Potential of commercial hardwood forestry plantations in arid lands -: an economic analyses of Prosopis lumber production in Argentina and the United States

Prosopis has one of the world's most dimensional stable lumbers. More than 100,000 t of Prosopis alba logs are being harvested annually in the Chaco Province, Argentina for the furniture industry. A growing luxury furniture industry has developed in southwestern USA with wholesale prices of US$ 1600 m(-3). As the production arises from unmanaged, non-certified native stands it will be important to initiate plantations to guarantee the sustainability of this resource. This economic analyses was developed to quantify the profitability of Prosopis plantations and was based on published values for basal diameter growth of unmanaged and managed native Prosopis stands, and plantations derived from seed and improved clones. The economic model assumed that the rotation lengths necessary to achieve 100 trees ha(-1) with 40 cm diameters containing 15.4 m-3 of sawn lumber per hectare were: 100 years for unmanaged native forests at 707 mm rainfall, 24 year in plantations with improved seed at 707 mm rainfall, 15 year with clones at 734 mm rainfall, 17 year from seed at 1000 mm rainfall and I I year using clones at 1000 mm rainfall. Using a lumber price of US$ 800 m-3 and after deducting a custom sawing rate of US$ 107 m(-3), and when the land value was not included in the economic analysis, the internal rate of returns (IRRs) were 5.3 and 3.1% for the unmanaged native stand and ranged from 11.8% (24 years, 707 mm rainfall) to 34.8% (11 years, clones, 1000 mm rainfall) and from 11.0% ( 24 years, 707 turn rainfall) to 32.5% (11 years, clones, 1000 turn rainfall) for the plantations in Argentina and the United States, respectively. The corresponding values when the land value was included were: 3.5 and 10.0-27.8% (Argentina), and 1.9 and 7.0-18.5% (USA). To simulate the scenario of selling logs and not custom sawing the timber, the price for logs in Argentina was used (US$ 33 t 1). Under these conditions the IRR of the plantations was found to range from 1.3 to 10.0%, when land value was not included in the analysis. Thus, due to the lower productivity of semi-arid forests, it is necessary to convert logs into sawn lumber to achieve economically viable IRRs. Shortening the rotation from 24 to 15 years with clones (even with a 3-fold increase in planting stock cost) doubled the IRR while nearly a 4-fold increase in price was necessary to double the IRR. Clones cannot be commercially produced by rooted cuttings, but can be by grafting. High variability exists in P. alba clones for rooting ability and research is needed to develop systems for rooting cuttings. Inclusion of complimentary grazing, commercial wildlife, intercropping and pod production showed little increase in the IRR over plantations alone. Prosopis plantations had IRRs equivalent to many other commercial hardwood and softwood plantations suggesting that for the first time, commercial forestry may be possible in the world's and zones that are in urgent need of reforestation and economic development. (C) 2003 Elsevier B.V. All rights reserved.