Profitability of the First Commercial Thinning, a Simulation Study in Northern Finland
Despite positive signals from increasing growing stock volumes and improved roundwood trade, first commercial thinnings (FCTs) tend to be a bottleneck in Finnish forest management and forestry. The reasons are many, but probably the most crucial would be the lack of simultaneous economic incentives...
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ftluke:oai:jukuri.luke.fi:10024/547985 2023-10-09T21:54:25+02:00 Profitability of the First Commercial Thinning, a Simulation Study in Northern Finland Ahtikoski, Anssi Laitila, Juha Hilli, Anu Päätalo, Marja-Leena orcid:0000-0003-1658-3813 orcid:0000-0003-4431-3319 orcid:0000-0001-7703-9331 4100110310 4100210610 Luonnonvarakeskus 15 p. true https://jukuri.luke.fi/handle/10024/547985 en eng Multidisciplinary Digital Publishing Institute (MDPI) Forests 10.3390/f12101389 1999-4907 10 12 1389 https://jukuri.luke.fi/handle/10024/547985 URN:NBN:fi-fe2021101851398 CC BY 4.0 forest management profitability first thinning private forests stand-level optimization pine spruce energy wood commercial timber publication fi=A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä|sv=A1 Originalartikel i en vetenskaplig tidskrift|en=A1 Journal article (refereed), original research| fi=Publisher's version|sv=Publisher's version|en=Publisher's version| ftluke 2023-09-12T20:28:04Z Despite positive signals from increasing growing stock volumes and improved roundwood trade, first commercial thinnings (FCTs) tend to be a bottleneck in Finnish forest management and forestry. The reasons are many, but probably the most crucial would be the lack of simultaneous economic incentives for participating agents, i.e., private forest owners and forest machine contractors. This is due to poor stand characteristics in most FCT cases: low cutting removal with small average stem size. There are five predetermined management options: (1) Industrial wood thinning with only two timber assortments, pulpwood and saw logs, (2) Integrated procurement of industrial and energy wood, (3) Energy wood thinning solely consisting of delimbed stems, (4) Whole-tree energy wood thinning with an energy price of 3 € m-3 and (5) Whole-tree energy wood thinning with energy price of 8 € m-3, that were applied for six separate forest stands located in Northern Finland, and derived from a database representing stands with an urgent need for FCT. Then, a two-phase financial analysis consisting of stand-level optimization (private forest owners) and profitability assessment (contractor) was conducted in order to find out whether there would be simultaneous economic incentives for both participants of FCT. The stand-level optimization revealed the financially best management options for a private forest owner, and then, for a contractor, the profitability assessment exposed the profit (or loss) associated with the particular management option. In brief, our results demonstrated that conducting either an industrial wood thinning (1) or an integrated procurement (2) resulted in a positive economic incentive for both the private forest owner and the contractor in all six cases (stands). Further, applying energy wood thinning with delimbed stems (3) would even generate a financial loss for the contractor, given the roadside prices applied in this study. 2021 Article in Journal/Newspaper Northern Finland Natural Resources Institute Finland: Jukuri |
institution |
Open Polar |
collection |
Natural Resources Institute Finland: Jukuri |
op_collection_id |
ftluke |
language |
English |
topic |
forest management profitability first thinning private forests stand-level optimization pine spruce energy wood commercial timber |
spellingShingle |
forest management profitability first thinning private forests stand-level optimization pine spruce energy wood commercial timber Ahtikoski, Anssi Laitila, Juha Hilli, Anu Päätalo, Marja-Leena Profitability of the First Commercial Thinning, a Simulation Study in Northern Finland |
topic_facet |
forest management profitability first thinning private forests stand-level optimization pine spruce energy wood commercial timber |
description |
Despite positive signals from increasing growing stock volumes and improved roundwood trade, first commercial thinnings (FCTs) tend to be a bottleneck in Finnish forest management and forestry. The reasons are many, but probably the most crucial would be the lack of simultaneous economic incentives for participating agents, i.e., private forest owners and forest machine contractors. This is due to poor stand characteristics in most FCT cases: low cutting removal with small average stem size. There are five predetermined management options: (1) Industrial wood thinning with only two timber assortments, pulpwood and saw logs, (2) Integrated procurement of industrial and energy wood, (3) Energy wood thinning solely consisting of delimbed stems, (4) Whole-tree energy wood thinning with an energy price of 3 € m-3 and (5) Whole-tree energy wood thinning with energy price of 8 € m-3, that were applied for six separate forest stands located in Northern Finland, and derived from a database representing stands with an urgent need for FCT. Then, a two-phase financial analysis consisting of stand-level optimization (private forest owners) and profitability assessment (contractor) was conducted in order to find out whether there would be simultaneous economic incentives for both participants of FCT. The stand-level optimization revealed the financially best management options for a private forest owner, and then, for a contractor, the profitability assessment exposed the profit (or loss) associated with the particular management option. In brief, our results demonstrated that conducting either an industrial wood thinning (1) or an integrated procurement (2) resulted in a positive economic incentive for both the private forest owner and the contractor in all six cases (stands). Further, applying energy wood thinning with delimbed stems (3) would even generate a financial loss for the contractor, given the roadside prices applied in this study. 2021 |
author2 |
orcid:0000-0003-1658-3813 orcid:0000-0003-4431-3319 orcid:0000-0001-7703-9331 4100110310 4100210610 Luonnonvarakeskus |
format |
Article in Journal/Newspaper |
author |
Ahtikoski, Anssi Laitila, Juha Hilli, Anu Päätalo, Marja-Leena |
author_facet |
Ahtikoski, Anssi Laitila, Juha Hilli, Anu Päätalo, Marja-Leena |
author_sort |
Ahtikoski, Anssi |
title |
Profitability of the First Commercial Thinning, a Simulation Study in Northern Finland |
title_short |
Profitability of the First Commercial Thinning, a Simulation Study in Northern Finland |
title_full |
Profitability of the First Commercial Thinning, a Simulation Study in Northern Finland |
title_fullStr |
Profitability of the First Commercial Thinning, a Simulation Study in Northern Finland |
title_full_unstemmed |
Profitability of the First Commercial Thinning, a Simulation Study in Northern Finland |
title_sort |
profitability of the first commercial thinning, a simulation study in northern finland |
publisher |
Multidisciplinary Digital Publishing Institute (MDPI) |
url |
https://jukuri.luke.fi/handle/10024/547985 |
genre |
Northern Finland |
genre_facet |
Northern Finland |
op_relation |
Forests 10.3390/f12101389 1999-4907 10 12 1389 https://jukuri.luke.fi/handle/10024/547985 URN:NBN:fi-fe2021101851398 |
op_rights |
CC BY 4.0 |
_version_ |
1779317982795661312 |