By Alan Page, Green Diamond Systems (This page is under revision in light of recent financial realities.)
An Economics primer: Our human economy operates within the larger global ecological economy. Human economies in the "developed" countries of the globe function through the exchange of currency within a money economy. Our money economy and the economists who study it have simplified the choices of producers and buyers by claiming to reduce all exchanges to the "price" of items to be traded. This works well only where all "costs" are known and where all these costs are included in the offered "price" of an item of trade. Unfortunately, businesses of all sizes routinely seek situations where others bear significant portions of their costs. Other costs that can not be officially born by others are avoided, forgotten, or denied. A complicating factor for "long term" producers is the expectation of lenders that money (capital) should "grow" forever at a compounded rate. The reality of compounding money assets provides the human economy with very effective tools to insure that "short term" projects are more likely to be profitable than longer-term activities. The "costs" of short-term projects are easier to identify and the "returns" can be predicted with greater confidence. The human economy of the developed world has recently broadened the base of buyer choice by treating all commodities having similar utility as substitutes regardless of where they are produced. This has lead to the "global economy" and an explosion of uncounted costs (externalities), and the destruction of many "local" economies.
White pine is a commodity that has been traded in the global economy for over 350 years. Other soft white “materials” are now used as white pine substitutes wherever they cost less than local production in the global market. Fortunately shipping such commodities is difficult because of the propensity for staining or damage. High quality white pine requires at least 35 years to develop so it qualifies as a long term asset. Growing marketable white pine in less than 50 years requires that the trees grow fast. Fast grown trees need to be pruned for there to be much material worth enough to actually pay for the practices needed to care for such trees.
The recent deployment of “certification” systems have not helped local producers because they fail to recognize the use of fossil fuels in production and shipping as significant ecological dangers. Thus the cheapest "certified" material may have large unaccounted impacts on climate stability and other sensitive parts of the global ecosystem. Nor have these "certification" systems recognized the need for all timber producers to be paid a fair price for all the intangible factors that accrue from growing a timber crop. In deed, industrial certification such as the Tree Farm System's SFI requires that an owner have already given these assets to the common good before the owner's “Certified Tree Farm” status is approved.
Even more devastating is the calculated destruction of the economies of undeveloped countries for the benefit of the supra-national corporations and foreign investors. These practices, described by Joseph Stiglitz, Columbia University Professor of International Economics, set a long term (downward trending) base-level for the value of labor and raw materials – white pine included. In that perspective you would be prudent to consider whether you wish to be a long term white pine producer.
White Pine Management Systems: Common methods of managing white pine fall into three main categories. These three systems have varying levels of reward for the implementation of the required steps to form a harvestable product over time. They are ranked from low to high value produced per acre:
1) The NO Thought System:
High grading (/ no technical analysis of the forest) as is practiced in most normal logging operations. Yields the normal regionally reported stumpage value.
2) Stacking small logs in one tree:
This tall tree system relies on intentional growth of small diameter and/or small knotted trees with low capital inputs. This system requires long time horizons, a lack of invasive agents like the pine canker, pine blister rust, and white pine weevil, and luck. The outcome of this style of management can provide slightly to significantly higher returns than normal. This method is practiced by many large landowners that have little invested in the land and are not willing to move the land into the retail market.
3) Growing clear and red knotted lumber on crop trees:
This labor and capital intensive system involves intentional and accelerated growth of crop trees. The clear portion of the lower stem yields high value clear lumber and/or wide, small-red-knotted boards. The longer foliated upper portion of the stem yields red knotted lumber. In this system crop trees are chosen for pruning, thinning is used to concentrate the growth on these superior trees. Such a system requires medium to long time horizons, regular effective stand manipulation, and yields much higher returns than any other management alternatives.
It should be noted that unlike the previous two systems the last category may be very sensitive to failure to carry out needed steps on time. Control of many factors is needed to assure success. Included in the list of "must dos" are:
1)control of damage to the residual stand,
2)early establishment of acceptable crop tree form,
3)regular removal of all dead branches before the pruned stem exceeds 8" in diameter,
4)thinning to keep the upper branches (above an upper pruned height - 16 to 20') alive, and
5)regular monitoring of the health of both overstory trees and advance regeneration.
Superior quality wood will develop in future crop trees treated with these practices. Stand volume growth will be maintained at a level that multiplies the volume yield by the higher unit values of superior products from both the clear and the red knotted upper wood. However, accelerated diameter growth on trees that have not been treated properly may cause most of the tree or stand to have values at or below that paid for the high graded stand. Thus it can be argued that whatever an owner does or does not do will cause the end result to fall within one of the above general categories. Even if the actions of a given owner seem to include all of the right steps; if the practices are ineffectively applied or staged at inappropriate times, the net result will also tend toward the results of one of the lower of these categories.
What does effective management of white pine require?
4.Frequent in stand physical activity
5.Markets for more than just high grade pine.
6.Long term stability / suitability of the land asset for growing pine
7.Belief that the future climate (economic and ecologic) can be predicted
Capital: Why is it that many of the largest forest owners have recently divested themselves of land holdings? Is it because they are unaware of the opportunities of higher intensity management? Do they need the funds in other parts of their operations? Or, can they make a better personal return for themselves by putting their money to work on shorter term alternatives or on lower cost land elsewhere? Capital must be available not only for the purchase of the property, but also for the analysis of the performance of the current and future stands, and for continued investment in practices that work toward the stated goal.
Knowledge: Knowledge comes in many forms, projected stand performance, site potential, market needs, what is needed to turn the capabilities of the stand into actual stand performance, methods of teaching and control of personnel and equipment to economically and ecologically arrive at a hoped for outcome.
Rigorous analysis: Rigorous here is used to indicate not only that the analysis is thorough going but also effective in guiding all facets of the organization toward appropriate timing and application of practices. It does not indicate that any of the analysis is controlled by standard statistical testing; only that it is appropriate and effective.
Frequent in stand physical activity: Frequent activity in pine stands is needed for a number of reasons. Not the least of which is the need to keep competent staff fit, trained and available for performance of field tasks. White pine trees move through periods during which certain activities are effective. Once one or another threshold is past the applicability of a practice changes. We are all familiar with not being able to sell a tree as timber until the tip of the first log exceeds a certain diameter. This is the threshold for marketability. A similar biological threshold is the minimum crown size needed for rapid response to thinning. Frequent activity allows the manager and the assistants to act on opportunities that they are made aware of by rigorous analysis.
Markets for more than just high grade pine: The “economic primer” set the stage on which raw material producers will have to work for the foreseeable future. Giving away anything can be economically damaging. The mills one sells timber to are looking to pay no more than they must to get the wood to their yard, If they can get it free so much the better.
Long term stability / suitability of the land asset for growing pine: Instantaneous land value is a metric that all activities must cope with. It may be necessary to be paid to own the land as some mills in this area have been recently. It is emotionally wrenching to have to sell land for other uses after one has put significant effort into growing good trees on it. This is especially true if that land has had some special place in your life. It is a common occurrence for foresters in retail land market areas to find that all their efforts must be liquidated because of escalating values that have out paced the timber value.
Belief that the future climate (economic and ecologic) can be predicted: This area is beyond our individual control. It is worth studying and asking pointed questions of your elected representatives and senators!
The following are a few more hints about what a successful white pine manager needs to add to the knowledge and rigorous analysis areas of expertise:
White pine trees are not in the business of growing wood. Rather they are designed to be very good at controlling scarce resources so that they survive and thrive through some very difficult times and eventually reproduce themselves. Thriving requires that individual trees are capable of taking advantage of any situation that is unusually favorable. Learning where the unusual performance opportunity-thresholds lie in your area will require study. Refer to "Forest Management Tools: A Guide to Forest Health - A Tree Physiology Approach" for details on many of these opportunities. I suggest that looking at unusual situations for pine growth near you will help establish where you are in the grand scheme of response potentials. It won't hurt to try some tests of the most optimistic treatments that you can come up with. Nature is very capable of providing the upper limits of stand density. So you have to look carefully for situations where regular thinning has significantly reduced the competition within a stand.
It should be helpful for a manager to find examples of exceptional growth patterns. The examples should be near the location of the managed land so that periodic comparisons can be made. What could one look for? Examples of the control mechanisms that regulate the use of resources within a tree. Find or make tree with two base stems (2-3 feet apart) by bending one of the trees to form a graft at about five to eight feet from the ground. This experimental tree should be kept "free to grow." Once the graft has taken, cut the top and branches off the bent tree. Both stems will now function as part of the straightest tree. Both lower stems will be maintained by the top of the straightest tree. This and other examples will serve to remind the manager and help convince financiers that individual trees have good control of wood formation. It is important to be regularly reminded that trees really can grow. And that well supported (by neighbors in a stand) trees will not put wood where it isn't needed. Another helpful example can be created within a group selection clearing in a stand with advance regeneration on a site that is similar to most of the land to be managed. This readily observable test should be used to watch the small saplings try to take advantage of that space. Some of them may develop 3 to 4' leaders for several years as they attempt to get equal to or free of the taller side competition. These and other mechanisms are discussed in the paper mentioned above. You are welcome to contact Green Diamond Systems if you need help in interpreting what you are seeing.
Above all remember local stock has evolved over thousands (millions) of years to be able to handle the worst conditions that occur in that area. Some of these response systems may have been specifically suppressed in seedlings from local seed sources because trees that violated those limits did not successfully reproduce in the past. It can get pretty confusing. Keep at building your own local database of what really works and use it! White pine works well with many other species as compatible partners in the management system. This will be especially true on super sites where it is hard to maintain a single species of crop tree.