Timber Investment Returns for Selected Plantations and Native Forests in South America and the Southern United States

background

This study examines the value of timber investments in South America. Exotic Eucalyptus in the southern cone (Argentina + Chile) are the most profitable, with Internal Rate of Return of 13-23%, followed by exotic loblolly pine (Pinus taeda), whereas investments in the southeast USA is less profitable.

Conclusions & Takeaways

Financial returns for natural stands in Latin America were much lower than in commercial plantations. Typically only 0-20% of Neotropical forests species have commercial value. (Lamprecht 1990) Containerized seedlings are used in most of tropical America, while bare root seedlings are more common in North America. Exotic plantations have historically had less biological risk than native tree plantations (partially due to lack of pathogens and pests) Little data on timber stumpage values (wood value) exist for native tropical timber. In the southern cone, native timber (Nothofagus spp. and Araucaria angustifolia) are similar or less in value than exotic pine and eucalyptus.