Shelterwood vs seed tree silvicultural systems - a financial analysis.  R. Baker.  November 2002.  26pp. (unpubl.)

SUMMARY

The shelterwood silvicultural system has been used in the Wombat State forest (Wombat SF) in central Victoria since 1974. In recent years, various problems with shelterwood (including cost of coupe marking, high road maintenance, damage to retained trees during the first cut) have been identified. These operational problems could be largely overcome if there was a greater shift to the seed tree silvicultural system. The current study was undertaken to compare the benefits and costs of shelterwood with those for the seed tree system.

The analysis considered forest typical of the higher productivity areas of the Wombat SF in which the shelterwood system has been applied in recent years. The options compared were:

• Shelterwood with 10 years between the two cuts. Coupe size 40 ha.
• Shelterwood with 5 years between the two cuts. Coupe size 40 ha.
• Seed Tree. Coupe size 40 ha
• Seed Tree. Coupe size 20 ha

Data on growth rates, timber yields, sawlog grade, royalties, and loss and waste were examined, as were Forestry Victoria's management costs of planning, supervision, regeneration, and roading. In addition, the financial benefits and costs to the log harvesting and processing industry were included. The Net Present Values (NPV) were then calculated from the cash flows discounted at a 6% interest rate.

The results showed that the NPV to Forestry Victoria for a 40 ha seed tree coupe is $490/ha higher (18%) than for the same-sized shelterwood coupe (with the second cut at 10 yrs). The separate benefit to industry from such a change is $194/ha. Further, reducing the size of seed tree coupes from 40 to 20 ha decreases the NPV, and reducing the interval between shelterwood cuts from 10 to 5 years increases the NPV. Sensitivity analysis indicated that the financial advantage of seed tree would not be eroded by varying the inputs within reasonable bounds.

Seed tree silviculture (large or small coupes) has thus been shown to be significantly financially superior to shelterwood for the Wombat SF, with benefits accruing both to Forestry Victoria and the timber industry.