Profit-Size Relationships: A Wood Value Expression to Facilitate Stand Management Decision Making

This paper presents an alternative approach to expressing net value of wood in standing trees in relation to important tree characteristics. The approach aims at increasing woodlot owners' and managers' understanding of stand profit production and lead to consideration of stand interventions with higher profitability than those suggested by commonly used guidelines designed for maintaining biologically desirable stock levels. Our investigation showed that determining net wood value in individual trees for stand management purposes is not only feasible but relatively simple to do, requiring little additional information than typically used in stand level cash flow analysis. The presentation of wood value in the form of profit-size relationships presents two major improvements over traditional stand average values and product stumpage values: (1) it links both revenues and costs to determinant tree characteristics, providing a clearer picture of actual financial contributions of trees to stand value. (2) it gives the value of all wood grown and not just the value of volume sold. These two improvements allow landowners and managers to actually see where value is produced in specific stands, and design treatments accordingly to capture financial opportunities that would otherwise go unnoticed.