Welcome to the Timber University Podcast, brought to you by Mississippi State University Extension Forestry and the University of Arkansas at Monticello's Forest Business Center. I'm Sean Tanger. And I'm Brady Self, where both forestry specialists govern topics from soils to silviculture to social sciences as they pertain to forest stewardship. In this podcast, we'll extend research findings and professional experiences that are relevant to forest landowners, consultants, loggers, and other natural resource professionals. If you fall into one of those categories, we'll help you explore historical and current sites that you can apply to your practical forestry knowledge and experiences. All right, everyone, on today's episode of Timber University, we're going to talk about a topic that is kind of the elephant in the room for a lot of people, from both a need standpoint and a lack of being able to do what you're wanting to do out there, and that's thinning, performing those first things primarily was where we're going to go in pines. And our inability to do that across a lot of the south, and I'm here in North Mississippi, so it's really bad for us, and it depends on where you're at around the south as to just how difficult those thinning options are that are out there, and those thinning applications and treatments are going to be to actually achieve on the ground. And what we want to do is start with kind of the biological needs for doing thinning, you describe what it is, and what it actually provides to you, and then move into the reasons for doing that type of work, and then move into what it does to you to prolong or to put off your thinning, and talk about that from the economic standpoints, and focus primarily this go around on what we think of traditionally from thinning, and what we're able to do there, and what it does to you to not. And then we're going to have another episode down the road, not too far in the distant future, on some alternatives doing that type of work. So traditional thinning 101, and that's what we're going to focus on this particular episode. Primarily what I want to do for the next couple of minutes here is describe what a thinning actually is, and there's this misconception by a lot of people, and I don't know that's totally a misconception, but there's a lack of understanding, I guess I should say, by a lot of people on what a thinning in a pine stand actually does, relates back to the biological processes, and what a tree actually can use to grow. And what I mean by that is people think, "Well, you're thin, and that tree is able to somehow magically just grow bigger because it doesn't have a competitor next door, and that's true to a certain extent, but it's not necessarily for the reason that people think." And that's the end that a thinning doesn't just make a tree grow because you took out something next to it. If you go far enough back into silviculture and into ecology, and you start reading the textbooks, and you start taking the classes, there are a couple of terms out there. There's gross primary productivity and net primary productivity. So gross GPP is basically the amount of growth potential a stand has, period, right? There's lots of things that go into that. There's lots of things that go out of that, depending on the site quality and what species are there, how much of vegetation is on the site, et cetera, et cetera, et cetera. NPP is the amount of, just think of it as inherent capability of a site to actually produce wood and vegetation, back away from just wood, to produce vegetation, the amount of resources and production that any particular site is going to be capable of producing after you take out the fluxes that go out with natural processes. So all things like leaching nutrients through the littering down into the soil profile out of the realm of root systems and things like that, fires that come in and burn things off et cetera. Just natural processes that remove some of that productivity. NPP is going to be the amount of that resources, that collective that's left for a tree or trees, vegetation to actually utilize and produce wood. So what thinning does is it actually increases the NPP that's available for any specific tree, right? So let's say you have 100 units of NPP and you have 100 trees, right? So you've got one unit. Well, if you remove 50 trees, now you have two units per tree. That's what we're talking about. The way that this works is an actual thinning, the intent of thinning is to redistribute that amount of a productivity that's on the site and focus it on a fewer number of trees. It's not just magic, but there's a little bit more to it than we have time to discuss here and there's a little bit more of it than the most people realize. But that's the intent of a thinning is to redistribute what's on the ground, or what the ground actually has, I guess, and put it on a fewer number of higher quality trees. It doesn't do a lot for you to know these terms, it's just kind of setting the premise of where we're going with the rest of this talk. Well, and that's right where in some cases it might appear like biological considerations and economic don't align, but with any perspective and what you just laid out there, the amount you match up perfectly, because from the economist or the money side of the management that I approach from, the crop trees are what you are growing. You're not growing first thin pulp wood material. You might be lucky enough to get some money out of that, hopefully you are, but as one of my teachers used to say, and I don't agree with this and I'll caveat it, but he was trying to be provocative, he said, "I don't care about pulp wood prices." And you say, "Well, what do you mean?" Well, it depends on the economic measure you're looking at, but if you're concerned with the return on investment, it's far more important for your crop trees to get all those resources that Brady just talked about than it is to try to goose your pulp wood price by maybe, you know, waiting a year or hoping that the mill decides to take some extra material. If those situations happen where you get a giant spike in pulp wood for some reason, the mill mismanaged or, you know, they're out of inventory for some odd reason, then it's a consideration, but a little bit of that's like winning the lottery. It's very, you don't go into managing timber with money in mind expecting to get some big blip in pulp wood prices. So you know, the real points you want there, I understand cash flow needs for a lot of landowners, but from a perspective, from a financial perspective of return on investment, protecting the quality and vigor of those crop trees up until the time that you're going to remove them from the site, that's the objective for you as the landowner. Absolutely, I will, I take no offense with what you just said, but I will say I do care about pulp prices, but not because I care about pulp prices, right? I care about pulp prices because that's how you're able to remove that material, too. It's absolutely good point, yes. And so it's, you know, without some kind of price, it's real hard to get the work done. And that's what it boils down to. And that's one of the things is why are we looking at doing a thing, you know, why do you need to do a thing? You know, nature doesn't do it. I hear that all the time, nature doesn't do pies and lines and that's true, but nature also puts down a whole lot more trees and nature will absolutely thin a natural stand or an artificially regenerated stand, you know, nature will come in and it'll do what you're not. And so our goal with thinning is to try to, you know, gain some money, some economic benefit to everything that's on site. And in an ideal world, nothing ever dies and hits the ground as a dead stem. They're able to put it on a truck and take it to the mill. Now the reality is that that's never going to happen, but you don't want mass douse in that stand. And that's what happens in a natural stand or in a plantation when you don't perform some kind of thinning. You do get death. I mean, there's natural mortality and then it stretches that rotation. And that's what we're trying to do is, you know, grow them faster. I hate to say it that way, but grow them faster to where you know, your side of the world comes in, where that money has more value in the short term or shorter term, shorter rotation than it does if you carry it out. Yeah. You have to make more. Well, and they're certainly outside of our typical region, but you know, if you've been watching the news lately, you see in that live in action at a massive scale. Yeah. And we would, and we would like to, you know, send our thoughts and prayers out to anyone affected by these fires, but it may not be all of the reason. But it's certainly a strong contributor to what we're seeing out there in terms of the wildfires. And so hopefully everybody's staying safe and, you know, hopefully from a southern perspective, we can help encourage people to get these trees thin because even if we don't get wildfire, which we can, and we do, there are other biological realities out there. And as Dr. Self said, if you don't thin those forests, there's going to be consequences. Fire could be one of them, bugs could be one, and so forth. So we really, really want you to take this seriously and not, you know, frankly be like a lot of landowners that I have to talk with on the phone when they're, they're looking for advice that, you know, hey, you need to get this stand thinned and they're stubborn about it because, well, I should get better prices. This is, they're ripping me off and, you know, that's, that's kind of irrelevant biologically. I get the, I get the, the irritation from a landowner on that, but you can cause yourself a lot of problems, you know, trying to dig in and wait for those prices. No, absolutely. And we'll let you, we'll let you go in depth into that in your hand a little while. Sure. But I absolutely 100%. Um, so to kind of the next thing I really wanted to cover is, what exactly is a thin? And yeah, as a forester and a landowner setting in a lot of cases, that, that question kind of seems a little, a little goofy, you know, a little, a little obvious. But there are a lot of people out there that really don't understand. So yeah, a thinning is simply removing a certain percentage of trees to benefit the trees that are left. And that's the big difference. It's not a, a, you know, financially driven motive behind this thing. We're looking at, and there's, well, I'll back that up by saying there's even some forms of thinning that are going to cost you money, right? They're pre-commercial. They're going to cost you some money. Your, your focus isn't on, you know, the bank account. Your focus in this, when you're performing a thinning for the right reasons is that you are trying to improve the quality of a stand that's out there. So you're removing lower diameter trees, you're moving sick trees, you're removing poor form trees, trees and inferior, you know, crown classes, et cetera, and a lot of other things that play into that, but it's not by the biological side of the world here, it is not intended to be a, necessarily, to be a, you know, financially driven treatment method. Now you can't do it for free, right? I mean, you need to bring something in, but it's not intended to be that. It's intended to improve the performance of the trees that are there that are left, the residuals, and increase the quality of the overall stand. So there's several different techniques, and you kind of can get real heady real quick when you start getting into the, you know, the actual silvicultural definitions and terminology. But some of these techniques were developed, you know, literally if you go back into the 1,000 years ago, you know, 800, 1,000 years ago into European, all silviculture and management that's to do over there, we can't do that kind of thing here, but, you know, you could biologically, on your side of the world economically, you could not. So what I wanted to do is I wanted to actually kind of throw out a few of the different types of thinning that are out there, really about five or six different from a systematic standpoint, different or method, method, I can't speak today, methodological, methodological, I'll get it out a second, viewpoint, there are really five or six different kinds of thinning that are treatments that are named. You're not going to see those used for the vast majority of the time in our world. Low thin, yeah, that's one that you'll hear thrown out there, fairly regularly. Low thinning, it's probably the oldest is Germanic in origin if you get right back down to it, and we're talking about something that was developed, you know, a millennia ago, and basically in low thinning, what we're talking about there is removing lower crown classes. So, you know, when if you go back and you talk about crown classes, you have suppressed trees, which are, you know, the crowns are underneath everything in the general canopy layer. You have intermediate trees where there are intermediate class trees where their crowns extend into the general canopy layer, then you have codominant trees where their crowns make up the level, right, you know, they make up the level of that canopy. And then you have dominant trees, which their crowns actually extend either totally above or almost out of the codominant strata, and low thins were designed to take trees that were in that suppressed and intermediate class. You start down low and you're taking the smallest, you know, we're talking about height here, but typically within a species, the shorter the tree, the smaller the diameter, doesn't play across when you start talking about different species necessarily. But you know, the shorter trees are what you're pulling out of those crowns and you remove them until you get to a certain targeted either trees per acre or some measure of, you know, some other measure of density, whether it's you, you know, SDI curve or whether it's basilaria or whatever, you're taking trees from the bottom and you're getting it to a certain point where you have the total number of trees that you wanted, right? There's crown thins, which is, I should know this, I want to think, I think it's French in origin. If you go far enough back, crown thinning was basically where you remove trees that are in the middle and the upper classes. So what you're doing is your favor and the dominance and the codominants, but you're removing, you're just ignoring, you're not paying any attention to trees in that suppress or that intermediate strat, at that level in the strat, in the overall canopy, you're just taking from the, from the top and you get into some situations there where, I'm not going to say it's hard to do, but you're still leaving a lot of material there that's probably going to die out anyway, right? So in a pine stand, you're suppressed, you're intermediate trees, that's the ones that are going to drop out from a natural standpoint, they're going to shade out and you're not capitalizing on their worth. So you're leaving some things in there. You don't see crown thinning used too much selection thins. That's kind of the old one that it depends on who you are. We used a lot of selection thins in the past in hardwoods and you'll hear it called a diameter limit cut. So what, what a selection thing and granted, you know, you hear selectively thinners, that's a different thing, right? We're talking pure silvicultural term here, selection thin was a system where we set a diameter limit. So, you know, a stump diameter, 15 inches, you know, that was kind of the old standard for a lot of hardwood silviculture, at least in Mississippi, and hard to call it silviculture, hardwood log in Mississippi, and anything that had a stump diameter, 15 inches or above was taken out. So obviously you're taking out your bigger trees and that's favoring those suppressed and intermediate classes, high gradens, what you're going to hear it called by a lot of old heads, you know, in hardwood forestry, in a pine silviculture as well, but when you start talking about selection thins, it's one that we don't really recommend for the most part. Where it comes into its own is where you have multiple species in a stand. So you're taking the bigger trees out to favor the smaller trees because that smaller tree is, it's either goal oriented, you know, management from a goal oriented standpoint you're trying to get a different species to wind up being your, you know, your species that moves in and takes over the, takes over that particular track of ground, or you're looking at a species that you just want for some management purpose, whether it be wildlife oriented or whatever, from a pure, from a pine standpoint, you're never going to see selection thins really recommended by true silviculture person. What happens is it does generate income, right? You definitely, I mean, you're taking the best and leaving the rest, right? So the logger doesn't have to give you a lower average for removing that smaller material. So you're making more money per unit, but you decrease genetics, you urge the genetic quality in a stand because you're, you're taking the best, right? You're taking your performers, you're taking the, what we would typically think of as crop trees. And it's typically going to leave you with a stand that is, has set there, I don't know the right way to couch that you're, it's leaving you with residual trees that have had to fight long time, so the risk that you run with that is they're closer to just dropping out on you. Anyway, it's possible to have increased loss after a logging job because you're doing some damage when you're logging to it, right? So it's, it's possible that your, your residual trees are going to be, well, they're already lower vigor unless they're different species, but that you have reduced their vigor and their ability to continue growing and you can see in some cases, a bump and mortality of those trees after you've taken the best. So taking the best trees, now you take, now, now nature comes in and says, well, you hurt me and I was already weak and I'm dropping out by some of those suppressed and intermediate. Then there's mechanical thinning, mechanical thinning is going to be something that most of us are more familiar with, and it's, you think about rothean and impines, right? It can be spacing and you're just mechanically thinned by it. You set up a grid and you're cutting trees and you leave a tree every 25 feet or whatever your arbitrary number is, but typically we think of it as rothean and then that's, that's it. I mean, it's geometric. That's what mechanical thinning is, definitely some pros, it makes equipment access easy and makes your selections that you're pulling out a lot easier, but there's no control for genetics in that. You're purely working on, or quality. You're purely working on a pattern and that's what it is. So you think about the rothean and pines, you know, a logger loves an ever other or ever third row, right? They take it out and they move on about their business. A forester likes a fourth or a fifth row thin, because yeah, I mean, you have to have equipment access, but with, like I said, take a fifth row thin, a fifth row, you're automatically you're moving 20% of the trees. It doesn't matter if they're the best or if they're the worst, you just automatically take 20% of the trees out versus a third row, you're taking 33% of the trees out without any control over what quality you're taking or what quality you're leaving. So you know, you get into those fourth and fifth rows, we like it on the forester side, you get into the two, which is kind of rare, but three row of the ends, which is pretty common, harvesters like it. One counter to that, although I don't know what the statistics bear out would be, right? You mentioned earlier, there's a difference between selection and selective. And in this case, right, if they need to, you need to reduce or remove a certain amount of material and you do fifth row, then there's going to be some selection that has to occur. And that's where the next type of thin comes in, actually, yeah, it's a free thing, a free thing is basically any combination of any of those, those, those, those thinning strategies that we just talked about. And typically, that's what you're going to see used in pines. You're going to get that fifth row and then they're going to select some trees out of the two rows on either side of that, that row that they could. And that's where they're going to pull those, pull those extra trees to get their residual trees down to a density that that was the target to begin with. And that's by far the most common thing that you're going to see used for first in pines. Well, it's all where the Haglin goes on too, right? Yeah. Oh, absolutely. Yeah, if you've got a good logger doing those selections, then you're in really good shape if you've got somebody that's really inexperienced or perhaps very rarely, you know, not a screw, you know, more scrupulous, you could get some of the good material removed that you don't want out of there. Oh, I wouldn't say that that's rare. Well, I'm trying to. I've seen that. I was saying, I would say it's less common. And then common, but I do see that and I'm glad you brought that up because I was going to mention that where it's easy to turn a free thing into a high grade. If you have something exactly where you went with it with somebody that's inexperienced or somebody you don't, you're not riding herd. You're not watching that stand and making sure that they pull the right trees. Now they get their good stuff in that row, right? Yeah. They get good and bad. They get, you know, they get some good stuff in that row. It's up to you or your, or your manager, you know, the person standing in for you to make sure that they don't take the good stuff out of the adjacent rows. And, and that does happen. I've, you can absolutely high grade a pine stand people, you know, people laugh at you when you say that, but trust me, when you go in and you're like, you look at a stand and go, wow, there's, you know, there's, I can sit here and see 15 fork trees and I'm looking at that, you know, I'm looking at that truck leaving and there's no fork trees on it. Yeah. So you can't happen in a pine stand. Yeah. Well, and for, and for those lists and as landowners, that's absolutely, if you don't have a consultant, which we can't, you know, can't more strongly recommend, that's something you need to keep an eye out for during the harvesting process. And so, I mean, that's kind of the overall, you know, the general types of thinning and then you get into what does it do for you? So from, and obviously, you know, you're going to come in and you're going to have to talk for a long time here in a minute and let me shut up, but obviously on the economic side, there's reasons for doing that. And where I'm going to, like I said, I'm going to hush and let you do those in a second. But from a biological standpoint, again, you know, what we're doing is we're redistributing that growth that's possible on a given acre and we're putting it on to a fewer number of trees. So I guess you back off just a little bit here and say, you know, what time, you know, what's her timing? When do we need to start doing a thin and that depends and nobody likes that. They want us, they want a number. But the reality of it is there's several things that you look at in a pine stand to tell you when it's time to do one of those things that we talked about. And we don't have time to sit here and talk about all of those and what's out there. But if you, I guess, you know, the first thing that you're looking at there would be your radial growth. That's one of the easier ones to look at our radial growth. So we're talking about how much diameter trees putting on in a given period of time. Depends on what you look at depending on, you know, the publication you read that most people have historically looked at either three or five year growth, immediately, you know, the last three or the last five years of growth that a tree is put on, you're not going out and looking at that on your suppressed trees, right? And that's the first thing people do when they stick that increment core in. They want to look at, you know, I don't want to damage my good tree. Well, you need to be looking at the codons and because that's where your money is. That's where you're, you know, that's just crop trees, right? So you're looking at those codon of trees and you are, you know, taking the increment core for the listeners have never seen that. It's literally just a little bit that you put into the tree and you pull out a core and you count, you can count rings, but you're looking at growth in this case. And what you're doing is you're just measuring that last three years or five years of growth growth. And historically, what they were looking at is a 10% growth over, you know, a 10% annual growth. So they're looking at trying to stack on 10% a year when those stands are 10 over that period of time. You average that over the course of that period of time, you wanted to see that kind of growth for it to be commercially viable, 10% some, you'll hear 8%. Once you get in at 5% or 6%, it was time to start thinking about doing something is that's your time to start, you know, thinking about thinking and you'll see it stacking in, you'll see those rings, you know, you'll see early in the life of the tree, it's growing, it's rocking along and they start getting closer and closer and closer. And you start getting the late, you know, the little thin rings as your, as your canopy closes off and trees are competing. That's, that's the easy, well, I want to say it's the easiest. You develop an eye as a forester when you walk into a stand, I can tell you right, yep, this one needs thin or no, it doesn't or probably doesn't, then you, then you, I would take a core. But it's one of the easiest for people that I don't haven't developed that eye, you start looking at the rings and those trees and see, see how much it's still growing. Height to live crown is a big one, you know, you need, depending on what you read again, you need at least 18 to 24 foot, I would say 24 foot of free, you know, clean log, no, branches for, for a logger to be able to do anything with it. You need diameter, you know, historically, we said, five and a half, six inches on low end. Shit. No. In today's world, I mean, yes, they, that's still commercially, you know, a viable thing, but the reality of it is the logger's not going to come out there for much 18 foot, five and a half inch trees and I don't blame it, he can't make any money doing that. So all you get into that six, seven inch range is, is really on the small end, but you get seven, eight inches, nine inch diameter on average across the stand, you start becoming the bigger the better and you start becoming, because you're stacking tonnage on there, right? It becomes more attractive to a logger and you're going to need to be able to, and you're going to need to remove enough trees that a logger can get a load or a load and a half an acre. So 25 to, you know, 35, 40 tons. That's, that's, that's where I was going to jump in and I'll, I'll leave it out, because that's out of my realm a little, but just the, but just that idea of, and then I don't have to wait to cover it. I can hit it now. Just the idea that, you know, when you're, the operational considerations of all the stuff, a lot of times landowners and economists that sit in office running mathematical equations don't think about this, myself included for a long time till I get smartened up by guys like Dr. John All and some of the other operations guys have bumped into. But you know, just from a geometry perspective, if I have to cut fewer trees to stack my truck up to the weight that it needs, then that, that makes my cost per tree lower, which is good for me as a, as a business. And so of course they, they're going to want a little bit larger size. There's also some length requirements. I mean, I always hear somewhere between 35 and 40 feet. Is that reasonable? Yeah. And that was going to be one of the things, the next point of my, so yeah, go ahead. Oh, I'm sorry. No, no, no, no, no. Go for it. So, you know, there, there are some, some length requirements, you know, or preferences that you also want to keep, yeah, I want to keep in mind as, as Dr. self mentioned, you know, that 25 tons to an acre, why is that number kind of the rule of thumb? Well, that's, that's how much a truck typically can carry. So it's not overloaded when it's going down most roads in your state, at least your, your major roads. And so yeah, if you can get more than that, that's fantastic. But once you start dipping below that, break even analysis for the logging operation starts to get pretty, pretty perilous, especially with, with the prices that we have. And so if you really want to want to be mindful of, you know, you're basically, I always tell people it's basically like you're looking for a date and loggers, loggers are, it's a, it's a, it's a, it's a loggers market, so to speak, with respect to landowners, because there's so much wood, they can go to so many different sites. So they've, they've gotten, you know, and naturally they've gotten a little more picky. And they also have their own problems on margins and things like that, they're dealing with. And so they have to get a certain amount of value out of that stand to make it worthwhile to them. Yeah. Absolutely. Oh. And like I said, you covered another one of my, one of my kind of five points that floats around in my head there. So that gives us four or five and others height, I'm sorry, live crown ratio, which is one that's a little harder to, a little bit harder for some, to go out and assess, you kind of develop an eye for it, but what we're talking about there is the amount of live crown, by live crown, we mean the amount of branches. So the amount of crown with branches compared to the, the bowl that doesn't have any branches on it. I've seen stands that really need a thin, it'll be 15, you know, 10 to 15%. And that's where you have just a little, and usually it's going to be a little, a little skinny trunk that goes way up there and then you have just a few branches in the top, any look around you and it's, it's a dog hair stand, right? There's just trees everywhere. That is, that's a low vigor stand that that stand is ripe for something coming along and laying an egg in it and causing all kinds of beetle problems, right? And other things too. What we're looking for there is a minimum of 35%, preferably a 40% live crown ratio. And so that means you're going to, you know, and not that you're going to have pulp with a tall 100 foot tree, you've got 35 or 40 foot of crown up there. And anybody that's been at a pine stand for any length of time can go, oh, you know, that, yeah, that's probably not typical in a first-end pine stand. That's, that relates back to, you know, yes, your site has a certain amount of, of capability inherent quality of a site, right? But in order to capitalize on that, that quality, it has to have the factory of the tree and the factor, the trees of foliage. So getting enough foliage to be able to, you know, photosynthesize and fix, fix the nutrients and turn it into wood, it has to have enough foliage. And to get that, you really need to be in that, you know, 35, 40% live crown ratio range for, for, for us to be happy. That's kind of the five things that you really look for. There's some other things too, but if you have a stand that's just eaten up with some disease or some, you know, some defects, you'll see some there ever now, then just to wig out and you'll have half the stands and fork or something like that. Well, you know, at that point, you may want to think about, you know, that plays into the way that you want to thin or not too. That's kind of the ways you know you're ready to start thinning. And then, you know, there's all kinds of things that play in there to making sure the site's taken care of, making sure if it's a winter site or if it's a, you know, summer site or you can do even one, finding the right loggers. I mean, there's a lot of things that play in decisions and things to consider. But biologically speaking, we could, we could take two hours to talk about everything here that we've kind of glazed over. But biologically speaking, that's kind of reasons, you know, for, for doing a thin and the things that you look at to assess where that stands ready to, to, to put on not, not chopping block, but ready to put at the barber, I guess we should say. Yeah, like that. And, and start working in that stand. Of course, then there's a, you know, the economics out of the world, you know, the reasons for not waiting. And that's what I want you to, I want you to cover because I don't, I can't, but, but there, that's, that's the stuff that with the biology is wonderful. But if you can't pay for it, you know, all the biology in the world does, you know, sits in your head, is, it's up to the economics how the world will make it pay. Sure. Yeah. Forest, econ force management people who operate more on the dollar side are, are, are fundamentally concerned with opportunity costs. And if you don't, if you don't deal with opportunity cost as, as a force land owner, as a force manager, you're going to make the wrong decisions. And so what do we mean by opportunity cost? Well, if I choose to do one thing, opportunity cost is the thing I gave up to do. We measure that typically in, in forestry with a measure that's called land expectation value. Now there's a, we could spend an hour talking about that and if you run it, if you guys want me to record one of those episodes so that you can deal with insomnia, I'm happy to do it. It's, it's very dry to say the least, but, but all, all told, it's, it just tells you what you should pay for, for bare ground, uh, to, to run the particular stand that you're going to run. So it's a way to kind of figure out what, what I should shell out in order to get a certain return that I've deemed as necessary, um, back from, from my timber investment. So that lev that land expectation value takes into account, not just the rotation that you're growing now, but it also takes into account stuff that you could do in the future. Okay. So the next stand or whatever you may do with those, those trees. Now, there's a document, uh, that I wanted to put everybody's attention on is protect your pine pan plantation investment by thinning. And this is through Mississippi State University's extension, uh, website and I believe this is by Dr. James Henderson. And, uh, oh Brady, this is from 2019. So we got to, we got to get this one updated. It's a little, little dated, but not, not, not, there's, there's quite a few that are dated. No. Yeah. Well, Hey, it's a blessing and a curse. Mississippi States got the best library of extension articles of any, I think of any university in the country. So it's a lot to maintain, right? We, we know that. Sure. Sure. But, but in that document, Dr. Henderson does a really good job in table one and, and well, excuse me, table two of laying out what happens if you, to your LED, if you just delay. So that would be the, the value of the, of the bare ground. If you just delay a first thinning by one year and by two years. Now, at the time of these numbers were estimated, um, pulp wood was running about eight, eight to $10 in Mississippi where he ran the analysis. Yeah. I think actually, um, we're not there anymore to put it, to put it bluntly. Um, I think, I think, you know, I've heard a pretty, a pretty big consultant over this way. I'm in South Arkansas, uh, 50 cents to a dollar per ton for pulp wood. And so, I'll, I'll, and once I go through these numbers, I'll explain how that's going to, going to actually matter as well. Um, but Dr. Henderson with, with these prices, these elevators, elevated prices, um, and saw timber was higher than as well in, in his analysis, but in order, in order, in order to justify the one year delay, right, that opportunity cost, do I thin now or thin later, what do I need in order to be made equal between those two decisions on a poor site? You need eight percent, you need an eight percent price premium in pulp wood to justify that decision. Okay. Eight percent does not happen, uh, very often, but it does happen. Okay. For a 70, uh, for a middle class, uh, site. So when I say middle class, I'm talking about the productivity of the soil that your, that your stand is on for, for pine, particularly, uh, 15 percent, uh, for a good site. 20 percent. Okay. If, if, remember when I said earlier in the present, or in the discussion, uh, sometimes you'll get flash prices in pulp wood. Yeah. Okay. That's when, that's what we're talking about right there, right, a 20 percent, 30, 30 percent jump. That's what you're going to need. Now, if you want to delay two years, so we're going from forest site to best site, 11 percent, 18 percent and 27 percent. And some of you may be asking if you're, if you're hyper aware, well, hey, why is it more for the, for the better site? Ah, opportunity costs. Those trees, right? That you're, you have a, you have a stand that has really high growth potential. When you're doing these delays, you're also delaying other things down the line. And so you're, that's costing you as well. And so when you have this really good production site and you, uh, throw a monkey wrench by not thinning into that production, then it's more costly to you than it is on lower quality or a smaller, what I would call the best mentally, mentally, the best way to think of it as a smaller factory, right? You're just able to produce less and so future and future, future. That's it. Absolutely. And, and I, people ask, well, hey, that's with eight dollars a ton. What do those percentages look like with a dollar a ton or a dollar 50 a ton? Well, the answer is I don't have that calculated, uh, but those would be exacerbated. They'd be even more so for the same reason, at least conceptually, that holding the one year on a high site is worse than on a 60. Okay. These low prices for pulp wood mean that this is a, this is from, as far as your overall investment, this is the dog decision of all your decisions. And so you don't want to mess this up because it will, it will, uh, ripple across the rest, at least into the future, it'll ripple across the rest of those decisions as well. And so these numbers that I quoted you, they would be, they would at least, they would at least be higher. I can't, I can't speak to an exact amount, um, but you know, that highest number I quoted at 27%, you're probably looking at 40 or 45%. Now, how often do you see a 40% bump in one year for a pulp wood prices? I don't know that I've ever seen it. Um, you know, maybe, maybe after a big hurricane, uh, you know, that took out a giant swath of trees in an area, but I don't know that I think that would still be pushing, uh, push and believability. And so what we're getting at is, is back to the things that Brady and I have said from the beginning, don't delay. You're not going to outsmart biology and you're not going to outsmart markets. Um, you get lucky sometimes and you, you win on those deals, but it's very seldom. And you know, as a, from an economist perspective, people who own 40 or 80 acres, it's important to turn every percentage in your favor that you can. Any one bad decision can, may not be fatal for you, but it, but it's going to cost you money that you don't really want to give up. Um, you know, if you've got 20,000 acres, you know, yeah, it matters. Uh, and you know, if the percents are still there, um, but from a cash flow perspective or how much you need for retirement, you're probably going to be okay. But if you're banking on that 40 or that 80 for your retirement nest egg and you don't want to, you don't want to get stubborn on this small decision that can have really big impacts on your future decisions as well. Yeah. And, uh, again, conceptually, I grew with everything you're saying there. The real world side of it is that sometimes you have to delay, right? Um, that's true. Yeah. That's true. Not through your choices that you just can't get a logger to come take the wood. So, I mean, that's, that's fair. I don't want anybody to call and say, no, wait a minute. Uh, it, it sometimes, and more often than not up in, in this part of the world anyway, it's, uh, if you're lucky, uh, and I mean, that if you're lucky, you can get a logger there inside of a year. A lot of times it's years, three years in some cases, the log books, job books that those loggers have or it, uh, they, and again, you know, you talked about profit margins and things like that. And I'm not hitting on a logger at all here and saying they're greedy or they're only out for themselves and they're going for the big stuff. Uh, the reality of it is those profit margins are so narrow for a logger. Uh, I mean, they're one bad, you know, one bad job can bankrupt them. Um, I mean, that's, that's the reality of it and, uh, they have to maintain their business. So, you know, just because they can't get you right now when you want them to, you know, want them to come and cut that wood doesn't necessarily equate to any eel wheel or, uh, are them trying to, you know, to go for the big money. It's just, that's, that's the way the business works in this, this particular, uh, arena, at least for the time being, uh, that they can't do favors anymore. So that's, that's, that's my caveat on, on, you know, don't wait. Sometimes there's, there's no choice. Well, yeah, keep that in mind. You know, when's the best time to thin right now? When's the next best time next year and so on and so forth and so if you have to wait, you do, but I would, I would recommend to landowners and, you know, your consultant will be doing this. If you're working with one, um, you, you're going to start priming that, that logger a couple of years in advance to, to make sure that, that you get in the queue for, for their business, um, you know, again, it's the, it's the practical versus the theoretical. Yeah. I can run these calculations that I've been talking about the land expectation values and I can try a bunch of different options and the LEV might not, it might be lower, uh, for a decision I make, but it might be really close. And so from a landowner perspective, do you really care about it? If it's close? No, you don't, um, we're, we're trying to, it's, you know, you, you measure broad and you cut, you know, you cut narrow and the idea is these are just, these are just measures. They're not, they're not perfect. And so I see a lot of models where there's three or four year period where if you do, and this is for final harvest, but similar thing applies for pulp wood, um, it's a, it's a little bit more sensitive for pulp wood, but you might have a couple of years where that LEV difference from a decision that you're making could be really, really close. And so in that case, well, it's fine either way, right? Yeah. Um, financially, I'm not as concerned about that. Um, in these, these numbers that I quoted, these are just to avoid a loss. We're not, we're not even thinking about how much of a loss, right? The losses are going to vary depending on your circumstances. But if you don't then for a year, yeah, it's, it's not, it's not preferred, uh, but you will survive, uh, you will still make, you should still, you know, have a good chance of making money. If you were going to make money before, you probably still will, um, but we're trying to provide you best practices. Yeah. And, and I think that's, that's the way I have to look at any of this is it's, uh, there's so many variables that play in and I can sit here and talk about, you know, the biology of it. I can sit here and talk about what you get and how much you're going to lose from a, from a gross standpoint or, you know, the potential for, for damage from disease or for men's sex and you can talk about what the numbers are going to do and, uh, you know, how, how, how for going something in one year does this to you down the road and there is a ripple effect in that world and reality of it is is, I'm not going to say it's hyperbole, but, but, but the reality of it is is that he is, that he is looking at it from the outside in, right? Yeah. And everybody has their own set of constraints. Everybody has their own goals or everybody has their own mission, but there, you know, where the rubber meets the road, that drives everything and, uh, we're living in a world where quite literally in our case, yeah, we very literally, no pun intended originally, but, uh, the, the reality of it is where we, we work and we operate in a world now where people, uh, not only those wait lists to talk about, but people are in a situation where if they don't have a certain acreage and that acreage threshold keeps going up for a special for first thing and stuff to a point where you're not really talking about small landowners in a lot of cases anymore, depending on your location, you can, uh, you can have quite a bit of timber. Uh, I can think of one instance, I think I mentioned on the podcast before, uh, one instance in a county north and a little bit west of me here in, you know, up in the part of the world where it's hard to get a longer period in today's world, uh, about 240 acres worth of, uh, first time pine and we're not talking small. I mean, this, this stuff was like almost a chipping sauce size. I told them if they just come in and do an ever other row, then take out 50% don't worry about selection, just come in and take it. I will give it to you. And the logger went home did the, and I mean, I know the guy actually know this guy, uh, goes home and, uh, does the calculations that come out, said, I, I'm sorry. I can hear it. Incredible. 120 acres. 120 inch acres. I mean, you know, rough numbers, 120 acres of free pulp wood, the logger can't make it pay. Uh, never thought we would be there, you know, if you go back a few years, never thought why I'd be able to say something like that, but that's the reality that a lot of people are dealing with now, which leads us into our next podcast that we're not going to cover now of, you know, well, what are you doing in those situations? What do you, you know, if you do want to maintain growth in those stands and health in those stands, what do we do? Yeah. And there are some options. They're small terms. They're all going to cost you some money, uh, but there are some things that we can do in the, in that world that, uh, kind of second, second, uh, second options for you, you know, if you can give it to a logger, if you can give that first in material in, in, in a market where you, you, you just don't have any other option, give it to them because it's going to save you in the end, uh, you're going to be able to concentrate that growth. You're going to be able to do the economic stuff that you're talking about. You're going to be able to get to that, uh, that final product at the end of the rotation and it's not going to cost you money. Get there. Uh, the stuff in the next episode is going to cost you, but it, it, it still, it's, it's a cost to get to the end of that product, uh, in that end product that we're, that we're talking about here. Right. You may do what you have to do. And as long as, and I know people don't want to hear this, but you, you and your logger to get, or you, sorry, you and your consultant together or you separately, uh, the back to the opportunity costs, you know, when you go into an investment, you have what's called a discount rate, whether you know you do or not, and the discount rate tells you, instead of doing this investment, if I had to go do the next best thing, here's how much I could get. So it's my, it's my, you know, it's, it's my threshold. And so as long as you're over that, you've still done the best thing that you could have done with your investment. Now everybody would like far more than that who, you know, who doesn't, but that's, that's something to keep in mind the, the reality you're, you're not getting beaten quote unquote if a few are still hitting, hitting that target and so yeah, maybe a little more cost, eat into some of that return on investment and get you closer to your discount rate. But most of these options will still provide you a reasonable, what we would, what we would look at as a market average discount rate, which is around five or six percent. So you know, the story, even though it's less good than it's been, it's still, these investments still do hold, hold muster and so keep that in mind. Yeah. Well, I mean that, that, yeah, completely, and that, that kind of wraps up what I wanted to talk about in this, you know, this particular episode and we're, we're painting a bleak picture. That's why I tried to do that at the end. And I've been, I've been painting it for 10 years, 12 years, I guess in this job. And I'm not going to blow smoke. I mean, it is, it is a bleak condition, it is a bleak situation that folks are finding themselves in. But at the end of the day, again, Mother Nature will stand there, stand for you. That's right. Absolutely. And it's, if, if, if you don't want that to happen and you do want to capitalize on not only the finances that can come out of it, but also the, the reality of a happy, healthy stand versus one that is not, it's something we've got to figure out how to do. Absolutely. Yeah. This to me is the, at least in the Southeast and maybe nationwide, getting this material thin to keep our forest healthy is, is, is, has been and will be the biggest issue from a practical perspective for forestry over the next 15, 20 years. Oh, yeah. Yeah. I agree with that, and, and, and there are ways around that with, with the next rotation and going in, right? And we could talk about that. Don't let me forget. Next time we talk about that, you know, lower, lower and densities and things of genetics, but that doesn't do anything for the people that have, you know, that 15 or 20 year lag that we have before those stands get to that for one, so yeah, it's just the reality of it. Again, not blowing smoke at anybody. It's just the reality of it. So rather be honest about it. Sure. Yeah, I've heard economists refer to as the eternal optimists, right? You kind of paid a little bit different picture there. I'm glad. Yeah, I try. Yeah. I'm trying to come up with something. But now my, my old, one of my old mentors, John Sophocles is a great economics professor. He said, Sean, no matter how dark it gets, we keep turning down the shades. That's, that's what a, that's what economists do. That's what we're trained to do. So there you go. Well, with that, we're going to, we're going to cut it off here, but yeah, next time we'll talk about some alternative strategies that you can implement in order to deal with these depressed, uh, pulp wood markets in order to, you know, try to maintain the, the forest vigor and health on your, on your stand. And so with that, if you have any questions, feel free to email us at timber university. That's all one word at gmail.com and we'd be happy to, to converse with you or help you out with things if we can. With that, Brady, do you have anything else you'd like to add? I'm good. Just appreciate it. All right. Take care, everybody. Welcome to the timber university podcast brought to you by Mississippi State University Extension Forestry and the University of Arkansas at Monticello's Forest Business Center. I'm Sean Tanger and I'm Brady Sealth. We're both forestry specialists covering topics from soils to silviculture to social sizes as they pertain to forest stewardship. In this podcast, we'll extend research findings and professional experiences that are relevant to forest land owners, consultants, loggers and other natural resource professionals. If you fall into one of those categories, we'll help you explore historical and current sites that you can apply to your practical forestry knowledge and experiences. (gentle music) You
