A method to maximise forest profitability through optimal rotation period selection under various economic, site and silvicultural conditions

BACKGROUND: Maximising forest profitability is important from both economic and ecological perspectives. Managers of forest areas gain utility by optimising profits, and maximising the efficiency of a forest stand is also beneficial to the natural environment. This study presents a method to estimate and visualise forestry profitability based on variables defined in previous studies. The design space included economic and forest stand factors that can affect profitability. A contribution index analysis identified factors that significantly impact profitability, and these factors were then applied to data collected from a forest area in Japan. The effects of the two primary factors, discount rate and rotation period length, on a measure of profitability, the soil expectation value, were visualised in three-dimensional space. METHODS: The site used in this study, located by Morotsuka village in the Miyazaki Prefecture, Japan. Variables previously found to have significant effects on forestry profitability were used to define a design space of variables for calculating and displaying profitability, after which data from the cited study were used to estimate the variables’ SEV contribution indices. The effects of the important factors for forestry profitability were then analysed and visualised. Dimensions of the design space were constructed from previously published forestry inventory data and consisted of two stand condition factors, three site condition factors, one economic condition factor and one silvicultural planning factor. This study used previously published inventory data regarding stand age, site index and tree species. Additionally, the forestry profit simulator was used to estimate the optimal rotation period in terms of soil expectation value. The relationships between SEV and these significant factors were then graphically visualised. The significant factors identified as described above were used to estimate SEV-based profitability distributions, based on the inventory data used to construct the design space and optimal rotation periods, for the studied forest. RESULTS: Changes in rotation period affected forestry profitability. However, the effect depended on stand, site and economic conditions. In scenarios characterised by relatively low site productivity index and harvesting area, which results in low profitability, rotation period changes did not have a strong effect on profitability. On the other hand, it was vital to select the optimal rotation period for high profitability areas as even a small deviation had a significant impact on profitability. Furthermore, it was shown that by synchronising the harvesting times of small, adjacent stands, the overall profitability increased through reductions in forest management costs. CONCLUSIONS: These results can help local forest management increase profitability through cooperation with individual forest owners. The presented method also has risk management applications, as it could be used to estimate the effects of external uncertainty variables on forest profitability.