Increasing Returns Through Quicker Payback

Assuming a six percent alternative rate of return, if you could harvest the same volume and log value from a timber stand three years sooner, or capture the same return per acre from a Christmas tree farm three years earlier, in today's dollars your investment return is increased by 19 percent! You increase your returns by 12 percent if you can speed your returns by only two years.

In addition, due to Oregon and Washington 'greenup' regulations, tree farmers are restricted in their ability to harvest stands of trees until adjacent, previously harvested stands have become 'free to grow'. When you face a harvest constraint in a particular stand due to a green-up restriction, this adds an additional importance to investing in seedlings and site preparation that will support a 'jump start' for your plantation. The ability to capture $5000 to 10,000 per acre in net pre-tax returns this year instead of 2-3 years in the future can be worth $500-1500 per acre to you at a 6% cost of money.