Managing Your Woodlot

Rate of Return and Trees

This section gives specific examples of how trees can generate a positive rate of return--far better than any savings account or CD at the moment.

Examples of how a silvilcultural procedure such as thinning can improve that rate of return are also provided.

Please remember, these examples are a snapshot in time and actual prices go down as well as up, but very rarely stay the same.  So, while a wood lot can viewed as a very solid investment, PLEASE consult a professional forester before committing to anything.

Current B-Cherry Future    
DBH Value ($)   DBH Value ($) Ten Year
(inches)     (inches)     RoR
6 $1.40   8.5 $4.53   12.48%
7 $2.39   9.5 $6.27   10.12%
8 $3.66   10.5 $10.69   11.32%
9 $5.20   11.5 $13.39   9.91%
10 $9.17   12.5 $16.38   5.98%
11 $11.65   13.5 $58.88   17.59%
12 $14.42   14.5 $69.55   17.04%
13 $52.30   15.5 $81.09   4.48%
14 $62.24   16.5 $166.15   10.32%
15 $73.02   17.5 $189.69   10.02%
16 $150.43   18.5 $214.76   3.62%
17 $172.55   19.5 $241.35   3.41%
18 $196.15   20.5 $269.47   3.23%
19 $221.23   21.5 $299.11   3.06%
20 $247.79   22.5 $330.28   2.92%
21 $275.83   23.5 $362.97   2.78%
22 $305.34   24.5 $397.18   2.66%
23 $336.34   25.5 $432.92   2.56%
24 $368.82   26.5 $470.18   2.46%
25 $402.78   27.5 $508.97   2.37%
26 $438.21   28.5 $549.28   2.28%
27 $475.13   29.5 $591.11   2.21%
28 $513.53   30.5 $634.47   2.14%
29 $553.40   31.5 $679.35   2.07%
30 $594.76   32.5 $725.76   2.01%

 

Future DBH and value assume 2 inches diameter growth in ten years. The rate of return is based on the assumption of grade improvement based on DBH parameters where:

      • <9.6"=pulpwood
      • 9.6-12.5"=F3 log grade
      • 12.6-15.5"=F2 log grade
      • >15.6"=F1 log grade.

The dollar values and rates of return given above are based on a model. They are ESTIMATIONS of the first sixteen foot log value. The values for your timber/stand will almost certainly differ. BEFORE you sell, CONSULT a licensed, qualified forestry professional.  Rate of return typically increases as the trees grow into higher grade classes assumingthey are of high enough quality.

Current Hickory Future
DBH Value ($) DBH Value ($) Ten Year
(inches) (inches) RoR
6 $1.49 8 $3.86 9.99%
7 $2.49 9 $5.43 8.11%
8 $3.75 10 $2.75 -3.07%
9 $5.27 11 $3.55 -3.87%
10 $2.67 12 $4.46 5.28%
11 $3.45 13 $10.82 12.11%
12 $4.33 14 $12.99 11.62%
13 $10.51 15 $15.34 3.86%
14 $12.61 16 $23.97 6.64%
15 $14.89 17 $27.62 6.37%
16 $23.27 18 $31.53 3.08%
17 $26.82 19 $35.68 2.90%
18 $30.61 20 $40.08 2.73%
19 $34.64 21 $44.73 2.59%
20 $38.91 22 $49.63 2.46%
21 $43.43 23 $54.78 2.35%
22 $48.18 24 $60.18 2.25%
23 $53.18 25 $65.83 2.16%
24 $58.43 26 $71.73 2.07%
25 $63.91 27 $77.88 2.00%
26 $69.64 28 $84.27 1.93%
27 $75.61 29 $90.92 1.86%
28 $81.82 30 $97.82 1.80%
29 $88.27 31 $104.97 1.75%
30 $94.97 32 $112.36 1.70%

Future DBH and value assume 2 inches diameter growth in ten years. The rate of return is based on the assumption of grade improvement based on DBH parameters where:

  • <9.6"=pulpwood
  • 9.6-12.5"=F3 log grade
  • 12.6-15.5"=F2 log grade
  • >15.6"=F1 log grade.

The dollar values and rates of return given above are based on a model. They are ESTIMATIONS of the first sixteen foot log value. The values for your timber/stand will almost certainly differ. BEFORE you sell, CONSULT a licensed, qualified forestry professional.  Rate of return typically increases as the trees grow into higher grade classes assuming they are of high enough quality.  In current market conditions, small hickory sawlogs are worth less than pulpwood, therefore there is a negative rate of return.

 

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