Any long term investment has risks. A commonly used procedure for taking forestry risk into account is to make adjustments to the interest rate, also known as the discount rate. In addition, a landowner has a variety of management options on species selection and merchantable product. In this example we use slash pine since it is the most commonly grown tree species in North Florida, and there is a strong market for its products. Two different silvicultural regimes are shown to illustrate differences in returns using different production and harvest schedules.
Any investment analysis relies to some extent on assumptions.
Due to the complexities of long term investments such as forestry many of these assumptions may be no better than educated guesses. Land Land value is not included since we are interested only in the annual return to the timber resource. Land alone is considered a good investment because of rising prices. Whether land is purchased or already owned, timber production is considered another investment and should be treated differently. The major costs in establishing a pine plantation are preparing the site, buying the seedlings and planting services.