Reprinted from JoUR:-IAL
.
OF
FoRESTRY, Volume 50, Number ll, November 1952
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An ·Analysis of Investments in Pruning1
Is artificial forest pruning a good financial investment? This question
confronts owners of young
or ."no" answers are not
cqnsidemble qualifications.
be: estimated. This article
timber throughout the country. But ((ye-s"
always forthcoming
t least not without
Yet the financial outcome of pruning can
suggests one- way to make this important
Elmer W. Shaw and
George R.. Staebler
Foresters, .Puget Sound Research Center,
Pacific Northwest Forest and Range Ex­
periment Station.
-the growth of clear wood and the
cost of pruning-can be evaluated
;mathematically to obtain good esti­
mates of the investment required
prediction.
to produce clear wood by pruning.
Whether
the difference in value
THE NEED FOR F0REST PRUNING is well defined, The major problem,
(the
sec0nd
factor) will be great
not generally understood, or at then, is to find out in terms of dol­
least not properly emphasized. In lars and cents which are the best enough to show a profit is not so
the conflict between present values trees for the long-term pruning in­ susceptible to formula treatment.
In this article no attempt is made
and futu.re values, it is usually the Yestment.
Several attempts have been made to pre'dict these values and, from
present values that win. Conse­ .
quently, as long as high-grade vir­ to provide such answers in a form them, ultimate profits. Rather, the
gin stands are able to supply the that can be applied under a wide aim is to show the added inves.t­
demand for clear lumber and prime range of conditions. Obviously, a ment required to produce clear
face veneer, there is little concern problem as variable and complex as wood, with interest as a cost item,
about producing the supply that pruning cannot be reduced to a and to let the timber owner decide
is likely to be re­
must some day come from young simple formula. Neither can. re­ whether the cost
'
growth. For example, in the Doug­ search nor statistics completely re­ turned.
Olear· wood 2J1 ol:luced .- Obvio s
las-fir region of Oregon and Wash­ place seasoned judgment and broad
ington it is estimated that 45,000 experience; but alone,. judgment ly, it is the first factor, the clear
acres should be pruned e'l!ery year, and experience are not sufficient. wood grown as a result of pruning,
starting now, just to provide the Guides, tables, and research are that must pay for the pruning.
volume of high grade logs that will needed to .supplement experienced Whatever affects the volume of c1,l3ar
wood produced must be studied to be needed to su.stain qualit · ply­ judgment whenever p-ossible.
determine not only its financial wood production at present levels.
Economic Factors
role but also its impact on manage­
Currently, less than one percent of
,
this required acreage is being
The ultimate profit or loss from ment practices. Since clear wood pruned annually. In the ponderosa pruning· is determined by three is grown as a shell around a knotty pine of the Pacific Northwest, factors: (1) the an1ou·nt of usable core, its volume may be taken as pruning has been more extensive; clear wood .produced as· a result of the volun1e . of . the harvested log, yet not more than 111,000 acres pruning; (2) the difference in less the volm1le of the knotty core, have been pruned dnrh1g the past Yalue b e t we e n clear wood and and, perhaps, less some allowances .20 years.
knotty wood at the time of hanest; for incomplete utilization. The diameter of the knotty core
One of the reasons for this ·fail­ (3) the total cost accumulated at
ure to prepare· for expected needs a chosen rate of interest for the at the time of pruning equals d.b.h.
times form class. However, it will
is the lack of information on the required number of years.
These factors may be combined be a few years after pruning until
long term financial aspects of prun­
ing. Neither private companies nor to give the following profit equa­ usable clear wood is produced. If
public f o r e s t e r s wish to invest tion: Profit = volmne of usable the branch is sawed flush with the
mone ' in extensive prunii1g nnless rlear wood produced x difference bark the cambium must grow out­
they are convinced_ that it pays. in value - pruning costs accumu­ ward the thickness of the bark be­
fore the stub can even begin to
The breaking point between profit lated at a chosen interest rate.2
Factors 1 and 3 of this equation. heal, so bark thickness must be in­
and loss is often narrow and not
cluded in the knotty core. (This emphasizes the necessit r of making· •rnterest at the chosen mte com­
'This article is based upon the booklet,
pounded annually-the familiar l.Op"
Financial aspects of pruning. Pacific
even cuts, as close to the bark as where p = interest rate and n = number
Northwest Forest and Range .Experiment
possible.)
Then an all0wance must of years.
Station, POl't.land, Oreg. , August 1950.
···
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820
JOURNAL OF FORESTRY
TABLE 1.-TOTAL PRUNING COST PER THOUSAND BOARD FEET m' CLEAR WOOD PRODUCED--SCRIBNER RULE.
WHEN PRUNED, 10 INCHES; INTEREST RATE 2% PERCENT
Average
Approx.
dia. growth No, rings
per decade
per inch
Years
after
pruning
Inches
1.0
1.5 23 15
2.0
11
2.5
9
3.0
7
125
90
100
70
80
90
100
50
60
70
80
90
100
40
50
60
70
80
90
100
Attained
d. b. h.
Inches
22.5
23.5
25.0
24.0
26.0
28.0
30.0
22.5
25.0
27.5
30.0
32.5
35.0
22.0
25.0
28.0
31.0
34.0
37.0
40.0
Growth
clear wood
20
,
.
OF TREE
H
Total pruning cost per M board feet, when
initial cost per tree, in cents, is
40
60
80
Board feet 161
183
217
194
241
293
348
161
217
279
348
423
504
151
217
293
377
471
574
686
D.B
100
Dollars
27.21
10.09
10.88
5.81
5.98
6.30
6.79
4.27
4.06
4.04
4.14
4.36
4.69
3.56
3.17
3.00
2.99
3.06
3.22
3.44
81.62
30.26
32.65
17.42
17.95
18.90
20.36
12.81
12.17
12.11
12.43
13.09
14.06
10.67
9.50
9.01
8.96
9.19
9.65
10.33
54.42
20.17
21.77
11:61
11.97
12.60
13.58
8.54
8.11
8.08
8.29
8.73
9.37
7.11
6.34
6.01
5.98
6.12
6.43
6.89.
108.83
40.34
43.54
23.22
23.94
25.20
27.15
17.08
16.22
16.15
16.58
17.46
18.74
14.22
12.67
12.02
11.95
12.25
12.86
13.78
136.04
50,43
54.42
29.03
29.92
31.50
33.94
21.35
20.28
20.19
20.72
21.82
23.43
17.78
15.84
15.02
14.94
15.31
16.08
17.22
Growth of clear wood is growth on the first 16- foot Jog. Top d.i.b. of log equals .80 d.b.h. Diameter of knotty core assumed
t be 2.0 inches larger than diameter of log at time of pruning. Minimum attained d.b.h. considered is 22.5 inches, which will
Yield a log whose diameter is 8 inches greater than diameter of knotty core.
·
,
be made. for healing and for the
impossibility of complete utiliza­
tion of the clear wood. One amount
may cover both healing and utiliza­
tion allowances. The scaling diam­
eter of the log at the time of har­
vest is determined by the d.b.h. and
form class of the tree.
Of course these measurements
vary somewhat with species. How­
ever, well-chosen values will apply
to the great majority of the species
and forest types of the United
States. In the tables given in the
original publication (8), of which
Table 1 of this article is a sample,
(,llear wood growing in the butt
16-foot log was computed using a
form class of :80. Bark thickness.
allowance varied from .5 in:ch to
2.5 inches, depending on the d.b.h.
of the tree, and 1 inch was allowed
for healing and incomplete utiliza­
tion. Studies in Douglas-fir (1)
and loblolly pine (5) indicate that
these are adequate allowances, at
"least for those species.
After these fixed, somewhat ar­
bitrary allowances have been made,
the volume of usable clear wood
produced depends on both the
diameter of the tree when pr1,1ned
and the average rate of diameter
growth for a given number of
years. Of these two influences,
growth rate is the more important.
For example, a 6-inch tree that
averages 1.5 inches growth per
decade for 90 years grows only 142
board feet ; by doubling the diam­
eter growth rate, more than three
times as much clear wood (476
board feet) is produced. Similar
figures for a 10-inch tree are 183 and 574 board feet· growth on the pruned section. However, it is often easier and cheaper to prune the smaller tree. These inter-re­
lated effects of size and growth . rate show the need to integrate pruning, silvicultural practice, and management plans.
Pruned stands, especially fully
stocked ones, should be carefully
managed to maintain a high rate of
growth. This may call for periodic
thinning; intermediate harvest cuts,
or selective cutting, depending on
species and stand conditions. In
stands where no release is planned,
extra care should be taken to select
for pruning trees that will not be­
come retarded by competition. This
usually means the larger trees in
even-aged stands. In open·grown
or medium stocked stands, crop­
tree selection is relatively simple,
but in young, even-aged, fully
stocked stands it is more difficult
to select the trees that will retain
or gain dominance as they mature.
The fact that closely grown trees
will eventually prune themselves
naturally has often been presented
as an argument against artificial
pruning. At least it is claimed
that not all the increased value
should be attributed to pruning
since some clear wood might have
been produced anyhow. This may
be partially true in soine cases, but
in general the time required to start
growing clear wood without prun­
ing is often as long as the planned
rotation age itself. ·For example,
research conducted by the Pacific
Northwest Forest ap_d Range Ex­
periment Station and the Forest
Products Laboratory has shown
that in average stands of Douglas­
fir 100 years or more are lost before
a tree starts laying on commercial
clear wood in the first 16-foot log
(3, 4, 7). On the other hand, fast­
growing trees with no competition
or side shading may never yield
any thing but rough, common grade
lumber unless pruned artificially. '
As an indication of the lumber
grade recovery that may be ex­
pected from unpruned young­
growth Douglas-fir, mill studies
conducted by the Pacific Northwest
Forest and Range Experiment Sta­
tion in both Oregon and Washing­
NovEMBER
1952
821
ton may be cited ( 6, 9). The studies
included 1,976 logs cut from trees
50 to 90 years old. Average lum­
ber recQvery was as follows:
32 percent select
merchantable 53 percent No. 1
13 percent No. 2
2 percent No. 3
structural and select
Common Common Common
...,:
&L
d
a)
$40
�--��-----r--_,--ASSVMED
0.8.H. = 10/NCHES
2
COST = 40t PER TREE
a:
w
0
0.. $3 1--+-+---�--+-;-----:---t-- TERM= 100 YEARS AFTER
PRUNING
a
0
$25
-These figures indicate that the a:
young-growth stands are capable c(
w $20
..J
of producing good lumber in the u
structural and common grades, but u.
they produce no lumber in the clear 0 $15
grades that are so important to the t;;
Douglas-fir trade. At present, vir­ 8
..J $10
tually all the clear grades of Doug­ c(
las-fir lumber are obtained from z
0
timber over 100 years old.
E $5
0
Difference in value.-The second
Q
factor that determines the profit c( $0
in p;runing is· the difference in
w
w
u
w
value between clear wood and
D. B. H. GROWTH RATE IN INCHES PER DECADE
knotty wood at the time of harvest.
FIG. 1.- Rate of d.b.h. growth and interest as related to cost of clear wood produced
This difference cannot be accurate­ by pruning.
ly predicted when the tree is
pruned but all trends suggest that ment, the total cost (third factor ing trees must bear the total prun­
the premium for clear wood will of the equation) will include three ing cost. Initial costs must tht>n
remain high, even in an age of items: (a) initial costs; (b) allow­ be computed as $50/80 or 62%
cellulose. Consequently, current ance for mortality; (c) interest.
cents per tree. Estimates of the
prices can be 'us d as a conservative
The initial cost of pruning to a probable mortality should be based
guide. In Douglas-fir, for exam­ height of 18 feet varies widely, on the best available records for
ple, a ·premium of $30 to $35 per ranging from 15 cents to $1 a tree. the species and area on which prun­
thousand board feet above the price A representative average would ing is to be done.
of sawmill grade logs is now being probably be from 30 to 50 cents a
After the initial pruning cost has
paid for peeler grades.
tree, but conditions throughout the been adjusted for probabl-e mar­
In the finished product the price nation differ so greatly that an ac­ tality, then interest-the .third cost
difference is even greater. F01' ex­ curate estimate for a particular item-should be computed. This
ample, in the retail lumber mar­ stand should not be attempted is done by accumulating the ad­
kets, clears sell for from two to five without a field trial or thorough justed cost at the chosen rate 'of
t1mes more than knotty, common study based on ·similar projects. interest for the desired number of
grades. In a recent study of the The main item of initial cost is la­ years. Selecting the interest rate
profit in pruning western white and bor, but other items to include are: is primarily a management deci­
·ponderosa pine, comparisons be­ transportation, c a m p expenses, sion. The long-range program of '
tween the mill recovery from un­ tools, equipment, saw filing, main­ the owner usually determines the
pruned logs and the theoretical re­ tenance, taxes, insurance, supervi­ rate of interest at which he is will­
covery from· pruned 16-ioot butt sian, administration, tree marking, ing to invest his money; however,
logs with a 4-inch knotty core and mapping, planning, and record interest should not be used as an
a scaling diameter of 20 inches keeping.
ironclad rule in deciding whether
Not all trees pruned will live to to prune. Like many other forest
showed an additional value of
$51:96 per thousand ior western be harvested as planned. Some will investments, pruning should be
· white pine and $60.70 per thousand
die, others will inevitably be badly considered from several finanCial
for ponderosa pine, based on Sep­ damaged, and some will fail to angles. Occasionally an investment
tember 1949 lumber prices (2). For make good growth and become sup­ may be justified on the basis of
the concern that manufactures pressed. All these losses must be , other values that more than com­
lumber or other products from its distributed over the pruned trees pensate for the low financial re­
own pruned trees, this should. ac­ that do survive and are cut. For turn, but for the purpose of com­
tually be the criterion of value dif­ example, 100 trees are pruned at parison it is customary to include
a cost of 50 cents a tree, or $50. cqmpound interest at low rates.
ference.
Twenty percent of the trees die or Some foresters have suggested,
Pruning costs.-When pruning
is considered a financial invest­ fail to make crop trees; the remain­ however, that pruning be consid­
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_822
JOURNAL OF FORESTRY
ered as a current cost 'of operation
with no interest charged against
it, and that gains expected to re­
sult from pruning be figured as the
interest rate that will be earned.
From the long-term standpoint, es­
peeially on public lands, this view­
point has much in its favor.
Combined Effects of Economic
Factors
In actual practice the factors
that affect the pruning investment
should be considered in their natu­
ral inter-relations to each other
rather than separately. This can
be shown best by tables and graphs.
Figure 1 represents the effects of
diameter· growth and interest rates
on the cost per thousand board feet
of producing clear wood by prun­
ing-. The sharp drop of the curves
emphasizes the importance of good
'
growth. The effect of different
rates of interest is indicated by
the vertical space between the
curves.
Figure 2 further illustrates how
the cost of clear wood is influenced
by the length of the holding per od
$80
t::
g
IVgrowl
2
De
$60
w
a.
0
0
0
$50
'
De
$40 1- ASSUME.o:
..J
u
u.
0
$30
t;;
8
""'
= /OlNCHES
O.B.H.
COST/THEE= 50¢
.......
C!resf LO''arowth
-' $20
interest. J.O"growfh ....-_n inter st 3.0"grotHh
3%
0
0
ct
$0
0
10
30
20
60
40
YEARS AFTa
70
80
90
100
PRUNING (HOLDING PERIOD)
FIG. 2.-Effect of d.b.h. growth, per decade, and interest rates on the cost of pro­
ducing clear wood by pruning.
by a period of rising costs. The
period of minimum costs, however,
does not necessarily determine the
rotation age, foi' there are many
other factors to consider in decid­
ing the most desirable time for the
final cut.
-the number of years between
pruning and final harvest. When
compound interest is introduced, a
period of falling cost is followed
Problem-(l) To determine the cost of producing clear wood by pruning at the
Voight Creek Experimental Forest.
(2) To estimate the expected profit or loss on the investment.
Given -A 40- year old thinned stand of young- growth Douglas- fir on Site III.
Average height of pruning --------------------------------------------------------------- 18 feet
Average d.b.h. of trees pruned--------------------------------------------------------- 10 inches
2.0 inches
Average rate of d.b.h. growth per decade.
Initial pruning cost per tree---------------------------------------------------------- 25c
All_owance for mortalitY-------------------------------------------------------------------- 15%
Adjusted cost per tree--------------------------------------------------------------------- SOc
(100% - i5% = 85%; 25c + .85 = 29.4c
.
Interest rate -------------------------------------------------------- --------------------------- 2.5%
100 years.
Holding pel'iod (between pruning ·and harvest)
Number of trees pruned per acre-------------------------------------------------- 100
Expected harvest (trees per acre)------------------------------------------------- 85
Assumed"-Pre'mium of clear wood produced-----------------------------------------------"- $SO/M
(difference in value between knotty wqod and clear wood at time of harvest) .
Solution-Consult T ble 1, then interpolate for a pruning cost of SOc a tree using
the data outlined above. The table reveals the following:
·Additional cost per M of clear wood produced--------------------------- $10.18
SO inches
Attained d.b.h.
Yield of clear wood in the 16- ft. butt log.----------------------------------- S48 bd. ft.
By using an assumed future value the profit may be estimated as follows:
$SO.OO
.Assumed premium per M for clear wood
$0.72
Pruning cost per M b.m.
.14
Allowance for mortalitY------------------------------------------------------
Application
_______________________________________
___________________________
·
---------------------------------------------------------------------------------
_____________________________________
____________________________________________________
Total direct costs per M
Interest charges
I intereIst - /
\
$70
_____________________________________________
------------------------------·---··----------------------------­
Total cost per M b.m. to produce....
.86
9.S2
·-------------------------------------------·----
m
10.18
Profit per M b.m. on clear wood produced........
19.82
Profit per tree $19.82 X .S48 M b
6.90
Profit per acre $6.90 X 85----------------------------------------------------------586.50
·
This means that under these conditions, pruning 100 trees at a cost of $25 will
return $568.50 more than would be realized on an investment of $25 in securities
paying 2.5 .percent compound interest for 100 years. Stated another way, it means
that the $25 invested in pruning an acre of trees will earn approximately S.6 percent
·
eompound interest for 100 ye,ars or a total of $862.75.
.
_____________ _____________
,_____________________________________________
_
To illustrate these economic fac­
tors more concret ely, records from
a pruning study conducted in
young-growth Douglas-fir from
1949 to 1952 on the -Voight Creek
Experimental Forest near Orting,
Wash., are included here. This
forest is a 230-acre tract dedicated
to intensive research, and managed
cooperatively by the St. Paul and
Tacoma Lumber Company and the
Pacific Nort. hwest Forest and
Range Experiment Station. Data
used in the solution of the follow­
ing problems are taken froin pub­
lished tables ( 8).
The booklet upon which this ar­
ticle is based ( 8) contains 14 pages
of tables, presenting data for differ­
ent rates of interest, tree sizes,
growth rates, holding periods, and
initial pruning costs. By using
such tables each variable can be
analyzed independently to deter­
mine its influence on the pruning
investment. Such an analysis is
NOVEMBER
1952
valuable in selecting prospective
stands :for pruning. It is equally
helpful in ·determining what size
and type o:f tree within the stand
itself should be pruned.
Conclusion
Artificial :forest pruning is essen­
tial in young stands i:f clear, high­
grade wood is to be produced in a
reasonable length o:f time. The ap­
proximate cost o:f producing clear
wood by pruning can be calculated
in advance by a careful analysis o:f
the :factors. involved. Likewise ' i:f
a :future difference in value be­
tween clear wood and knotty wood
is assumed, the profit or loss on
the pruning investment can also be
predicted.
T·he most important :factor in de­
termining the final profit is gen­
erally the average rate o:f diameter
growth on the pruned section.
Trees with diameter growth rates
less than 1.5 inches per decade, or·
15 rings per inch not counting the
8 3
bark growth, are unlikely to be
profitable pruning chances. O:f all
the various pruning costs, com­
pound interest usually has the
greatest effect upon the ultimate
margin o:f profit. Unless growth is
exceptionally rapid,· high rates o:f
compound interest c a n n o t be
charg·ed and still show a net gain
on the investment. However, the
use o:f interest and carrying
charges as a cost o:f pruning is an
accounting problem subject to dif­
ferent points o:f view. Consequent­
ly, the :forest owner himself sho-uld
decide whether to use compound in­
terest, and i:f so, what rate to allow.
Study o:f these financial aspects
will show that pruning, when prop­
erly done, is a sound investment.
Therefore, artificial :forest pruning
in thrifty, young stands should be
widely encouraged.
Literature Cited
1. ANDERSON, E. A. 1951. Healing time
for pruned Douglas- fir. Report No.
R1907, U. S. Fo1·est Service, Forest
Products Laboratory. Madison, Wis.
2. HUEY, B. M. 1950. The profit in
pruning western white and ponderosa
pine. Northern Rocky Mountain For­
est and Range Experiment Station.
Research Note No. 85.
3, KACHIN, T. 1940. Natural pruning
in second- growth Douglas- fir. Pacific
Northwest Forest and Range Experi,
ment Station. Research Note No. 31.
4. KOTOK, E. S. 1951. Shall we prune
to provide peeler logs for the future f
The Timberman 52(10) :104-109.
5, MANN, W. F., JR. 1951. Pruning lob­
lolly pine in the farm forest. The
Forest Farmer 10(12) :5.
6. MATSON, E. E. 1950. Seco nd- growth
Douglas- fir lumber. Paper presented
at the Pacific Northwest Section meet­
ing of the Forest Products Research
Society, Shelton,· Wash. November,
1951.
7. PAUL, B. H. 1947. Knots in second­
growth Douglas- fir. Report No. R1690,
U. S. Forest Service, Forest Products
Laboratory. Madison, Wis.
8. SHAW, E. W. and G. R. STAEBLER.
1950. Financial aspects of pruning.
Pacific Northwest Forest and Range
F)xperiment Station.
9. WOR-THINGTON, N. P. 1949, L11mber
grade recovery and milling costs from
second- growth Douglas- fir of Central
Western Washington. The Timber­
man 50(11) :58-66,
\