Private Lands to Mitigate Public
Endangered Species Act Mandates
The Red-Cockaded Woodpecker in North Carolina
J. Viola Glenn, Fred Cubbage
NCSU Forestry & Environmental Resources
Ron Myers
US Forest Service
Capital Budgeting Analysis
Comparison of CBA for different land management
options estimates opportunity costs of managing for
specific goals
CBA of 76 potential land management scenarios
72 longleaf pine scenarios
Literature, expert consultation, recent real world activity
3 growth and yield models, 3 site indices, 4 management
scenarios, 3 pine straw scenarios
4 rural alternatives
Loblolly pine
Agriculture
Longleaf Growth and Yield Models
Pub.
Year
1986/
1960
Author(s)
Smith &
Hafley
(NATYIELD)/
Schumacher &
Coile
Farrar
1985
Lohrey &
Bailey1
1Lohrey
1977
Stand
Geography Type
Atlantic
Natural
Coastal
Plain
East Gulf
Coast
Texas,
Louisiana
Natural
Management Inputs
Past
• Dominant
prescribed
height
burns
• Basal area
• Stand age
Prescribed
burns,
thinned twice
Plantation Past
prescribed
burns
•
•
•
•
•
•
Site index
Basal area
Stand age
Site index
Basal area
Stand age
& Bailey model run in conjunction with NATYIELD due to
unavailable data
Longleaf Management Scenarios
Scenario
Description
Max Timber
• Early herbicide
• Prescribed burns
• Thin at 28, Harvest at 40
Multiple Products
• Early herbicide
• Prescribed burns
• Thin at 28 and 40, Harvest at 60
Ecosystem Services
•
•
•
•
Early herbicide
Intensive prescribed burns
Less aggressive thin at 40 and 60
No final harvest
All include site preparation and planting ($306)
Longleaf Pine Straw
3 Cases: no pine straw, conservative, moderate
Conservative pine straw
Age 16 until 55 or final harvest
Every 3rd year
$75/acre/year
Moderate pine straw
Frequency and duration unchanged
$150/acre/year
Consistent with literature
Recent sales at Bladen Lake State Park from $150-$300/acre
Rural Alternatives
Loblolly Pine
Traditional
25-year rotation, timber maximizing
Long Rotation
75+ year rotation to provide RCW habitat
No final harvest
Commercial thinning of 20 tons every 20 years
Agriculture
North Carolina average corn and soybean returns
Results
Longleaf Yield: Maximum Timber SI 60
4,000
Volume in ft3, OB
3,500
3,000
2,500
2,000
1,500
1,000
500
20
25
NATYIELD
30
Stand Age
Farrar
35
Lohrey & Bailey
40
Longleaf Financial Analysis, SI 60, 4%
NATYIELD
Timber,
No Pine Straw
Farrar
NPV
AEV
NPV
AEV
NPV
AEV
Max Timber
($111)
($6)
$41
$2
($119)
($6)
Multiple Products
($274)
($12)
($43)
($2)
($266)
($12)
Ecosystem Services
($476)
($20)
($192)
($8)
($459)
($19)
NATYIELD
Timber &
Conservative
Pine Straw
Max Timber
Multiple Products
Ecosystem Services
Farrar
Lohrey & Bailey
NPV
AEV
NPV
AEV
NPV
AEV
$83
$4
$234
$12
$74
$4
($59)
($3)
$172
$8
($51)
($2)
($209)
($9)
$83
$3
($189)
($8)
NATYIELD
Timber &
Moderate Pine
Straw
Lohrey & Bailey
Farrar
Lohrey & Bailey
NPV
AEV
NPV
AEV
NPV
AEV
Max Timber
$240
$12
$391
$20
$231
$12
Multiple Products
$109
$5
$340
$15
$117
$5
Ecosystem Services
($52)
($2)
$240
$10
($32)
($1)
Longleaf Internal Rates of Return, SI 60
Timber,
No Pine Straw
Timber &
Conservative
Pine Straw
Timber &
Moderate Pine
Straw
NATYIELD
Lohrey & Bailey
IRR
IRR
Max Timber
3.3%
3.3%
Multiple Products
2.6%
2.6%
Ecosystem Services
0.0%
0.3%
NATYIELD
Lohrey & Bailey
IRR
IRR
Max Timber
4.5%
4.4%
Multiple Products
3.7%
3.7%
Ecosystem Services
2.3%
2.5%
NATYIELD
Lohrey & Bailey
IRR
IRR
Max Timber
5.3%
5.3%
Multiple Products
4.6%
4.6%
Ecosystem Services
3.6%
3.8%
Rural Alternatives
Scenario
NPV
SEV
AEV
IRR
Loblolly – Traditional
$126
$201
$8
5.2%
Loblolly – Long
Rotation
($37)
($37)
($1)
3.7%
Agriculture – Corn
$68
$1,757
$70
Agriculture - Soybeans
$160
$4,158
$166
Discount rate for NPV, SEV, and AEV is 4%
Conclusions
Longleaf Competition with Loblolly
Pine straw essential to make longleaf competitive
Need more research on pine straw markets, price impacts
Post-recession prices have negative impact on loblolly
present values
Multiple products and max timber competitive or better than loblolly
For scenarios creating habitat, longleaf with pine straw provides
more profit
Optimal solution may include managing some areas for multiple
products and others for ecosystem services
Lower risk in diversified longleaf scenario which includes
both pine straw and timber
Pine straw prices have never dropped
Higher risk in establishment, grass stage, ice damage
Longleaf Competition with Loblolly
Site Index
60
70
80
Pine Straw
SEV
Present Value
10-year
Opportunity Cost payment
None
($497)
$698
$83
Conservative
($218)
$419
$50
Moderate
($54)
$255
$30
None
($399)
$600
$71
Conservative
($125)
$326
$39
Moderate
$39
$162
$19
None
($284)
$485
$58
Conservative
($19)
$220
$26
Moderate
$145
$56
$7
Longleaf Cost Share
Cost share programs are not yet included
Adding a minimum one time payment of $306 to cover
establishment costs alone greatly reduces opportunity costs
and payments
Site Index
60
70
80
Pine Straw
SEV
Present Value
Opportunity Cost
10-year
payment
None
($191)
$392
$47
Conservative
$88
$113
$13
Moderate
$252
--
--
None
($93)
$294
$35
Conservative
$181
$20
$2
Moderate
$345
--
--
None
$22
$179
$21
Conservative
$287
--
--
Moderate
$451
--
--
Longleaf and Agriculture
Forestry cannot compete with average crop returns
in average years on good sites
Lower quality sites more representative of
candidates for this public-private cooperation
Agriculture is highly variable, only used on high
quality sites, high input costs
Annual payment needed to offset difference in SEV is
$191-$552/year/acre on 10-year contract
Thank You
jvglenn@ncsu.edu
Department of Defense MCI-East, Ron Myers NC Forest Service,
Fred Cubbage NCSU Department of Forestry and Environmental
Resources