State Forestry Cost Share Programs’ Contributions to Loblolly Pine Plantation Cash Flows in the US South

Abstract State forestry cost share programs provide nonindustrial private forest landowners with a reimbursed share of qualifying forest management expenses. The financial effects of programs in the US states of Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia were quantified. Loblolly pine ( Pinus taeda L.) plantation financial returns were benchmarked to the year land expectation value (LEV, dollars per hectare) was maximized first with no cost sharing applied at three levels of site index (18.3 m, 21.3 m, and 24.4 m at base 25 yr), planting density (1,122, 1,280, and 1,495 trees per hectare), and real discount rate (4%, 5%, and 6%). Applicable cost share rates were then considered for all rotations. The generalized Faustmann formula permitted further study of obtaining cost share reimbursement for just the first rotation or only in the future. Paying full cost for forest operations was feasible for all states only under these independent conditions: site index 21.3 m and 24.4 m; planting 1,122 TPH and 1,280 TPH; and a 4% discount rate. Planting 1,495 TPH and setting a 5% discount rate became economically feasible in all states when cost share incentives were accessed at any time. Perpetual cost sharing led to consistently positive LEVs when discounting at 6%. This was also true on SI 18.3 m timberland and extended down to SI 15.2 m in Louisiana and South Carolina.