Articles containing the keyword 'cost'

For non-industrial private forest (NIPF) owners land with its timber production is an example of a capital asset. Developments in the asset’s value and yield depend not only on forest management but also on other factors that the owner cannot control, for example timber prices and the production circumstances, such as soil and climate. One important basis for decision making related to management strategy and, in the short run, to cutting and silvicultural activities is economic analysis and accounting. The owner has to decide whether to invest more in his property (planting, cleaning, building of forest roads) or disinvest (sell timber or the holding). He has to find ways to increase revenue and cut costs.

However, generally accepted accounting practices for NIPF owners are lacking. Applying business economic accounting principles and forestry accounting traditions, we outline a proposal for a profit and loss accounting and balance sheet for NIPF holdings with a view towards increasing economic awareness among private owners. Key concepts are net profit of the enterprise and calculated profit of the property. Other profit measurements that are used are gross margin, forestry margin, operating margin and operating profit. Calculated profit is based on adjusted net profit. The main concern, however, is to consider the change in the holding’s market value caused by changes in stock volume, quality and price. The contents of the accounting framework development here are applied to three management strategies. The return on investment (ROI) of forestry is compared with other investment alternatives.

• Hyder, E-mail: ah@mm.unknown
• Lönnstedt, E-mail: ll@mm.unknown
• Penttinen, E-mail: mp@mm.unknown

The profitability of forestry in the context of recent economic developments in Finland suggest a more systematic analysis of the profit and the cost structure of small-scale forestry than is normally made today. The domestic and international pressure on farming emphasizes the development of rural areas by means of other business than agriculture, in practice this may mean forestry. Financing in terms of the new law concerning agriculture requires projects to be profitable. Thus, the profitability of different lines of production, including forestry, needs to be reported more carefully than is the practice today.

A network of forestry bookkeeping farms covering the whole Austria has existed for 20 years. The organization and the operation of the forestry bookkeeping and the cost accounting system is based on the scientific cooperation and exchange of information between the organizations in charge. The practical experience and recommendations based thereon might be useful for Finland, when implementing a country-wide network of forestry bookkeeping and cost accounting.

The PDF includes an abstract in English.

• Penttinen, E-mail: mp@mm.unknown

Containerized tree seedlings will be used on an increasing scale in the future in different parts of the world. There are number of techniques for the production of small one-year-old seedlings but it has not been possible to develop a completely satisfactory methods for large containerized seedlings production. In the long-term development of pine plantations established with containerized seedlings the greatest problem has been deformation of the root system. With a new method, based on a sheet of peat and root pruning, it has been possible to produce conifer seedlings with a good root regeneration potential and favourable morphological root system development. The use of small containerized seedlings allows an increase in planting density without any marked increase in regeneration costs.

The PDF includes an abstract in English.

• Parviainen, E-mail: jp@mm.unknown

Standard methods of welfare economics are used in a market simulating framework to evaluate policy measures designed to increase future timber supplies. Forest management cost-share programs are examined using this methodology. The differential regional impact of cost-share payments is considered, as is the distribution of these benefits between stumpage producers (owners of forest land) and stumpage consumers (producers of forest products). Previous estimates of the welfare gains that would result from a higher level of forest management cost-share payments in the southern United States are revised to account for the loss of public revenue resulting from lower future prices. A methodology for comparing alternative policy instruments is discussed, and a preliminary, qualitative comparison is made between the use of cost-share payments and alternative policy measures.

• Brooks, E-mail: db@mm.unknown

Length of the regeneration period is a criterion commonly used for comparing different reforestation methods. The time factor should be evaluated using a realistic system for long-term planning. In this paper the preliminary evaluation is made by simplified calculations based on the development series. The slow regeneration method is assumed to be otherwise equal to the rapid one but it has a 5- or 10-years delay at the beginning, and the rotation is thus the final cutting age plus 5- or 10-years delay. Cost of the time delay is taken to be the difference in reforestation costs that makes the rapid and the slow methods equivalent. Calculations are made using zero costs for the slow method; but if the cost of the slow method increases, the critical cost difference decreases very slowly. The final cutting age and the regeneration method must be decided simultaneously. Therefore, the cost of the time delay is presented as a function of final cutting age. By maximizing the average annual revenue, rotation can be even increased if more rapid but more expensive regeneration method is used.

The PDF includes a summary in English.

• Lappi, E-mail: jl@mm.unknown

In forestry, a classical method of evaluating the profitability of an outlay is to calculate the internal rate of return. If there are many outlays and returns over a period, analytical determination of the internal rate is difficult and requires simulation methods. However, if there is only one outlay and one return, the computation is easy. In this paper, some formulae were developed for practical purposes. The equations also show how the return changes as the ratio between the return and the outlay changes.

The PDF includes a summary in English.

• Kärkkäinen, E-mail: mk@mm.unknown

Planners of the Soviet pulp and paper industry are constantly faced with the problem: which investment policy guarantees the best location structure? Should one invest in existing localities or expand to new areas, especially in heavily forested parts of Siberia? A location theory for the pulp and paper industry, based on three factors (markets, wood raw materials, relative costs) has been suggested by the Soviet authors Antonov and Trusova. In the present study the theory is – for the first time – given empirical contents and the feasible areas for future growth of the industry are tentatively determined. One of the main findings of the study is the detecting of considerable unutilized wood reserves in the European USSR. This supports those Soviet views advocating a European-oriented location in investment strategy for the industry, as market and cost factors are unfavourable to Siberian location.

The PDF includes a summary in Finnish.

• Eronen, E-mail: je@mm.unknown

A theoretical nomogram was made for estimating the costs of fully mechanized thinning and the driving speed of the machine. Based on this nomogram and the previous studies three harvesting methods were compared; systematic fully mechanized harvesting, selective fully mechanized harvesting, and manual felling combined with whole-tree chipping.

The third method was cheaper than the fully mechanized methods in a pole-stage stand. The choice of the most advantageous chipping station depended on conditions, but the smaller tree size and possibly the reduced damage on the remaining stand favour chipping on the strip road rather than chipping on the intermediate landing or at the mill.

Mechanized systematic thinning was the cheapest method for harvesting in the sapling stand. The required driving speed were so low that ergonomic factors should not hinder its use. Factors related to the future production of the stand do, however, limit its use. Mechanized selective thinning does not seem to be an economic method for harvesting in a sapling or pole-stage stand.

The PDF includes a summary in English.

• Harstela, E-mail: ph@mm.unknown
• Tervo, E-mail: lt@mm.unknown

The paper describes the use of printed area in some scientific series concerned with forestry. The material consisted of 8 scientific series, the total number of analysed pages being 2,942. According to the results, the use of printed area was more efficient in journals and other similar periodicals which included several scientific papers than in series published as separate issues. The main reason was the more efficient editorial make-up. The Finnish papers included less figures but more tables than foreign series. There were marked differences between series irrespective of the country of origin. The average figure area varied from 60 to 180 cm² between series, for example. According to the observations there are good possibilities for making more efficient use of the printed area available.

The PDF includes a summary in English.

• Kärkkäinen, E-mail: mk@mm.unknown

The paper deals with the optimization of roundwood transport in cases where many destinations for it exist and where several means of transport are available. It is also understood that the capacities of the factories to which wood is transported can be used at varying degree. A model was developed for a case such as Finland which sells most of its products abroad.

In the above case, the optimization of roundwood transport does not necessarily mean minimization of transport costs. What is aimed at is to obtain, by using different combinations (mill destinations and the media of transport) the maximum difference between the allowable cut (calculated) and real (actual) transport costs.

The PDF includes a summary in English.

• Roitto, E-mail: yr@mm.unknown

In this study a formula has been developed to describe the influence of the change of cost level on such a mechanization prognosis, where is assumed that wages and machine costs bear compound interest. In the study there are some numerical examples.

In the formula p1 = annual per cent increase of wages, p3 = annual per cent increase of machine costs, p2 = sudden and incident per cent increase of machine costs, and tv = delay in the profitability of mechanization.

The PDF includes a summary in English.

• Harstela, E-mail: ph@mm.unknown

The goal of this study was to develop a mathematical model for determination of the optimal winching distance in different conditions as based on harvesting costs. In the thinned forest the strip roads are parallel and the winching routes perpendicularly to them. A directed felling of trees is used so that it is easy to make loads to be winched. The stems can also be prepared to timber assortments on the stump area and gathered to loads for skidding alongside the winching routes.

After winching the timber is transported using a forwarder mowing on the strip roads. If the stems have not been bucked in the forests, they are to be prepared to timber assortments before the following transportation, because the problem of turning whole stems in a thinned forest has not yet been solved.

In the mathematical model the formation of the costs was described using 18 variables of which 15 had an effect on the optimum winching distance. Some empirical values were estimated concerning these variables, and the corresponding optimum winching distance were computed. The optimum was mainly determined by the quantity of timber harvested per unit area, the size of the winching load, the regression coefficient of the times which were depended on the winching distance.

According to the model, the deviation from optimum winching distance does not cause a very great change in the analysed total costs. When the winching distance is longer, the increase of the costs is smaller than if it is shorter than optimum. In general, the increase of the costs was so small that in practice one obviously can be satisfied with rather approximate methods in determining the suitable winching distance.

The PDF includes a summary in English.

• Kärkkäinen, E-mail: mk@mm.unknown

The present study is an examination of the problems involved in raw-wood inventory from the viewpoint of business economics. The term inventory used here includes the standing timber marked for cutting as well as delivery contracts. The task of inventory is to buffer the differences in timing, locality, quantity and quality caused by purchase, production and delivery processes. The basic problem is concerned with profits.

The basic aim is to keep the inventory small. Its limits are determined by comparing the storage costs and costs of shortage. The costs may be decreased without risking the reliability of deliveries by technical development and road improvement, which also decrease dependence on the seasonal variation of harvesting of timber. A model based on present practices, statistics and practical experiences can be used to calculate different alternatives. The volume of purchases, felling, deliveries, transportation, and differences in quantities and transfer is used to estimate the target level of the inventory. It forms a forecast which the future performances can be compared to. In addition to monitoring turnover rate of the total inventory and capital tied to the inventory, also the exceptions in structure, time and quantity of the inventory and the factors changing it should be monitored. A special difficulty in timber inventory book-keeping are the continuous variations in the measured volumes even if no loss occurs.

The PDF includes a summary in English.

• Einola, E-mail: je@mm.unknown

One forest drainage undertaking in Finland often consists of woodlots belonging to several owners, and over hundred owners may be involved. In the present paper a method for allocation the costs to different owners in a joint drainage undertaking is worked out. The problem has been emphasised by the new Waterways Law, which enables also such drainage projects to be undertaken to which some of the land owners oppose. In those cased the costs must be allocated according to the benefit driven by each owner from the project.

The method attempts to assess the benefits to be driven from the forest drainage, those costs of the drainage that are joint and thus subjected to allocation, and what is the area affected by drainage as used as a basis for cost allocation.

The joined costs are apportioned in the following manner. The area of peatland adjusted to differences in the benefit obtained by drainage is ascertained by the land holder by multiplying the index number by the corresponding areas. In the case of cultivated agricultural land, also an index showing the need for drainage is used in computing the adjusted area. Each topographic unit in the map is provided with a notation of its apportionment area. Joined costs are allocated to different land owners in relation to their adjusted land areas.

The PDF includes a summary in English.

• Heikurainen, E-mail: lh@mm.unknown
• Keltikangas, E-mail: mk@mm.unknown
• Seppälä, E-mail: ks@mm.unknown

Silva Fennica Issue 69 includes presentations held in 1948-1950 in the fourth professional development courses, arranged for foresters working in the Forest Service. The presentations focus on practical issues in forest management and administration, especially in regional level. The education was arranged by Forest Service.

This presentation discusses opportunities to increase the use of working machines, such as tractors, in construction of roads and floating channels, which have been little used in Finland. The presentation summarizes the machines available and their use based on experiences in Sweden.

• Koskenmaa, E-mail: ek@mm.unknown

Silva Fennica Issue 64 includes presentations held in 1947 in the third professional development courses, arranged for foresters working in the public administration. The presentations focus on practical issues in forest management and administration, especially in regional level. The education was arranged by Forest Service. Two of the presentations were published in other publications than Silva Fennica. 

This presentation describes budgeting of costs of delivery loggings, which have been at times underestimated in the practical forestry in the state forests.

• Anttila, E-mail: aa@mm.unknown

A comparison was made between two alternative methods of continuous national forest inventory. In method 1, samples measured annually are taken throughout the country, in method 2 samples are confined to one section of the country each year. The figures are derived from national forest inventories carried out in the North-European countries Finland, Norway and Sweden. Systematic sampling on the ground has been employed without remeasured sample plots. Field work consisted of survey tracts.

For the whole country, method 1 gives results, which are continuously up-to-date, although detailed information requires observation over a period of several years. On an average, the results obtained from method 2 area at least n/2 years old (survey cycle n years). For a specific section of the country, method 1 gives preliminary results already in 1-2 years, but more accurate results are at least n/2 years old. Method 2 gives accurate results every n^th year. Thus, method 2 is not always to be recommended, even if the emphasis is laid on regional information and planning.

To gain knowledge of annual timber removals, often necessary in assessing the forest resource situation, stump measurements can be used, either exclusively or by way of control. The corresponding sampling must be affected throughout the whole country, and this can be done only when method 1 is used. Other information required annually, such as estimates of seed crops, occurrence of pests or annual variation of growth due to the climate, favour method 1.

It can be concluded that method 1 has important advantages, although these must be bought at higher costs. A comparison of inventory costs shows, assuming the same degree of accuracy, that the total expenditure for method 2 is 7-8% lower than that for method 1, owing to the difference in transport requirements. Also, other aspects may affect the choice of method, for example, the use of aerial photographs may be arranged more efficiently in method 2.

• Nyyssönen, E-mail: an@mm.unknown

The investigation studies the whole logging operation from the stump to the consumption. The main purpose is to obtain a maximum profit. Proceeds and costs have been studied from the view point of precalculation. First, basic costs theory concepts are introduced. Second, the role of precalculation is described and finally a survey of the practical calculation problems and its results are described.

The purpose of precalculation is to achieve the best possible total financial result for the whole enterprise. The aim is to maximize the difference between future proceeds and the costs. When an alternative calculation is prepared, as many promising alternatives as possible is sought, and the most advantageous of these are selected after a rough survey. Since contributory factors are changing, precalculation is a continuous operation.

Logging operations can be handled in various alternative ways, of which the most advantageous has to be chosen. If there is a large number of different courses of action, the target must be maximum contribution margin per time unit. With labour, too, the aim is to maximize the differentiation between proceeds and costs of a long-term point of view. A working plan of the alternative selected can be formed into a target calculation with the aid of budgets and standards. When purchasing timber, procurement plans can be drawn up and priced for each consignment, and then combined and scrutinized to give target calculations. If the factors affecting them change, the targets must be altered.

The PDF includes a summary in English.

• Einola, E-mail: je@mm.unknown

It is impossible to survey the results and profitability of forestry a hundred years hence of measures taken today. Financial reports in forestry should be kept as separate as possible from stocktaking. Under sustained forest management it is the task of silviculture to supervise the care of growing stock. As long a sufficient money is being used for forest improvement, the situation can be considered satisfactory. To ascertain just what is sufficient, in the analysis of the costs of forestry the investigators should concentrate on establishing which costs are fixed and which are direct (marginal).

Short-time changes of capital can also best be considered by means of a cost analysis of silvicultural measures and other operations. On the other hand, classification of the cost must be correct if the operational statistics are to be of any value. The calculations become much easier if fixed costs do not need to be distributed per production unit. Therefore, there may be good reason to try out marginal costing in forest enterprises. The fixed costs are increasing steadily.

This paper aims at giving ideas in determining the profitability of a forest enterprise. A marginal costing balance sheet mainly illustrates the structure of an enterprise, which gives a general picture of its profitability. If profitability is to be expressed by comparing yield with capital, yield can be treated as interest and capitalized. None the less, this is certain to result in different capital values depending on whether we take the yield to represent 3, 4, or 5% of the capital. A marginal balance is no substitute for the long-term planning which will be needed in a forest enterprise.

The PDF includes a summary in Swedish.

• Runeberg, E-mail: lr@mm.unknown

This paper aims at investigating which factors, in the point of view of the entrepreneur, define the choice of long-distance transport either as floating in bundles, steamship transport or barge transport in the waterway system of Lake Saimaa in 1950s. It defines the usage, kind of fleet, operation and costs of the abovesaid modes of transport. The investigation is mainly based on statistics of Enso-Gutzeit Oyj and the fuel office of the Finnish State Railways.

Location of the industrial enterprise sets the limits for use of the different modes of transport of roundwood. Previous decisions can influence the future choices, for instance, the capital the company has earler invested on the transportation system. Also, the type and amount of timber acquired by the company, transportation distance, time, and means of transport affect the choice of mode of transport. Those factors that direct decision-making, often lead the entrepreneur to stick to the chosen mode of transport.

Floating becomes the more inexpensive the larger the scale of operation is, and if the timber assortment is suitable for floating and water storage. For instance, dry wood is an asset for a wood export agency, and their sales have often time pressures, which rules floating out of their choices. Transportation in vessels has decreased to 4% of all roundwood haulage, but has its function as a supplementary way of transport.

The PDF includes a summary in German.

• Roitto, E-mail: yr@mm.unknown

The analysis of costs is the foundation for the efficient management of logging activities. However, there is little research on cost accounting of logging. This article is an overview on harvesting of timber and its cost accounting, concentrating on joint costs. Costs have to be divided on their structural elements and then regrouped according to different accounting needs to be investigated. This investigation bases the structural cost analysis on running booking of costs. Due to the variability of logging, the costs are divided in detail into categories. The costs of logging are classified by their origin into personnel cost, material costs, costs of services, compensation for use, unrequited costs, risks, depreciation and interest. Further, the costs are classified according to the subject and quality of performance, and by location.

The PDF includes a summary in English.

• Einola, E-mail: je@mm.unknown

In Finland, transportation of wood by vessels has decreased, but is still an important mode of transport especially for firewood. In 1941-1947, nearly 25% of the firewood procured by the State Fuel Board was transported by vessels. This investigation concentrates on loading of wood into barges, since the share of wages of total expenses is greatest in this phase. The loading work amounts to nearly 40% of the total wages.

Two methods of loading barges are used in Finland: loading from the shore and truck loading. This study concentrates on the more common method, loading from the shore. A time study was conducted on the different stages of loading and piling wood into barges, most of which is done by hand. Most time-consuming part of the work is transporting the logs to the barge with a wheelbarrow, comprising over 40% of the working time. Time required for loading firewood is almost twice as much as loading pulp wood. Recommendations for loading places and organization of work are given in the article to improve the efficiency of the work.

The PDF includes a summary in English.

• Heiskanen, E-mail: vh@mm.unknown

The term ‘expenses’ is in forestry insufficiently defined, and its use in the balance sheet of forest management is unclear. In dynamic balance theory the actual working expenses and capital expenditure are separated. The article discusses what should be considered working expenses and what capital expenditure when dealing with certain costs of the forest management, for example costs of administration, cultivation of forests, log-floating channels, and roads and drainage of peatlands.

The PDF includes a summary in English.

• Keltikangas, E-mail: vk@mm.unknown

The article is a review on the costs of raw materials in the Finnish sawmill industry in 1920s based on statistics collected from the members of the Central Association of the Finnish Woodworking Industries (now Finnish Forest Industries). The article includes statistics about the average size of if the saw timber bought in standing sales from private forests and harvested from the industry’s own forests, stumpage price of the timber, and labour costs of the harvesting of the wood. The average size of the logs was greater in the northern part of Finland, where the sawmills could limit the purchases of smaller timber. In the southern part of the country, the size of the timber decreased in 1922‒1926 due to growing demand of the timber. The long transport distances in the north influenced the costs. The number of logs per tree increased during the period. The level of stumpage price varied considerably in different parts of the country, falling from the south-west to the east and north. Competition of raw material increased the stumpage prices in 1922a and 1926‒27. The international economic downturn influenced the industry in 1929‒1931.

The PDF includes a summary in German.

• Saari, E-mail: es@mm.unknown

Linear optimization model was used to calculate seven wood procurement scenarios for years 1990, 2000 and 2010. Productivity and cost functions for seven cutting, five terrain transport, three long distance transport and various work supervision and scaling methods were calculated from available work study reports. All methods are based on Nordic cut to length conditions. Finland was divided in three parts for description on harvesting conditions. Twenty imaginary wood processing points and their wood procurement areas were created for these areas. The procurement systems, which consists of the harvesting conditions and work productivity function, were described as a simulation model. In the LP-model the wood procurement system has to fulfil the volume and wood assortment requirements of processing points by minimizing the procurement cost. The model consists of 862 variables and 560 restrictions.

Results show that it is economical to increase the mechanical work in harvesting. Cost increment alternatives effect only little on profitability of manual work. The areas of later thinnings and seed tree- and shelterwood cuttings increase on cost of first thinnings. In mechanized work one method, 10-tonne one grip harvester and forwarder, is gaining advantage among other methods. Working hours of forwarder are decreasing opposite to the harverster. There is only little need to increase the number of harvesters and trucks or their drivers from today’s level. Quite large fluctuations in level of procurement and cost can be handled by constant number of machines, by alternating the number of season workers and by driving machines in two shifts. It is possible, if some environmental problems of large-scale summer time harvesting can be solved.

• Rummukainen, E-mail: ar@mm.unknown
• Alanne, E-mail: ha@mm.unknown
• Mikkonen, E-mail: em@mm.unknown

The profitability of fast-growing trees (Eucalyptus camaldulensis Dehnh., Acacia mangium Willd. and Melia azedarach L.) was investigated in the north-eastern and eastern provinces of Thailand. The financial, economic, and tentative environmental-economic profitability was determined separately for three fast-growing plantation tree species and for three categories of plantation managers: the private industry, the state (the Royal Forest Department) and the farmers. Fast-growing tree crops were also compared with teak (Tectona grandis L. f.), a traditional medium or long rotation species, and Para rubber (Hevea brasiliensis (Willd. ex A. Juss.) Müll. Arg.) which presently is the most common cultivated tree in Thailand.

The optimal rotation for Eucalyptus camaldulensis pulpwood production was eight years. This was the most profitable species in pulpwood production. In sawlog production Acacia mangium and Melia azedarach showed a better financial profitability. Para rubber was more profitable and teak less profitable than the three fast-growing species. The economic profitability was higher than the financial one, and the tentative environmental-economic profitability was slightly higher than the economic profitability.

The profitability of tree growing is sensitive to plantation yields and labour cost changes and especially to wood prices. Management options which aim at pulpwood production are more sensitive to input or output changes than those options which include sawlog production. There is an urgent need to improve the growth and yield data and to study the environmental impacts of tree plantations for all species and plantation types.

The PDF includes a summary in Finnish.

• Niskanen, E-mail: an@mm.unknown
• Luukkanen, E-mail: ol@mm.unknown
• Saastamoinen, E-mail: os@mm.unknown
• Bhumibhamon, E-mail: sb@mm.unknown

The influence of log properties (diameter, length, taper, volume, density and quality), sawing pattern, yield, sawing efficacy, stoppages, consumption of electric power and thereby on the financial result of sawing was examined. In addition, the significance of various revenues and costs were studied from the point of view of the financial result of sawing. The revenues from sawing are composed of revenues obtained from sawn goods, chips, sawdust and bark. The costs in sawing are made of raw material, capital, labour, energy and other costs. The results were calculated per diameter class and applying the basic principle of targeting all returns and costs on the different diameter classes.

The results are based on test sawings of a total of 1,606 Scots pine logs representing eight diameter classes,  using conventional frame saw sawing patterns. In addition, a sawing simulator was used. Log top diameter had a significant influence on the financial result obtained when calculations were made per log volume. The financial result obtained for the biggest diameter class exceeded that of the smallest diameter class by FIM 99.1/m³. Sawing revenues accounted for FIM 66.0/m³ and sawing costs for FIM 33.1/m³ of this difference. In addition to being influenced by the top diameter, the yield and sawing efficacy were observed to have a clear influence on the financial result. The influence of stoppages was smaller.

The only means of gaining significant improvement in the annual result obtained from sawing were improvements in the revenues from sawn goods or reductions in the cost of raw material. Increase of the minimum diameter led to a significant improvement in the annual result obtainable from sawing only if the production time remained unchanged; i.e., when correspondingly more logs from the other diameter classes were sawn. If the production time was reduced by an amount corresponding to the increase in minimum diameter, then the annual result fell dramatically except in the case of minimum diameter.

The PDF includes a summary in English.

• Hakala, E-mail: hh@mm.unknown

The study examines the factor demands of the Finnish pulp and paper industry. In the theoretical part of the study, factor demand equations are derived using neoclassical production theory. In the empirical part, econometric factor demand model is estimated using annual time-series data for the period 1960–86. The relationship of factor demands and their prices are examined in terms of own price, cross price and substitution elasticities.

It is assumed that the ”representative firm” in the pulp and paper industry is minimizing its costs of production at a given output level. In addition, a number of other assumptions are made which enable the production technology to be represented by a cost function, in which the inputs are capital, labour, energy and raw materials. From the cost function, the factor demand equations, i.e., the cost share equations are derived by applying Shephard’s lemma. The equations are transformed to estimable form using translog approximation for the underlying factor share functions.

The study differs from the previous factor demand studies by applying the error correction model based on the Granger Representation Theorem and the results of the cointegration literature to model the dynamics of the factor demand. This approach provides a statistically consistent method for estimating the long-run static factor demand equations and the corresponding short-run equations. In general, the econometrics of integrated processes (e.g. stationarity and cointegration tests) applied in the present study have not been applied before in factor demand systems models.

The empirical results of the study indicate that the error correction approach can be applied to estimations of the factor demands for the pulp and paper industry. In both industry sectors, the adjustment to short run disequlibrium (price shocks) appears to be fairly rapid. The most significant results of the calculated elasticities are that the factor demands of pulp and paper industries clearly react to changes in factor prices and that there are significant substitution possibilities between the different inputs. The absolute values of the elasticities are, on average, somewhat larger than have been obtained in previous studies.

The PDF includes a summary in Finnish.

• Hetemäki, E-mail: lh@mm.unknown

The transport unit in roundwood towing on Lake Iso-Saimaa in Central Finland comprises a tug and a raft of bundled wood with a towline between them. There are several factors influencing the economic size of the transport unit in roundwood towing. These are changing with the enterprises and along with general developments. In this paper these factors or factor groups are seen from the point of view of the enterprise. The main question is to determine the most economic combination of tug and raft size.

From the point of view of the towing enterprises the unit costs of transport are the most decisive factor. Both the size of the raft as well as the power of the tug influence strongly the unit costs. As a long-term goal a raft of about 35,000 m³ and a tug of 550 kW or more is considered to be advisable. The width of channels and sounds then allow a free passage for rafts being 36–40 m wide.

The PDF includes a summary in Finnish and in French.

• Roitto, E-mail: yr@mm.unknown

The aim of the present study was to explain how the Finnish paper industry increased its production and its exports, broadened its markets and managed to show a profit in its activities during the period between the two world wars, despite the restrictive international commercial policies then prevailing, and despite the economic depression of the thirties. Newsprint has been treated as a subject for detailed examination.

The study is based on a comparative investigation of the price received by the paper mills for their paper and the costs of production. Since the market price of paper fell during the twenty years in question, one must examine how the mills responded to the reduction in selling price. Technically the study ranges from the valuation of the standing timber to the handing over of the finished product to the buyer. Between 1929 and 1933 the cost of producing newsprint fell by 387 marks per ton.

The most significant factor in maintaining competitive power was the technical development and increased output brought about in the mills. That alone accounted for half the savings achieved. The reduction in the buying price of wood and in delivery costs accounted for about a third of the difference in production costs, and other factors for the remaining fifth. In addition, the devaluation of the Finnish mark was crucial. Measures taken to reduce costs were effective in so far as the paper mills, with only one or two exceptions, maintained their competitiveness in international markets and managed not only to retain but also to extend their markets.

The PDF includes a summary in English.

• Ahvenainen, E-mail: ja@mm.unknown

The paper deals with the possibilities of decreasing the costs of timber harvesting and silvicultural work through regional cooperation between private forest owners in Finland. Alternatives based on joint management and, on the other hand, joint ownership were compared with activities on a forest-unit basis. According to the results obtained, considerable savings in costs can be gained through cooperation on a regional basis. Examination of the data obtained from the study shows that in the case of harvesting some 40 million Finnish marks can be saved annually by application of the joint-management alternative, and as much as 90 million marks annually by the joint-ownership alternative, when taking the whole country into consideration. The corresponding values for silvicultural work were 2 million marks and 4 million marks, respectively.

The PDF includes a summary in English.

• Vesikallio, E-mail: hv@mm.unknown

The first part of the study includes a summary of conclusions from five earlier reports dealing with terrain transportation costs, effect of terrain, load, snow and additional machine components on the mobility of forest tractors, and the distance a vehicle has to move in forest transportation of timber. In the second part of the study the effect of these separate factors on the transport output have been analysed on the basis of simulating a transportation of 3,000 loads by computer.

It was concluded that no specific terrain factor had a dominating effect on any component of the forwarding output. However, many terrain-factor combinations with a nonsignificant effect on the mobility and also on the forwarding output were identified. The most significant factors affecting the output were the size of load and the distance driven during the cycle.

The PDF includes a summary in Finnish.

• Haarlaa, E-mail: rh@mm.unknown

Emphasis was laid on the finding of regression equations to indicate the dependence of standard error upon various variables in systematic sampling. As a result, the size of sample for a given precision could be computed, under varying alternatives of sample plot size and type. Another task was that of examining inventory costs by means of time studies. On combination of the results in regard to the sample size and survey time, the relative efficiency of different alternatives could be discussed, with a view to the precision of the total volume of growing stock.

The PDF includes a summary in Finnish.

• Nyyssönen, E-mail: an@mm.unknown
• Roiko-Jokela, E-mail: pr@mm.unknown
• Kilkki, E-mail: pk@mm.unknown

The EU’s influence on national forest policies is growing, and the implementation of forest-related policies proposed by the Commission will affect the practice of forestry in Europe. For instance, the Nature Restoration Law sets concrete areal goals for restoring forest ecosystems and for conservation, the Deforestation Regulation requires meticulous tracking of wood’s origin, and the renewed Renewable Energy Directive (RED III) sets new criteria to sustainable forest biomass procurement. So far there have been no studies that have looked into the impacts from the economic and operational point of view. In this study, structural systems analysis was first performed to discover the relevant variables (and their functioning) associated with the roundwood harvesting operations and the operating environment. A scenario approach was then applied to capture the potential levels of implementation of the EU’s forest-related policies. Finally, using different scenarios (low-, moderate- and high-impact) and a systems analysis framework, the impact of alternative levels of implementation was quantified in terms of harvesting costs, measured in € m^–3. The results indicate that with the low- and moderate-impact scenarios the harvesting costs would increase by less than 10% from the current levels in three different regions in Finland. Such an increase (less than 10%) could be tolerated over a period of a few years, but a sudden increase is likely to lead to challenges to the running of businesses. With the high-impact scenario the harvesting costs would increase by between 15% and 18%, depending on the region. This magnitude of increase (of approximately a sixth) corresponds to a severe change in the roundwood harvesting operations and operating environment.

• Ahtikoski, Natural Resources Institute Finland (Luke), Tekniikankatu 1, FI-33720 Tampere, Finland https://orcid.org/0000-0003-1658-3813 E-mail: anssi.ahtikoski@luke.fi
• Väätäinen, Natural Resources Institute Finland (Luke), Yliopistonkatu 6, FI-80100 Joensuu, Finland https://orcid.org/0000-0002-6886-0432 E-mail: kari.vaatainen@luke.fi
• Anttila, Natural Resources Institute Finland (Luke), Latokartanonkaari 9, FI-00790 Helsinki, Finland https://orcid.org/0000-0002-6131-392X E-mail: perttu.anttila@luke.fi
• Laitila, Natural Resources Institute Finland (Luke), Yliopistonkatu 6, FI-80100 Joensuu, Finland E-mail: juha.laitila@luke.fi
• Mutanen, Natural Resources Institute Finland (Luke), Yliopistonkatu 6, FI-80100 Joensuu, Finland https://orcid.org/0000-0003-0533-9356 E-mail: antti.mutanen@luke.fi
• Lindblad, Natural Resources Institute Finland (Luke), Yliopistonkatu 6, FI-80100 Joensuu, Finland https://orcid.org/0009-0003-6766-6587 E-mail: jari.lindblad@luke.fi
• Sikanen, Natural Resources Institute Finland (Luke), Yliopistonkatu 6, FI-80100 Joensuu, Finland E-mail: lauri.sikanen@luke.fi
• Routa, Natural Resources Institute Finland (Luke), Yliopistonkatu 6, FI-80100 Joensuu, Finland https://orcid.org/0000-0001-7225-1798 E-mail: johanna.routa@luke.fi

Uneven-aged forests set certain challenges for cut-to-length harvesting work. It is a challenge to cost-effectively remove larger trees while leaving a healthy understory for regrowth. The study’s aim was to evaluate productivity and costs of harvesting two-storied Silver birch (Betula pendula Roth) and Norway spruce (Picea abies (L.) H. Karst.) stands by creating time consumption models for cutting, and using existing models for forwarding. Damage to the remaining understory spruce was also examined. Four different harvesting methods were used: 1) all dominant birches were cut; 2) half of them thinned and understory was preserved; compared to 3) normal thinning of birch stand without understory; and 4) clear cutting of two-storied stand. Results showed the time needed for birch cutting was 26–30% lower when the understory was not preserved. Pulpwood harvesting of small sized spruces that prevent birch cutting was expensive, especially because of forwarding of small amounts with low timber density on the strip roads. Generally, when taking the cutting and forwarding into account, the unit cost at clear cuttings was lowest, due to lesser limitations on work. It was noted that with increasing removal from 100 to 300 m³ ha^–1, the relative share of initial undamaged spruces after the harvest decreased from 65 to 50% when the aim was to preserve them.  During summertime harvesting, the amount of stem damage was bigger than during winter. In conclusion, two-storied stands are possible to transit to spruce stands by accepting some losses in harvesting productivity and damages on remaining trees.

• Niemistö, Natural Resources Institute Finland (Luke), Natural resources, Kampusranta 9 C, FI-60320 Seinäjoki, Finland https://orcid.org/0000-0002-9152-2108 E-mail: ext.pentti.niemisto@luke.fi
• Korpunen, Norsk institutt for bioøkonomi (NIBIO), Division of Forest and Forest Resources, Department of Forest operations and digitalization, Divisjon for skog og utmark, Avdeling for Driftsteknikk og digitalisering, Høgskoleveien 8, 1433 Ås, Norway https://orcid.org/0000-0001-9749-5684 E-mail: heikki.korpunen@nibio.no
• Nuutinen, Natural Resources Institute Finland (Luke), Production systems, Yliopistokatu 6 B, FI-80100 Joensuu, Finland https://orcid.org/0000-0003-3360-4444 E-mail: yrjo.nuutinen@luke.fi

This study’s aim was to identify how the application season and the method of early cleaning (EC), the first stage of multistage pre-commercial thinning (PCT), affected the time consumption in EC and in the subsequent second PCT operation. The worktime in EC was recorded in the spring, summer, and autumn in 22 sites, which were either totally cleaned or point cleaned. Later, these sites were measured at the time of the second PCT. Time consumption was estimated in PCT, based on the removal of the sites. The time consumption in EC was 5.3 productive work hours (pwh) ha^–1, 7.3 pwh ha^–1, and 6.2 pwh ha^–1 respectively in the spring, summer, and autumn. EC in the spring instead of the summer saved 27–30% of working time, depending on the cleaning method. Point cleaning was 0.8 pwh ha^–1 quicker than total cleaning, but the difference was statistically insignificant. The second stage, PCT, was 1 pwh ha^–1 slower to conduct in sites which had been early cleaned in the spring instead of the summer. However, at the entire management program level, EC applied in the spring or autumn instead of the summer saved 11% or 5% respectively of the total discounted costs (3% interest rate) of multistage pre-commercial thinning. Today, the commonest time to conduct EC is in the summer, which was the most expensive of the analyzed management alternatives here. We can expect savings in juvenile stand management in forestry throughout boreal conifer forests by rethinking the seasonal workforce allocation.

• Uotila, Natural Resources Institute Finland (Luke), Natural resources, Juntintie 154, FI-77600 Suonenjoki, Finland E-mail: karri.uotila@luke.fi
• Saksa, Natural Resources Institute Finland (Luke), Natural resources, Juntintie 154, FI-77600 Suonenjoki, Finland E-mail: timo.saksa@luke.fi

Airborne laser scanning (ALS) has been the main method for acquiring data for forest management planning in Finland and Norway in the last decade. Recently, digital aerial photogrammetry (DAP) has provided an interesting alternative, as the accuracy of stand-based estimates has been quite close to that of ALS while the costs are markedly smaller. Thus, it is important to know if the better accuracy of ALS is worth the higher costs for forest owners. In many recent studies, the value of forest inventory information in the harvest scheduling has been examined, for instance through cost-plus-loss analysis. Cost-plus-loss means that the quality of the data is accounted for in monetary terms through calculating the losses due to errors in the data in the forest management planning context. These costs are added to the inventory costs. In the current study, we compared the losses of ALS and DAP at plot level. According to the results, the data produced using DAP are as good as data produced using ALS from a decision making point of view, even though ALS is slightly more accurate. ALS is better than DAP only if the data will be used for more than 15 years before acquiring new data, and even then the difference is quite small. Thus, the increased errors in DAP do not significantly affect the results from a decision making point of view, and ALS and DAP data can be equally well recommended to the forest owners for management planning. The decision of which data to acquire, can thus be made based on the availability of the data on first hand and the costs of acquiring it on the second hand.

• Kangas, Natural Resources Institute Finland (Luke), Bioeconomy and environment, P.O. Box 68, FI-80170 Joensuu, Finland E-mail: annika.kangas@luke.fi
• Gobakken, Faculty of Environmental Sciences and Natural Resource Management, Norwegian University of Life Sciences, P.O. Box 5003, NO-1432 Ås, Norway E-mail: terje.gobakken@nmbu.no
• Puliti, Faculty of Environmental Sciences and Natural Resource Management, Norwegian University of Life Sciences, P.O. Box 5003, NO-1432 Ås, Norway E-mail: stefano.puliti@nibio.no
• Hauglin, Faculty of Environmental Sciences and Natural Resource Management, Norwegian University of Life Sciences, P.O. Box 5003, NO-1432 Ås, Norway E-mail: marius.hauglin@nmbu.no
• Naesset, Faculty of Environmental Sciences and Natural Resource Management, Norwegian University of Life Sciences, P.O. Box 5003, NO-1432 Ås, Norway E-mail: erik.naesset@nmbu.no

This study was aimed at determining the maximum cost level of artificial drying required for cost-efficient operation. This was done using a system analysis approach, in which the harvesting potential and procurement cost of alternative fuel chip production systems were compared at the stand and regional level. The accumulation and procurement cost of chipped delimbed stems from young forests were estimated within a 100 km transport distance from a hypothetical end use facility located in northern Finland. Logging and transportation costs, stumpage prices, tied up capital, dry matter losses and moisture content of harvested timber were considered in the study. Moisture content of artificially dried fuel chips made of fresh timber (55%) was set to 20%, 30% and 40% in the comparisons. Moisture content of fuel chips based on natural drying during storing was 40%. Transporting costs were calculated according to new higher permissible dimensions and weight limits for truck-trailers. The procurement cost calculations indicated that with artificial drying and by avoiding dry material losses of timber, it could be possible to reduce current costs of the prevailing procurement system based on natural drying of timber at roadside landings. The maximum cost level of artificial drying ranged between 1.2–3.2 € MWh^–1 depending on the supply chain, moisture content and procurement volume of fuel chips. This cost margin corresponds to, e.g., organization, forwarding and transportation costs or stumpage price of delimbed stems.

• Laitila, Natural Resources Institute Finland (Luke), Bio-based business and industry, P.O. Box 68, FI-80101 Joensuu, Finland E-mail: juha.laitila@luke.fi
• Ahtikoski, Natural Resources Institute Finland (Luke), Management and Production of Renewable Resources, Paavo Havaksen tie 3, FI-90570 Oulu, Finland E-mail: anssi.ahtikoski@luke.fi
• Repola, Natural Resources Institute Finland (Luke), Management and Production of Renewable Resources, Eteläranta 55, FI-96300 Rovaniemi, Finland E-mail: jaakko.repola@luke.fi
• Routa, Natural Resources Institute Finland (Luke), Bio-based business and industry, P.O. Box 68, FI-80101 Joensuu, Finland E-mail: johanna.routa@luke.fi

• Laine, Finnish Forest Research Institute (METLA), Suonenjoki Unit, Juntintie 154, FI-77600 Suonenjoki, Finland E-mail: tiina.laine@metla.fi
• Saarinen, Finnish Forest Research Institute (METLA), Suonenjoki Unit, Juntintie 154, FI-77600 Suonenjoki, Finland E-mail: veli-matti.saarinen@metla.fi

• Ersson, Department of Forest Biomaterials and Technology, SLU, SE-90183 Umeå, Sweden E-mail: back.tomas.ersson@slu.se
• Bergsten, Department of Forest Biomaterials and Technology, SLU, SE-90183 Umeå, Sweden E-mail: urban.bergsten@slu.se
• Lindroos, Department of Forest Biomaterials and Technology, SLU, SE-90183 Umeå, Sweden E-mail: ola.lindroos@slu.se

• Uotila, Finnish Forest Research Institute, Suonenjoki Unit, Juntintie 154, FI-77600 Suonenjoki, Finland E-mail: karri.uotila@metla.fi
• Rantala, Metsä Group, Tampere, Finland E-mail: juho.rantala@metsagroup.com
• Saksa, Finnish Forest Research Institute, Suonenjoki Unit, Juntintie 154, FI-77600 Suonenjoki, Finland E-mail: timo.saksa@metla.fi

• Hautamäki, Finnish Forest Research Institute, Joensuu Unit, P.O. Box 68, FI-80101 Joensuu, Finland E-mail: sh@nn.fi
• Mutanen, Finnish Forest Research Institute, Joensuu Unit, P.O. Box 68, FI-80101 Joensuu, Finland E-mail: antti.mutanen@metla.fi
• Viitanen, Finnish Forest Research Institute, Joensuu Unit, P.O. Box 68, FI-80101 Joensuu, Finland E-mail: jv@nn.fi

• Ersson, Swedish University of Agricultural Sciences, Department of Forest Resource Management, SE-90183 Umeå, Sweden E-mail: back.tomas.ersson@slu.se
• Bergsten, Swedish University of Agricultural Sciences, Department of Forest Resource Management, SE-90183 Umeå, Sweden E-mail: ub@nn.se
• Lindroos, Swedish University of Agricultural Sciences, Department of Forest Resource Management, SE-90183 Umeå, Sweden E-mail: ol@nn.se

• Rantala, Finnish Forest Research Institute, Juntintie 154, FI-77600 Suonenjoki, Finland E-mail: juho.rantala@metla.fi
• Laine, Finnish Forest Research Institute, Juntintie 154, FI-77600 Suonenjoki, Finland E-mail: tl@nn.fi

• Windisch, Finnish Forest Research Institute, Joensuu Research Unit, Yliopistokatu 6, P.O. Box 68, FI-80101 Joensuu, Finland E-mail: johannes.windisch@metla.fi
• Sikanen, University of Eastern Finland, School of Forest Science, Yliopistokatu 7, P.O. Box 111, FI-80101 Joensuu, Finland E-mail: ls@nn.fi
• Röser, Finnish Forest Research Institute, Joensuu Research Unit, Yliopistokatu 6, P.O. Box 68, FI-80101 Joensuu, Finland E-mail: dr@nn.fi
• Gritten, University of Eastern Finland, School of Forest Science, Yliopistokatu 7, P.O. Box 111, FI-80101 Joensuu, Finland E-mail: dg@nn.fi

• Gan, Department of Ecosystem Science and Management, Texas A&M University, Texas, USA E-mail: j-gan@tamu.edu
• Smith, Faculty of Forestry, University of Toronto, Ontario, Canada E-mail: cts@nn.ca

• Oikari, Karelwood, Kontiolahti, Finland E-mail: markku.oikari@karelwood.com
• Kärhä, Metsäteho Oy, Helsinki, Finland E-mail: kk@nn.fi
• Palander, University of Eastern Finland, Faculty of Science and Forestry, Joensuu, Finland E-mail: tp@nn.fi
• Pajuoja, Metsäteho Oy, Helsinki, Finland E-mail: hp@nn.fi
• Ovaskainen, University of Eastern Finland, Faculty of Science and Forestry, Joensuu, Finland E-mail: ho@nn.fi

• Belbo, Norwegian Forest and Landscape Institute, Box 115, 1431 Ås, Norway E-mail: helmer.belbo@skogoglandskap.no

• Nurminen, Metsätoimisto Tuomo Nurminen, Joensuuntie 5 B 8, FI-41800 Korpilahti, Finland E-mail: tn@nn.fi
• Korpunen, Finnish Forest Research Institute, Parkano Research Unit, Kaironiementie 54, FI-39700 Parkano, Finland E-mail: hk@nn.fi
• Uusitalo, Finnish Forest Research Institute, Parkano Research Unit, Kaironiementie 54, FI-39700 Parkano, Finland E-mail: ju@nn.fi

• Rantala, Finnish Forest Research Institute, Suonenjoki Research Unit, Juntintie 154, FI-77600 Suonenjoki, Finland E-mail: juho.rantala@metla.fi
• Harstela, Finnish Forest Research Institute, Suonenjoki Research Unit, Juntintie 154, FI-77600 Suonenjoki, Finland E-mail: ph@nn.fi
• Saarinen, Finnish Forest Research Institute, Suonenjoki Research Unit, Juntintie 154, FI-77600 Suonenjoki, Finland E-mail: vms@nn.fi
• Tervo, Finnish Forest Research Institute, Suonenjoki Research Unit, Juntintie 154, FI-77600 Suonenjoki, Finland E-mail: lt@nn.fi

• Laitila, Finnish Forest Research Institute, Joensuu Research Unit, Joensuu, Finland E-mail: juha.laitila@metla.fi

• Spinelli, CNR/IVALSA, Via Madonna del Piano - Palazzo F, I-50019 Sesto Fiorentino (FI), Italy E-mail: spinelli@ivalsa.cnr.it
• Nati, CNR/IVALSA, Via Madonna del Piano - Palazzo F, I-50019 Sesto Fiorentino (FI), Italy E-mail: cn@nn.it
• Magagnotti, CNR/IVALSA, Via Madonna del Piano - Palazzo F, I-50019 Sesto Fiorentino (FI), Italy E-mail: nm@nn.it

• Matero, University of Joensuu, Faculty of Forestry, P.O. Box 111, FI-80101 Joensuu, Finland E-mail: jukka.matero@joensuu.fi

• Kniivilä, University of Joensuu, Faculty of Forestry, P.O. Box 111, FIN-80101 Joensuu, Finland E-mail: matleena.kniivila@joensuu.fi
• Saastamoinen, University of Joensuu, Faculty of Forestry, P.O. Box 111, FIN-80101 Joensuu, Finland E-mail: os@nn.fi

• Glöde, SkogForsk, Uppsala Science Park, S-751 83 Uppsala, Sweden E-mail: dan.glode@skogforsk.se
• Sikström, SkogForsk, Uppsala Science Park, S-751 83 Uppsala, Sweden E-mail: us@nn.se

• Niskanen, European Forest Institute, Torikatu 34, FIN-80101 Joensuu, Finland E-mail: anssi.niskanen@efi.fi

• Gschwantner, Federal Research and Training Centre for Forests, Natural Hazards and Landscape, Wien, Austria E-mail: thomas.gschwantner@bfw.gv.at
• Schadauer, Federal Research and Training Centre for Forests, Natural Hazards and Landscape, Wien, Austria E-mail: ks@nn.at
• Vidal, French National Forest Inventory, Nogent-sur-Vernisson, France E-mail: cv@nn.fr
• Lanz, Swiss Federal Institute for Forest, Snow and Landscape Research, Birmensdorf, Switzerland E-mail: al@nn.ch
• Tomppo, Finnish Forest Research Institute, Vantaa, Finland E-mail: et@nn.fi
• di Cosmo, Agricultural Research Council – Forest Monitoring and Planning Research Unit, Trento, Italy E-mail: ldc@nn.it
• Robert, French National Forest Inventory, Nogent-sur-Vernisson, France E-mail: nr@nn.fr
• Englert Duursma, Finnish Forest Research Institute, Vantaa, Finland E-mail: ded@nn.fi
• Lawrence, Northern Research Station, Roslin, Midlothian, Great Britain E-mail: ml@nn.uk

• Zhang, School of Forestry & Wildlife Sciences, Auburn University, AL 36849-5418, USA E-mail: yaoqi.zhang@auburn.edu
• Zhang, School of Forestry & Wildlife Sciences, Auburn University, AL 36849-5418, USA E-mail: dz@nn.us
• Schelhas, Southern Research Station, USDA Forest Service, Tuskegee University, AL, USA E-mail: js@nn.us

• Kärhä, Stora Enso Wood Supply Finland, Talvikkitie 40 C, FI-01300 Vantaa, Finland E-mail: kalle.karha@storaenso.com