Forest Valuation NCP

DodgeS

The latest issue of Irish Forester has an interesting cover article by Henry Phillips regarding the development of a National Code of Practice (NCP) for forest valuation. As many privately owned forests are coming of age there could be a demand for valuation skills in the coming years and I imagine this could become a field within the forestry sector which could see some new jobs being created.

With this in mind I was hoping to open a discussion here to see if we can come up with any ideas with regards to the project which aims to set a National Code of Practice.

The article referenced above already highlights "the inputs which significantly impact on the forest valuation:

-inventory data
-growth models
-discount rate and risks
-timber prices
-treatment of land and reforestation charges
-residual values (roads)
-costs
-management regime"

These are all logical points to work from when valuing a forest in my opinion but I think things will get interesting when discussions go further into these points.

I've given some of the points some thought with regards to how they will impact the value of a forest to a potential buyer/harvester/investor.

inventory - gathering estimates of the quantity and quality of the timber in the forest will be important. How focused should the data be on purely financial aspects of a forest?

growth models - forests which have not reached maturity which are being sold off early by owners looking for a quick lump sum.

discount rates and risks - insurance policies, tax relief, pension plans.

timber prices - forecasts, supply and demand, availability and proximity of sawmills.

treatment of land & reforestation costs - using the land for forestry after harvest, getting more out of the land and making sure forestry practices are sustainable.

residual values - roads, fencing, fire breaks. Money put into the forest which can reduce the cost of subsequent reforestation.

costs - contractors, licences, management plans, reforestation, insurance.

management regime - sustainable forest management, continuous cover, natural regeneration plans, income from recreational activities.

Has anyone got some thoughts to share?

Reindeer

It is good to see Ireland progressing into a more established method of forestry management. Maybe some day I might find myself doing timber cruising work in Ireland. I currently do this work in the American Pacific Northwest. In a nutshell, either I or the forestry management decide which plots to sample. The plots can be found in an area covering thousands of acres,a simple hillside, mountain, etc. These plot sizes vary greatly, which is sort of the idea. They are tailored to the site and type of trees estimated to be in the area. Then a cruiser visits the plots on foot, tallies the size(DBH, Basal Area, Height), and the species of trees for the plot(usually 8-12 trees per sample), and rudimentary health(pathogens, vectors). If any pathogens or vectors are noted, I usually refer the final diagnosis to certified forestry biologists for confirmation and reporting(both to the site owner and to vector authorities - usually the State Department Of Agriculture). This may lead to another cruise or biologicial survey specifically to track the pathogens and vectors.

I recently helped complete a Phillinus Wareii survey on Fort Lewis, Washington. Next month we do the cruise on it to get the board feet available to log the trees out that are infected or in infected areas. My contract until then is on Weyehauser property around the south Puget Sound area starting next week. This is straight second growth inventory. These will be hybrids, some grown from genetic isolated grafts for robustness. So, Weyerhauser will be interested in their health and size. We also often bring high quality cameras with us to photograph the trees and any pathogens they might have.

The Pacific Northwest is vast, though. I spend weeks with just me and my Greyhound, camping, living out of the Jeep, and eating out of cans or MRE boxes, dodging bears, wolves, and cougars. And being eaten alive by insects when you forget your deet. Occasionally I forget my chainsaw or run out of fuel and have to use my axe to clear old logging trails to make it passable for the jeep(an axe also doubles as a walking stick and lever for getting around). I would imagine the work in Ireland would be a bit easier on a person, though.