Preliminary studies in financial regimes; pulpwood production from Eucalyptus regnans.  J.E. Opie.  April 1971.  13 pp. (unpubl.)

SUMMARY

This report deals with financial regimes for stands of Eucalyptus regnans grown without thinning for the production of pulpwood. Six initial densities by three site indices by three alternative royalty rates were examined. Planting and aerial seeding were considered. The chief assumptions were: no thinnings; 7% interest rate; flat royalty rates; no allowance for supervision, maintenance or insurance; previous stand fully utilized; no renewal planting; plantations one year ahead of seeded stands in development.

The main findings were:

1. There is a steep decline in discounted revenue very soon after the financial rotation is exceeded.

2. Financial rotations are short, from 20 years (medium density by high site index) to 30 years (high density by low site index).

3. High pulpwood yields can be sustained; eg. 60,000 cunits/annum from 27,000 acres net.

4. Pulpwood rotations can be extremely profitable; eg. site index 120, initial density 200/acre and royalty $8/cunit gives present net worth of $76.3, benefit/cost of 3.86 and internal rate of return of 13.4%

5. There is little to choose between planting and aerial seeding at their optimal densities.

6. In general, the lower the initial density the better, but a lower limit of 200/acre for planting is recommended because of branchiness and gaps. This would also serve well for sawlog regimes.

7. At the lowest royalty rate of $4/cunit, investment would only be worthwhile (much better than 7%) on the best sites.

8. In most cases the cost of Phasmatid control could easily be carried.