Forestry Asset Basic Cashflow

Forest Production

Silviculture Costs

Annual silviculture costs for a 1 ha plantation under the following configurable scenario settings:

• Rotation $R \in \{4,5,\dots,15\}$ years
• Thinning $\in \{\text{"yes"},\text{"no"}\}$
  • If thinning = "no":
    • Silviculture runs at full (baseline) intensity in all years.
  • If thinning = "yes":
    • Thinning is implemented as intensity discounts on maintenance-related costs (no thinning cost is incurred).
    • Discount timing is rotation-dependent:
      • First discount: if $R \ge 6$, a discount factor is applied starting in year 4
      • Second discount: if $R \ge 9$, a stronger discount factor is applied starting in year 7
• Quantity weighting $\lambda_q \in (min_q, max_q)$ (i.e man-days, input quantities)
• Wage / price weighting $\lambda_p \in (min_p, max_p)$ (i.e wages and unit prices)
• Labour mix $\in \{\text{unskilled}, \text{skilled}\}$
  • If skilled, unskilled man-days are converted to skilled man-days using a fixed efficiency factor

Annual costs are computed for each year $t = 1,\dots,R$.

• Labour cost and allowance, computed as $\text{Labour cost} = \lceil \text{man-days} \rceil \cdot \text{wage} + \lceil \text{man-days} \rceil \cdot \text{allowance}$
• Consumable and operational inputs computed as $\text{quantity} \cdot \text{unit price}$
• Fixed or variable silviculture items (tools, PPE, transport, overheads) as defined in the operation library

Forest Retail Cashflow

Cashflow for a 1 ha plantation, conditional on the silviculture costs model and the following scenario settings:

• Initial stocking $N_0$ (trees per hectare)
• Thinning schedule and prices: Each thinning year $t \in \mathcal{T}$ has an associated price per tree $p_t^{\text{thin}}$ and removes a fixed fraction $\theta_t \in (0,1)$ of the standing trees
• Final harvest: Occurs in year $R$. All remaining trees are harvested at a roundwood price per tree $p^{\text{final}}$
• Thinning revenue: $\text{Revenue}_t^{\text{thin}}=\theta_t \cdot N_t \cdot p_t^{\text{thin}}$ for $t \in \mathcal{T}$.
• Final harvest revenue: $\text{Revenue}_R^{\text{final}} = N_R \cdot p^{\text{final}}$ at $t = R$ For each year $t = 1,\dots,R$:
• $CF_t = \text{Revenue}_t - \text{Silviculture cost}_t$
• Net Present Value (NPV): $\text{NPV} = \sum_{t=1}^{R}\frac{CF_t}{(1+r)^t}$
• Internal Rate of Return (IRR): $\sum_{t=1}^{R}\frac{CF_t}{(1+\text{IRR})^t}=0$
• Payback period: The first year $t$ for which cumulative cashflow becomes non-negative

Roundwood Retail Cashflow

Harvest and haulage costs for a single harvest event over a plantation area of size A (ha), under the following configurable scenario settings.

Expenditure:

• Felling method $\in \{\text{"chainsaw"},\text{"harvester"}\}$
• Extraction method $\in \{\text{"manual"},\text{"tractor"},\text{"belllogger"}\}$
• Loading method $\in \{\text{"manual"},\text{"machine"}\}$
• Equipment regime $\in \{\text{"rented"},\text{"owned"}\}$
  • If rented: daily rental rates apply ($\lceil d \rceil \cdot \text{rental rate}$)
  • If owned: daily maintenance rates apply ($\lceil d \rceil \cdot \text{maintenance rate}$)

Operations (intensity parameters):

• Mensuration: $v_M \in [0,1]$
• Felling: $v_F \in [0,1]$
• Extraction: $v_E \in [0,1]$
• Loading: $v_L \in [0,1]$
• Haulage: $v_H \in [0,1]$
• Regulatory: $v_R \in [0,1]$
• Allowance: $p_{\text{allow}} \in [0,1]$
• Permit strictness: $p_{\text{permit}} \in [0,1]$

For each quantity specified as $(q_{\min}, q_{\max})$:

• Effort/consumption quantities increase with intensity: $\text{eff}(v) = (1-v),q_{\min} + v,q_{\max}$
• Productivity quantities (e.g. stems per day) decrease with intensity: $\text{prod}(v) = (1-v),q_{\max} + v,q_{\min}$

Price and wage weighting

• Wage weighting: $\lambda_w \in (w_{\text{min}}, w_{\text{max}})$
• Price weighting: $\lambda_p \in (p_{\text{min}}, p_{\text{max}})$

Site and scale parameters:

• Harvest area: $A$ (ha)
• Stems per hectare: $N_{\text{ha}}$
• Mean tree volume: $\bar v$ (m³)
• Haul distance: $D$ (km)
• Truck payload capacity: $C$ (m³ per trip)
• Labour (including allowance) and equipment cost
  • For any labour category requiring $d$ man-days: $\text{Labour cost} = \lceil d \rceil \cdot \text{wage} + \frac{\left\lceil 2d \right\rceil}{2} \cdot \text{allowance}$