Green Horizons

Every landowner faces a finite amount of land with an infinite amount of choices and opportunities to manage that land. Land management decisions are made based on each landowner’s goals, which can also vary widely. Some landowners only want to maximize profits from their land. Some landowners are only interested in the aesthetic attributes that their land offers. Many landowners fall somewhere in between and are interested in both profit and aesthetics in some balance.

Missouri is graced with vast forestland and a climate suitable for growing trees as well as grass and cropland. As a result, Missouri landowners have many options available for managing land to meet their goals. The challenge arises however when trying to assess the economic impact of land use decisions when the time horizon of land use decisions are so different. Specifically, the benefit of the decision to plant trees or maintain and manage an existing stand of trees versus managing that land as pasture or cropland is challenging to assess economically because the trees grow over a much longer time period and provide returns to producers in lump sums versus pasture or cropland that provide returns annually.

Missouri NRCS has a user friendly planning tool available that provides a quick economic analysis of forestland management decisions. The tool, entitled "The Economics of Converting Cropland or Grassland to Forestland" is run in MS Excel, and is available to download from http://www.nrcs.usda.gov/wps/portal/nrcs/detailfull/national/technical/econ/stateresources/?&cid=stelprdb1044088.

For producers considering converting cropland or pasture to forestland, the tool captures the costs of tree establishment and management and compares those costs to the benefits the forestland will return in future years through saw timber, veneer and pulpwood harvest. Users will benefit from the input of a forester to help assess the estimated yields from a stand based on stand composition and location. The model returns an Investment Evaluation for the landowner to use to compare with other possible land use options, such as maintaining the land in its current land use as cropland or pasture.

For producers who have an existing stand of timber, the tool can also be used to assess the potential value of that existing stand. In this scenario, the only cost the landowner may have is associated with managing the stand through timber stand improvement to maximize the future yield potential. Again, the tool will compare any management costs to the expected returns from the stand and return an Investment Evaluation. This aspect of the tool may be helpful for landowners considering converting an existing stand of timber to another land use, such as pasture. The investment evaluation will provide the producer with information on what potential income can be expected from the existing timber.

Missouri landowners are faced with decisions every day on the best management of their land resources to meet specific goals. With all the choices possible, decision making can be challenging and overwhelming. Ultimately, the final decision on how to manage the land and its resources lies solely with the landowner. However, there are many resources available to provide information to landowners that may assist decision making. The tool described above is one example of a resource available to help landowners.

For more information or questions, please contact Lauren at (573) 876-9415, lauren.cartwright@mo.usda.gov.