Volume and value growth of hardwood trees in Wisconsin.

The volume of healthy trees of commercial size in the maple-birch forest type measured uring the last two Forest Inventory Analysis urveys of Wisconsin grew at 2 to 3%/yrfor sawtimber, and 3 to 4%for poletimber, with substantial differences among species. However, from 1967 to 1989, the real price of logs decreased or remained constant for most grades and species. The decrease was especially large for high grade logs. The only exceptions were red oak and elm, whose prices increased at i to 2 %/yr, for all grades. As a result, the average value growth rate of the trees that did not improve in grade was a modest 2%/yr, and not different from zero at a 5% significance level. Holding high grade trees led to substantial osses. Red oak and elm provided good returns because offavorable price trends, and quaking aspen because of its fast volume growth. Among the worst financial performers were hard and soft maple and yellow birch, the most numerous trees in the sample. A simple equation was derived to predict volume growth rates as a function of tree diameter, site index, crown ratio, stand basal area, crown dominance, and tree species. Although these variables did influence volume growth, suggesting that silvicultural practices could be beneficial, they explained only a small part of volume growth, and less of value growth. The future of commercial fores,try inWisconsin depends at least as much on policies that will develop markets and obtain good prices as on improved silviculture. North. J. Appl. For. 10(2): 63-69. Within the forests of Wisconsin, the most important type ishe maple-basswood-birch forest (also called the northern hardwoods, or maple-birch type), which covers 27% (4 million ac) of the total commercial forest area. Three fourths of this forest is privately owned (Ralley 1985) by individuals who have varied reasons for managing (or not managing) their forests (Bliss and Martin 1988). This paper deals only with the economic motive: the financial returns from growing live and healthy trees over long periods of time. The purpose is to provide information on past rates of return and thus to allow better inference about what the returns might be in the future. The paper is organized as follows. First, we summarize the rates of volume growth of hardwood trees, of various pecies and size, between the last two forest inventories of Wisconsin. Next, we present data on the rates of change in log prices that have occurred during the past 20 yr. Volume growth and price changes are then used to determine past value growth rates of single trees by species, ize, and grade. To help in management decisions, an equation is then presented to predict he annual volume growth rate of a tree as a function of its characteristics and those of the stand in which it grows. This equation, together with price trends, can be used to decide whether atree is earning No•: The research leading to this paper was supported in part by MclntireStennis project 2855, by the Graduate School, and by the School of Natural Resources, University of Wisconsin, Madison. We thank M. H. Hansen, USDA Forest Service, North Central Forest Experiment Station for his assistance in reading and interpreting the FIA data files. a rate of return appropriate for the owner, and should be left to grow, or whether it should be replaced by a younger tree. Volume Growth Rates of Trees The measurements used to determine the rate of growth in volume of individual hardwood trees in Wisconsin came from the database of the Forest Inventory and Analysis (FIA) research work unit at the USDA Forest Service North Central Forest Experiment Station (Hahn and Hansen 1985). The trees belonged to 613 random plots representative of the northern hardwood type in Wisconsin. The majority of the plots (440) were located in the northern pan of the state. This study dealt with "growing-stock" trees only, i.e., live trees of commercial species and size, identified as desirable and acceptable, xcluding rough, rotten, and dead trees. Furthermore, only trees that had been measured twice were used. All measurements were done between 1966 and 1984. The interval between the two successive measurements on permanent plots ranged from 6 to 16 yr. Both poletimber and sawtimber sizes were considered. However the trees that grew from poletimber to sawtimber between the two measurements were not used. Their volume growth rate was not defined, due to the change of product from pulpwood to sawtimber. The results are based on the measurements of 3801 trees: 2398 of pole size and 1403 of sawtimber size. The average annual rate of growth in volume of each tree was estimated from