SEGMOD—a techno-economic model for evaluating the impact of segregation based on internal wood properties
2018
Murphy, Glen E. | Moore, John R.
KEY MESSAGE: Segregating stands and logs based on internal wood properties is likely to lead to improvements in value for forest and mill owners, but some situations were found where no segregation was the best alternative. Where segregation was the best alternative, segregating logs at the landing, or stands based on pre-harvest inventory assessments, led to the greatest value improvements. CONTEXT: The benefits of segregating stands, stems and logs based on wood properties are not clear due to the high variability of wood properties, poor market signals for wood with superior properties and poor understanding of the costs across the value chain. AIMS: The aim of this study was to determine if the benefits of segregating stands and logs outweighed the additional costs. METHODS: A techno-economic model (SEGMOD) was constructed that allowed comparisons of segregation at different approaches in the supply chain. The model was populated with Pinus radiata (D.Don) stand, cost and price data from companies operating in four forestry regions of New Zealand. A total of 255 segregation scenarios were modelled, which included variations in segregation approach, stand type, stand location, terrain type, market focus and market horizon. RESULTS: Segregating logs based on internal wood properties led to improvements in stumpage and mill door value for most of the scenario sets evaluated. The No Segregation option was found (infrequently) to be best in unpruned stands. Segregating logs based on pre-harvest inventory assessments or at the landing would appear to be the best approach. CONCLUSION: The economic benefits of segregating stands and logs for forest and mill owners outweighed the additional costs in most of the scenarios evaluated.
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