arborgen

ArborGen Confidential

Silviculture and Genetic Effects on Stand Yield and Value

ArborGen Confidential 2

Presentation Objectives:

Review changes in genetics that are occurring

Review changes in silviculture that are occurring

Discuss what drives stand yield and stand value

Results of how good silviculture and genetics are increasing stand yield and value

Look at an example of new opportunities for managing to increase stand value


Changing genetics!


Select Breed

Test

Select

Breed

TestSelect

Breed

Test

First Generation Open-Pollinated (OP) Orchard

1963-1980

Second Gen Orchard

1981-2011

Third Cycle Orchard

2008-

Where we have been:

•First selections for testing made in 1950’s

•It takes about 15 years to breed, test and bring an Orchard into full production


.

Avg. OP

Elite OP

Elite OP/ Insight

MCP

MCP / Insight

Early Varietals

Varietals / Insight

Value-$/AcFuture/ Biotechnology

+

Increased Genetic Certainty

ArborGen S.E. USA pine products

OP

MCP

Varieties


Average Gain for 2009 Nursery Crop

• 2.0-Generation: 18.5%• 2.0-Select 24.7%

• 3rd-Cycle: 34.6%

• Elite: 38.3%

• MCP: 40.0%

Volume Gain

Vol Gain Index

Loblolly 2.0 22.9 81.5

Loblolly 2.0S 28.8 88.0

Loblolly 2.5 33.9 110.4

Loblolly 3C 43.9 113.4

Loblolly Elite 40.4 117.6

Loblolly MCP 56.0 125.9

Average Gain for 2010 Nursery Crop


Silvicultural Changes:

Plant lower density stands

Fall Planting with enhanced genetic stock

Flex Stand Deployment systems—based on market expectations

Resource focusing treatments---Individual tree or row treatments

Directed protection treatments


Review of what drives stand yield and stand value:


Achieved SI= Base Site Index + Genetic Improvements + Management Intensity•Soil

•Climate

•Atmosphere

•CO2

•Ozone

•VPD

•Species

•Level of TI

•Site resource management

•Resource inputs


Achieved Stand Value= Achieved SI + Value Management Intensity

•Planting less tpa

•Use enhanced genetics to increase % ST and stem quality

•Marking before thinning

•Pruning

•Apply pole production silv.

•Manage for export logs

•Use new silvcultural deployment systems


Pigeon Pond Establishment:

-Site: Berkeley County, SC—Lower Coastal Plains

-Soils: Moderately Well Drained-Goldsboro

-Previous Rotation Site Index-base age 25 years : Low 70’s

-Planted at 605 tpa in 1998

-Two years weed control

-Systematic thin (remove every other row-no selection) =12’ x 12’ at age 5 303tpa

-N&P fert at age-5

-Snow damage about age-6

-Fourth row operational thin to a target of 150 tpa or remove defective trees — Age 13

-Performance was evaluated at age-12 because all heights and dbh measured at this age

Example of Genetics and silviculture impacts on stand yield and value


Before Thin Performance----Age 12


Exhibited Site Index of Elite OP and MCP Stands

87.3

91.590.7

94.3

89.1

82.0

84.0

86.0

88.0

90.0

92.0

94.0

96.0

AG175 AG373 AG769 AGM22 AGM29

Sit

e In

dex

•Strong performance by Elite OP families and MCP crosses: Exhibited SI ranges from 87 to 94 feet

•Not all Elite OP are the same and not all MCP are the same

•AGM29 was the first MCP cross produced by MWV and is no longer in commercial production


1998 Pigeon Pond - Sawlog Potential

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

AGM-22 AG-769 AGM-29 AG-175 AG-373

% o

f T

rees

None Pulp Some Good Best

Green and light blue sections are sawtimber potential trees:

80% ST 66% ST 83% ST 58% ST 53% ST

•MCP % ST potential trees range from 80-83%

•Elite OP % ST potential trees range from 53% to 66%


Age-12 Operational fourth row thinning results


Gtons/acre harvested at age-12

45.7

54.4

45.5

50.3 50.6

40.0

42.0

44.0

46.0

48.0

50.0

52.0

54.0

56.0


Gto

ns/

acre

•Gtons/ac harvested ranged from 45 Gtons/ac to 54 Gtons/ac

•At $10/Gton thinning cash flow would range from $450-$544/acre

•At $15/Gton thinning cash flow would range from $683-$816/acre

1st thin yields:


Basal Area/Acre after 4th-row thin

56.8448.33

61.71

72.5863.87

0

10

20

30

40

50

60

70

80


Bas

al A

rea

(Sq

.Ft/

Ac)

•The amount of basal area left after thinning was dependent on the % ST potential trees that were present before thinning

•Stands with lower BA will have lower growth potential in the future

Fourth Row Thin—Remove all low quality trees


Percent Sawtimber Quality Trees after 4th-row thin

58.1%52.8%

66.1%

80.0% 82.6%71.2%

79.5% 81.5%89.8% 93.0%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%


Per

cen

t S

awti

mb

er Q

ual

ity

Ste

ms/

Acr

e

•4th-row thinning of Elite OP stands left: 71-82% ST potential trees & 107-131 tpa

•4th row thinning of MCP stands left: 90-93% ST potential trees & 134-139 tpa

•The potential value of the stands going forward are not the same

Genetic effects on the after-thin residual stand


Thinned OP AG373, 107 tpa, 48 BA, 80%ST


Thinned AG 769 , 131tpa, 62BA, 82% ST

ArborGen Confidential 21MCP AGM22 139 tpa, 73BA, 90% ST


Current Stand Value and Future Value


Current Stand Value:

If landowners or investors use current genetics and good silviculture can they grow stands that have significant standing value at age-12?

Genetics Age-12 Total Tons/Acre

Value at $12/Gton

AG-175 81.7 $980.00

AG-373 87.2 $1046.00

AG-769 86.9 $1043.00

AGM29 92.4 $1109.00

AGM22 101.9 $1222.00


Clearcut revenues by genetics

2608 26033110

3880

3332

0500

10001500200025003000350040004500


Do

llar

s/A

cre

Summary:

-CC value varied between elite OP families AG175, AG373 & AG769 stands

-There is variation in the value of MCP-(AGM29 is no longer a commercial MCP cross)

Future Stand Value

•Value of stand when CC at age 23. ST tonnage adjusted based on percent sawtimber trees, Assumed prices were $30.00 for ST, $15.00 for CNS and $10.00 for pulp


Dick West 13 year old Full-Sib Stand

Dick West Stand Treatment History

• Completed harvest of previous stand in 1998

• Site Preparation (1998)

• Sheared, chopped and bedded in August• Chemical Site Prep. (Accord & Oust) October• Hand planted Nov. (7x 12’ spacing, 520 tpa)• Rooted Cutting clones & OP seedling checks

• Herbaceous weed control in Spring of 1999

Example: Stand Value Management Considerations


Stand Performance @ 8 yr

• Exhibited Site Index • Full-Sib AE - 91.4 feet• AG373 - 91.8 feet


Genetics %Pole Trees

%ST Trees Predicted Clearcut Gtons/ac @ Age 25

OP Elite AG 373 5% 46% 228 Gtons/ac Total

128 Gtons/ac ST

(Extract 11 Gtons/ac Poles)

(@ $50/Gton=$550/ac)

Full-Sib Cross AD 4% 50%

Full-Sib Cross AE 35% 79% 228 Gtons/ac Total

173 Gtons/ac ST

(Extract 80 Gtons/ac Poles)

(@ $50/Gton=$4000/ac)

Example: Increasing value with new genetics—pole silviculture


Summary

Many new genetic options are available that can lead to much improved stand value

The greater “genetic certainty” has opened up a wide range of silvicultural options that can reduce input cost, produce more wood and give greater market flexibility

Even in very depressed market conditions, timber investments can be very attractive if the best genetics and silviculture are applied correctly.

arborgen

Technology

value of mcp

current stand value

potential value

st mcp

stand yield

future value

cc value

value results