Financial Analysis of Fuel 

Treatments on National Forests 

in the Western United States

Roger D. Fight and R. James Barbour 1

United States 

Department of 

Agriculture

Forest Service

Pacific Northwest 

Research Station

Research Note

PNW-RN-555

December 2006

Abstract

The purpose of this note is to provide a starting point for discussion of fire hazard 

reduction treatments that meet the full range of management objectives, including budget priorities. Thoughtful design requires an understanding not only of 

the physical and biological outcomes, but also the costs and potential revenues of 

applying variations of fire hazard reduction treatments in a wide range of stand 

conditions. This analysis was done with My Fuel Treatment Planner software and 

provides estimates of cost and net revenue from fire hazard reduction treatments on 

18 dry forest stands from 9 national forests in the Western United States. The data 

and software tools used in this analysis are all available, so these analyses can be 

easily modified to address a wider range of treatments and conditions. 

Keywords: Financial analysis, silviculture, fire, prescriptions, economics, fuel 

treatments, national forests. 

Introduction

The fuels synthesis project (Graham and McCaffrey 2005) set out to provide 

integrated information and a set of tools to help fuel treatment planners access 

the available scientific information that would be useful for doing National Environmental Policy Act planning for fuel treatment projects. This note provides a 

financial analysis of fuel reduction treatments on nine forests in the Western United 

States. We describe a range of treatment intensities that illustrate the financial 

impacts associated with removing increasing numbers and larger trees. Where 

merchantable trees are cut, the potential exists for offsetting at least a part of the 

1 Roger D. Fight is a research forest economist (retired) and R. James Barbour is a research 

forest products technologist, Forestry Sciences Laboratory, P.O. Box 3890, Portland, OR 

97208.
research Note PNW-Rn-555

cost of fuel hazard reduction.2 These stands represent conditions that commonly 

exist on the respective forests, but they are not a representative sample of conditions. We therefore do not make any comparisons between forests or regions and 

only report averages for the treatments that were applied. 

Analysis Assumptions

The following tabulation provides a list of the forests, regions, and number of 

stands that were included in this financial analysis.

Region National forest Number of stands

Northern Bitterroot 2

Northern Gallatin 1

Northern Lewis and Clark 2

Intermountain Payette 3

Pacific Southwest Plumas 3

Pacific Southwest Sierra 1

Pacific Northwest Deschutes 3

Pacific Northwest Malheur 1

Pacific Northwest Okanogan 2

There are four levels of thinning from below: leaving 50, 100, 200, or 300 trees 

per acre. There is a size limit of 18 in diameter at breast height (d.b.h.) that in some 

cases prevents thinning to 50 trees per acre. In some cases there are not enough 

trees available to apply a thinning and leave 300 trees per acre. Each level of thinning has two postthinning treatments: broadcast burning and machine piling and 

burning. This combination results in a maximum of eight treatments for each stand.

Markets for logs and chips vary widely in the Western United States. These 

analyses were done with delivered log prices for the area where the stands exist. 

This provides an overview of the financial cost (or return where revenue minus 

treatment costs and hauling costs are positive) of doing fuel reduction treatments. 

Those who want to use this analysis as a starting point for estimating financial 

cost for their circumstances need to use stands and markets that are similar to 

their situation. One strategy is to pick one of the example stands that is similar and 

customize the market information. The Web site from which My Fuel Treatment 

2 The stands and prescriptions used in this analysis were selected and provided by Morris C. 

Johnson, USDA Forest Service, Pacific Northwest Research Station, Pacific Wildland Fire 

Sciences Laboratory, 400 N 34th Street, Suite 201, Seattle, WA 98103. The effects of these 

treatments on forest structure and fire hazard are addressed in Guide to Fuel Treatments in 

Dry Forests of the Western United States: Assessing Stand Structure and Fire Hazard by Morris C. Johnson, David L. Peterson, and Crystal L. Raymond. Unpublished manuscript. On file 

with: Jamie Barbour, Forestry Sciences Laboratory, P.O. Box 3890, Portland, OR 97208.
Financial Analysis of Fuel Treatments on National Forests in the Western United States



Planner (MyFTP) software (Biesecker and Fight 2006) and documentation can be 

downloaded (http://www.fs.fed.us/pnw/data/myftp/myftp_home.htm) also has one 

saved MyFTP scenario for each of the national forests that is included in this analysis. When an example scenario is opened in MyFTP, the market information and the 

management assumptions will be available for modification. All of the stand input 

files are also available from the Web site, so the modified market and management 

assumptions can be applied to any of the scenarios by running the stand files in 

MyFTP with those assumptions.

For all forests, only trees that are 8 in d.b.h. or more are made into merchantable logs and sold. The minimum merchantable log diameter is 6 in inside bark 

diameter on the small end (top of tree) in the three Pacific Coast States and 4 in 

inside bark diameter elsewhere. The 4-in limit is of necessity because of model 

limitations rather than reflecting a difference in markets. Even where the limit is 

4 in, only logs 6 in and larger receive a price. 

The following tabulation shows the price ranges for logs delivered to a mill for 

most of the species found in the scenarios. Prices are in dollars per thousand board 

feet, Scribner scale. In some cases a single price is used for all logs 6 in and larger. 

In other cases larger logs have a higher price.

Price Poderosa pine 1 Douglas-fir	 True firs	 Lodgepole pine

Lowest price 275 370 321 265

Highest price 525 465 360 434

1 See “Species List” for scientific names of species.

Smaller trees can be converted to clean chips (for pulp or board products) or 

dirty chips (for fuel) where markets exist. The tops of larger trees can be converted 

to dirty chips. Markets for both clean and dirty chips are widely scattered. The following tabulation shows the number of forests and scenarios for which there were 

chip markets available and included in the analysis.

Chip type Number of forests Number of scenerios

No chips 5 9

Clean chips 2 5

Dirty chips 2 4

Because markets are highly variable across the West, the distances that logs and 

chips must be hauled to a market are also highly variable. Haul distances for logs 

ranged from a low of 60 to a high of 130 mi. Haul distances for chips ranged from 

15 to 80 mi. The shorter haul distances for chips does not mean that chip markets 
research Note PNW-Rn-555



are more ubiquitous than log markets, but rather that it is not feasible to haul a lowvalue product like chips longer distances.

The stands included in the analysis had a range of slopes from 10 to 40 

percent. The logging system used in all cases was a ground-based mechanical whole-tree system. The tops and limbs were chipped in those cases 

where there was a market for dirty chips. In other cases, tops and limbs were 

included in the material that was treated onsite with machine piling and 

burning or broadcast burning. 

Results

The merchantable volume, gross revenue, harvesting cost, and hauling cost do not 

change with the postthinning treatments (machine pile and burn versus broadcast 

burn). Figure 1 shows the average merchantable log volume for the four thinning 

prescriptions applied to the 18 stands. On average, the log volume with 50 leave 

trees is almost three times the volume with 100 leave trees. With 200 leave trees, 

there were very few saw logs. None of the stands had any trees large enough to 

yield merchantable logs with 300 leave trees. 

Figure 2 shows the average gross revenue for the four thinning prescriptions. 

The average gross revenue with 50 leave trees was over three times that for 100 

leave trees. The gross revenue is almost proportional to volume because most of 

the revenue is from saw logs, and the premiums for larger logs are small. The small 

amount of gross revenue for the prescription with 300 leave trees is solely from 

chips on the stands that had a chip market.

Figure 3 shows the average harvesting cost for the four thinning prescriptions. 

Note that the harvesting cost for the prescription with 100 leave trees is about half 

that for 50 leave trees even though the log volume is only about one-third as much. 

This is because the trees removed from prescriptions with 100 leave trees are on 

average smaller and more costly to harvest.

Figure 4 shows the average hauling cost for the four thinning prescriptions. Patterns in hauling costs look similar to patterns in volumes—higher volume removed 

require higher hauling costs. They differ somewhat because the volume shown in 

figure 1 is only log volume, whereas haul costs in figure 4 include costs for chip 

volume. The haul cost per unit volume, however, is generally less for chips because 

the haul distances are shorter. 

Figures 5 and 6 show the mechanical treatment and burning costs, respectively. 

The following tabulation defines the combinations of prescription and fuel treatment for the remaining figures.
Financial Analysis of Fuel Treatments on National Forests in the Western United States

0

2

4

6

8

10

50 100 200 300

Thinning prescription (trees per acre)

Log volume (hundred cubic feet per acre)

Figure 1—Average merchantable volume from thinning from below to 50, 100, 200, and 300 trees per acre.

Categories	 	 Prescription	 	 Fuel Treatment

1 50 Mechanical pile and burn

2 100 Mechanical pile and burn

3 200 Mechanical pile and burn

4 300 Mechanical pile and burn

5 50 Broadcast burn

6 100 Broadcast burn

7 200 Broadcast burn

8 300 Broadcast burn
research Note PNW-Rn-555

0

200

400

600

800

1,000

50 100 200 300

Thinning prescription (trees per acre)

Harvest cost (dollars per acre)

Figure 3—Average harvesting cost for thinning from below to 50, 100, 200, and 300 trees per acre.

0

500

1,000

1,500

2,000

50 100 200 300

Thinning prescription (trees per acre)

Gross revenue (dollars per acre)

Figure 2—Average gross revenue from thinning from below to 50, 100, 200, and 300 trees per acre.
Financial Analysis of Fuel Treatments on National Forests in the Western United States



0

200

400

600

800

50 100 200 300

Thinning prescription (trees per acre)

Hauling cost (dollars per acre)

Figure 4—Average hauling cost for thinning from below to 50, 100, 200, and 300 trees per acre.

0

50

100

150

200

1 2 3 4 5 6 7 8

Prescription-fuel combination

Mechanical treatment cost (dollars per acre)

Figure 5—Average mechanical treatment cost for thinning from below to 50, 100, 200, and 300 trees per acre with machine piling and 

burning (categories 1, 2, 3, and 4, respectively). Mechanical treatment cost is zero for broadcast burning scenarios.
research Note PNW-Rn-555



-600

-400

-200

0

1 2 3 4 5 6 7

8

Prescription-fuel treatment combination

Net revenue (dollars per acre)

Figure 7—Average net revenue from thinning from below to 50, 100, 200, and 300 trees per acre with machine piling and burning 

(categories 1, 2, 3, and 4, respectively) and broadcast burning (categories 5, 6, 7, and 8, respectively). 

0

50

100

150

1 2 3 4 5 6 7 8

Bu

Prescription-fuel treatment combination

rning [fire] costs (dollars per acre)

Figure 6—Average prescribed fire cost for thinning from below to 50, 100, 200, and 300 trees per acre with machine piling and burning 

(categories 1, 2, 3, and 4, respectively) and broadcast burning (categories 5, 6, 7, and 8, respectively).
Financial Analysis of Fuel Treatments on National Forests in the Western United States



The model on which these figures are based is relatively better at predicting 

the average cost for commonly applied thinning treatments than it is at predicting 

differences in cost for different intensities of thinning. So although these costs do 

not differ much between the thinning prescriptions, they will likely show greater 

differences in application. 

The right half of figure 6 shows the costs for broadcast burning. The same 

caveat applies. The model is relatively better at predicting the average cost for 

commonly applied treatments than it is at predicting differences in cost for different 

intensities of thinning. 

From this full analysis there were 2 cases out of 69 where the cost of machine 

piling and burning was less than broadcast burning. The broad conclusion is that 

the cost of broadcast burning is about half that for machine piling and burning. But 

this conclusion is only valid to the extent that it is feasible to apply either treatment. The detailed fire behavior information (see footnote 2) should provide the 

data needed to determine if broadcast burning can be applied in the conditions that 

result from the thinning treatments or if some mechanical treatment may be necessary first to reduce the risk of fires that are undesirably hot or have an unacceptable risk of escape. Furthermore, the risk of escape and subsequent damage from 

wildfire is likely higher with broadcast burning than with burning piles. The cost of 

escaped fires has not been included in these estimates of burning costs. 

Average net revenue for a category (the average of all cases for a given combination of prescription and fuel treatment) is the best indicator of the revenue that 

would be generated from doing these treatments or the cost that would have to 

be expended (see fig. 7). These net revenue figures are underestimates of the full 

cost because they are only the costs of applying the treatments and do not include 

agency costs for planning, preparing, or administering these contracts. From the 

total set of treatments applied to the 18 stands, there are 6 cases out of 138 where 

the net revenue is positive. As shown in figure 7, the average net revenue ranges 

from -$139 to -$444 per acre. The machine pile and burn series on the left and 

the broadcast burn series on the right show similar patterns. The prescription that 

leaves 100 trees per acre is on average the most expensive. Leaving 50 trees has 

higher net revenue than leaving 100 trees. This is because the additional 50 cut 

trees are larger trees that more than pay their way and reduce the total cost. From a 

purely financial standpoint, the conclusion would be that unless one is prepared to 

thin heavily enough to remove a significant amount of merchantable logs, it would 

be less costly to do a minimal treatment that involves no removal. Leaving 200 and 

300 trees per acre may not result in a significant reduction in fire risk, however.
research Note PNW-Rn-555

10

Conclusions

We must be cautious about drawing conclusion from a set of mechanistic thinnings 

applied to a small number of stands. Although these results revealed few opportunities for commercial products to pay for the full treatment cost, they do reveal that in 

12 of 18 cases, the removal down to 50 leave trees reduces the cost relative to 100 

leave trees. The prescriptions in this analysis are a small part of the set of prescriptions that have been proposed in various venues to respond to the issue of undesirable fire hazard. The greater value of this analysis and the files that are available 

from this analysis may be in providing a starting point for additional analyses to 

explore a wider range of options. 

Metric Equivalents

When you know:	 Multiply by:	 To find:

Inches (in) 2.54 Centimeters

Acres (ac) .405 Hectares

Feet (ft) .3048 Meters

Miles (mi) 1.609 Kilometers

Cubic feet (ft2) .0283 Cubic meters

Literature Cited

Biesecker, R.L.; Fight, R.D. 2006. My fuel treatment planner: a users guide. Gen. 

Tech. Rep. PNW-GTR-663. Portland, OR: U.S. Department of Agriculture, 

Forest Service, Pacific Northwest Research Station. 31 p.

Graham, R.T.; McCraffrey, S.M. 2005. Fact sheet: the fuel synthesis overview. 

Res. Note RMRS-RN-19-WWW Revised. Fort Collins, CO: U.S. Department of 

Agruculture, Forest Service, Rocky Mountain Research Station. 2 p.

Species List

Common name	 Scientific Name

Douglas-fir  Pseudostuga menziesii (Mirb.) Franco

Lodgepole pine Pinus contorta Dougl. ex Loud.

Ponderosa pine Pinus ponderosa P. & C. Lawson

True fir Abies spp.
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