across an article giving values of logs of up to US$100,000 per ha, but I think that this is about the absolute maximum.

How would my US$72 per ha per year compare to a logging concession (preferably in the tropics), even considering a high discount rate and a long time span? I used a 10% discount rate and a 50 years time span, and I arrived at a value of US$8,000 (in 50 years). What is the range of the net present values of an hectare of forest destined for logging?

Thank you for your help.

Regards,

Henry Matthews
Email: swamp@mail.com

[SwampDonkey]

Mean annual increment (MAI) of the forest may help you out in your estimate. Do you know the growth rates in the area? Where does the $100,000/ha come from? Must be some rare exotic hardwoods and someone with a sharp pencil. ;D

[Tillaway]

Depends on species and local market.  The market here was good enough in the early 90's to surpass your maximum.

[crtreedude]

Being in the tropics, I think I can give you some numbers.

Average growth rates in the tropics are between 12 to 26 cubic meters per year per hectare.

Average stumpage is probably between 200 to 600 per cubic meters for many tropical hardwoods - say furniture grade.

So, to take a number that is reasonable, 20 cubic meters times 400 USD per year = 8,000 dollars per year per hectare.

These are numbers for a managed plantation - and you had better know what you are doing.

The value of the logs at 100,000 per ha seems to be someone smoking something. If it was solid old growth cocobolo or something like it, you might make it - but even then I am not sure.

Perhaps they are talking about retail price? For example, if I buy a tree here for 25 cents a board foot - by the time you see it after it exchanges enough hands it could be 10 dollars - much of that because of the difficulty of moving wood from here to there - I cannot easily send you a board without you paying more for shipping than you paid for the wood.

Let's say that you said in the USA an average tropical hardwood went for $10 per BF USD that would mean that that above number would be.

20 hectares times 424 board feet times 10 dollars = $ 84,800.00 USD.  I still don't get there on a sustainable basis (and since you said - per year....) but it is closer.

Ask away if you want more info.

Fred