Effects of sale-specific factors on stumpage prices in Finland

Kolis, Karin; Hiironen, Juhana; Ärölä, Esa; Vitikainen, Arvo

doi:10.14214/sf.1054

Cited by 16 publications

(7 citation statements)

References 22 publications

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“…This easily compensates for the loss of revenue caused by intensified GFFM. Doubling the size of the sales would lead to an increase of about 0.5-1 euro/m 3 in the stumpage price (Kolis et al 2014), which corresponds to about 2-3% of the average stumpage price within the dataset. If the efficiency of operations can be increased, it can cover the costs of increased microsite variation (game spots) and most of the increased average forest cover (longer rotations).…”

Section: Discussionmentioning

confidence: 99%

Economic effects of grouse-friendly forest management

Haara¹,

Matala²,

Melin³

et al. 2021

Silva Fenn.

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Traditional timber production may have negative effects on other ecosystem services. Therefore, new forest management guidelines have been developed in order to enhance a habitat suitable for wildlife. In Finland, a recent example of this is grouse-friendly forest management (GFFM) which emphasises the preservation of grouse species (Tetronidae) habitats. This study aimed to analyse the economic effects of these guidelines. An analysis was made on how the application of GFFM affected the Net Present Value (NPV) in a 30-year simulation of forest management of four large forest holdings located from south to north in Finland. In the simulations, traditional forest management practices were compared to two levels of GFFM. Five levels of interest rate were used, namely 1, 2, 3, 4, and 5%. In most of the simulations, the NPV was reduced by about 1% or less due to the application of GFFM in comparison to the traditional reference forest management. Only in one case with more intensive GFFM, was the reduction of NPV more than 5%. The interest rates had an impact on the differences between the management approaches. For example, a low interest rate resulted in a higher thinning intensity in GFFM in comparison to traditional forest management, which lead to a higher NPV in GFFM. To sum up, it seems that it would be possible to manage forest holdings in a grouse-friendly manner with minor effects on the economics.

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Section: Discussionmentioning

confidence: 99%

Economic effects of grouse-friendly forest management

Haara¹,

Matala²,

Melin³

et al. 2021

Silva Fenn.

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“…Under conditions of instability in the global markets and a considerable decrease in demand in the first half of 2009, the State Forests managed to implement its sales plan, but at somewhat reduced prices. In the same year timber sales in Finland amounted to as little as 16.5 million m 3 as compared to 33.2 million m 3 in 2010, at prices that were lower than in 2008 [59]. Toppinen and Kuuluvainen [60] reported high price elasticity for Finland pulpwood supply, in contrast to France [61].…”

Section: Discussionmentioning

confidence: 99%

The Application of Time Series Decomposition for the Identification and Analysis of Fluctuations in Timber Supply and Price: A Case Study from Poland

Banaś

Kożuch

2019

Forests

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The objective of the study was to verify the applicability and usefulness of time series decomposition in analyzing the variability of timber prices and supply in Poland. The employed multiplicative model was the product of four components: cyclical, seasonal, and irregular fluctuations and the long-term trend. The elements of the time series were determined by means of the Census X11 method, while cyclicality was separated from the trend employing the Hodrick–Prescott filter. Data included quarterly information about the supply (volume) and prices (value) of the timber sold by the State Forests in the years 2005–2018. Analyses were performed for tree species with the greatest economic significance, that is, pine, oak, spruce, beech, birch, and alder, and for their most popular assortments: general purpose large-diameter timber (W0) and medium-diameter timber (S2A). Time series decomposition of quarterly timber production volume and prices revealed irregular, seasonal, and cyclic fluctuations. Within an annual time horizon, irregular fluctuations accounted on average for 6.7% and 28% of overall variability in timber prices and supply, respectively; they exhibited low amplitudes (+5%, −25%, respectively). Cyclical fluctuations were primarily found for prices and were characterized by substantial variations in cycle length (2–4 years) and change amplitude (3–27 Euros). Cyclical fluctuations in timber prices and supply were usually negatively correlated with each other: the upper turning points of price cycles fell near the lower turning points of supply cycles (with a shift of 1 to 3 quarters). The seasonality of prices was also inversely correlated with supply: quarters with low supply exhibited higher prices and vice versa. Seasonal fluctuations were more pronounced for timber supply (36%) as compared to timber prices (20.3%). Different seasonality patterns were found for hardwood and softwood. The lowest supply of softwood was found in the first quarter and the highest in the third quarter (spruce) or fourth quarter (pine). The supply of hardwood was the highest in the first quarter and the lowest in the third quarter.

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“…The best form depends on which is more suitable for your actual situation [58,59]. Previous studies on the stumpage price have generally adopted the linear form of HPM [15,37]. In this paper, the linear form also had a good predictive power, but the model comparison revealed that the double logarithmic form was best suited for our research.…”

Section: Choice Of Hpm Formmentioning

confidence: 91%

“…Leefers et al [36], who estimated stumpage prices in the Lake States forests in the United States, found that stumpage prices were aligned with the identities of individual species. In a study of 4824 standing timber sales transactions conducted during the period 2008-2012, Kolis et al [37] analyzed the relationship between stumpage prices and sales-specific factors. Their findings revealed the impacts of seasonal harvest restrictions, sales volumes, timber assortment, and forest damage on stumpage prices.…”

Section: Introductionmentioning

confidence: 99%

An Assessment of Stumpage Price and the Price Index of Chinese Fir Timber Forests in Southern China Using a Hedonic Price Model

Chen

Hong

et al. 2020

Forests

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Research Highlights: Stumpage price is the most important factor affecting the value of forests. Therefore, an understanding of the factors affecting stumpage prices and trends is critical for effective forest management. Background and Objectives: Chinese fir is the most important fast-growing timber species in China, it is also the tree species with the largest trading volume in the stumpage markets of Southern China. The aim of this study was to analyze the determinants and trends of stumpage prices for Chinese fir timber forests. Materials and Methods: Data on 928 sales of Chinese fir timber forests transacted between 2007 and 2016 were gathered from the stumpage markets in Southern China. We analyzed the relationship between stumpage prices and sales characteristics using the hedonic price method (HPM) and measured the stumpage price index with a dummy time hedonic index. Results: (1) The double logarithmic form of the HPM yielded a more accurate estimate than the semi logarithmic form. The R2ad values in the nine annual prediction models were all above 80%. Stock volume made the greatest contribution to stumpage price, followed by stand age. Stand area had no significant impact on the stumpage price. (2) Stumpage prices of Chinese fir timber forests fluctuated greatly, especially in 2010 and 2015 when the sequential price indexes were 180.01% and 74.95%, respectively. Taking 2007 as the baseline, we calculated the base price index in 2016 to be 197%, with an average annual growth rate of 7.82%. (3) The stumpage market was associated with a higher degree of risk than the timber market. Conclusions: Our findings provide valuable inputs that can guide and facilitate the Chinese government’s efforts to optimize resource allocation and standardize the stumpage market.

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Effects of sale-specific factors on stumpage prices in Finland

Cited by 16 publications

References 22 publications

Economic effects of grouse-friendly forest management

Economic effects of grouse-friendly forest management

The Application of Time Series Decomposition for the Identification and Analysis of Fluctuations in Timber Supply and Price: A Case Study from Poland

An Assessment of Stumpage Price and the Price Index of Chinese Fir Timber Forests in Southern China Using a Hedonic Price Model

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