%0 Research article
%T Integrating timber price scenario modeling with tactical management planning of private forestry at forest holding level
%A Kangas, Jyrki
%A Leskinen, Pekka
%A Pukkala, Timo
%D 2000
%J Silva Fennica
%V 34
%N 4
%R doi:10.14214/sf.621
%U https://silvafennica.fi/article/621
%X In forest management planning, deterministic timber prices are typically  assumed. However, real-life timber prices vary in the course of time,  and also price peaks, i.e. exceptionally high timber prices, might  occur. If land-owners can utilise the price variation by selling timber  with the high prices, they are able to increase their net revenues  correspondingly. In this study, an approach is presented to study the  timber price variation and its significance in the optimization of  forest management. The approach utilizes stochastic timber price  scenario modelling, simulation of forest development, and optimization  of forest management. The approach is presented and illustrated by means  of a case study. It is shown how the degree of uncertainty due to  variation in timber prices can be analyzed in tactical forest planning  of private forestry, and how the potential benefits of adaptive  timber-selling behaviour for a forest landowner can be computed by using  the approach. The effects of stochastic timber prices on the choice of  forest plan are studied at the forest holding level considering also the  spacing and type of cuttings and the optimal cutting order. A forest  plan prepared under the assumption of constant timber price very seldom  results in optimal forest management. Through studying the effects of  stochastic timber prices, forest landowners and other decision makers  obtain valuable information about the significance of adaptive timber  selling behaviour. The presented methodology can also be used in  analysing the land-owners’ economic risks as a function of time-price  structure.