Valuing different loblolly pine plantation regimes considering traditional and non-traditional timber products and price uncertainties.

Loblolly pine (Pinus taeda) is widely planted in the southern US due to its adaptability, growth rate and suitability for timber markets. It is the premier species in a region that contributes a significant portion of industrial roundwood to the U.S. and the world. This research used three installations (sites) of the Plantation Management Research Cooperative (PMRC) Culture Density Study from the Lower Coastal Plain of Georgia and Florida as case studies to examine loblolly pine timber yields and financial returns from traditional and integrated (including bioenergy feedstock) forest product mixes and a feedstock only scenario for combinations of site class, cultural regime, and density management (planting density and thinning). Financial returns were determined using the Black and Scholes model under the real options analysis approach (ROA) and the traditional discounted cash flow approach of net present value (NPV). Management regimes were ranked using the equivalent annual annuity (EAA) approach for both ROA and NPV due to varying optimum rotation age as influenced by site class, planting density, cultural regime, and thinning scenario. Conclusions regarding best management regimes were the same using ROA and NPV; however, ROA returns were higher as it captured the value from product price volatilities which NPV did not. Financial returns for integrated forest products were greater than for traditional timber product due to the addition of bioenergy feedstock revenues. For the traditional product mix, the optimum regime for low and average site classes was 600 TPA planting density with intensive culture and two thinnings while that for the high site was 900 TPA, operational culture, and two thinnings. Optimum regimes for the integrated forest product mix were similar with the exception that the 600 and 900 TPA densities provided similar returns for each site class. Financial returns for the integrated products mix regimes were generally much less than for bioenergy feedstock dedicated regimes but the feedstock dedicated regime returns reflected unusually high historical prices.