Current issue: 57(1)
Under compilation: 57(2)
The result of forest valuation depends heavily on the interest rate and hence determining the rate of interest for forest is the one of the most important tasks of forest valuation.
When defining the interest rate for forests, we need to take into account not only the common interest rate in the country, but also other factors. Those are for example the increase in timber price. By calculating the land expectation value we assume that costs for felling, regeneration and other management will rise by same percent.
The article presents the common formula of land expectation value and discusses its pros and cons. Because of the bad condition of Finnish forests, the forest valuation has not been used widely in practice and hence also the research on theme has been minor. The development of the forests in future will make the theme more relevant.
The volume 34 of Acta Forestalia Fennica is a jubileum publication of professor Aimo Kaarlo Cajander.
Timber production and profitability were evaluated for spontaneously-regenerated mixtures on two formerly clearcut areas. The abandoned areas developed into birch-dominated (Betula pendula Roth and Betula pubescens Ehrh.) stands with successional ingrowth of Norway spruce (Picea abies (L.) H. Karst.). An experiment with randomized treatments within blocks was established, using three management strategies and one unthinned control, resulting in variation in optimal rotation age, merchantable volume and species composition. The management strategies were evaluated based on total production (volume) by using measured growth data 42 years after clearcutting and the modelled future stand development. The long-term effects of spontaneous regeneration and management strategies were evaluated based on land expectation value (LEV) and compared with a fifth management strategy using artificial regeneration and intense thinnings. 12 years after treatment, at a stand age of 42 years, the unthinned control had produced the highest total stem volume. At interest rates of 2% or higher, the unmanaged forest was an economically viable strategy, even compared to an intensive management strategy with a preferred merchantable timber species. Interest rates clearly impacted the profitability of the different management strategies. This study shows that when spontaneous regeneration is successful and dense, the first competition release can have a high impact on the development of future crop trees and on the species mixture.