A Damaging Tradition: Diameter-Limit Cutting Diminishes a Woodlot

A Damaging Tradition: Diameter-Limit Cutting Diminishes a Woodlot

These trees got their start at the same time. Note the difference in diameters. The larger ones are growing more vigorously and can increase in value if left to grow.

Let me start with a story. Several years ago, a logger showed me the harvesting he was doing on a piece of his family’s property. This was the third time he had harvested this particular piece, and he had noticed each time that the quality of the logs he was getting had markedly decreased from the previous harvest. The first harvest, some 30 years before, had yielded a good share of veneer-quality hardwood and lots of nice sawlogs. The second time around, the logs had been smaller and generally of lower quality, while the logs from the current harvest were so poor that the job was far less profitable than he had expected.

He was proud of the quality of his harvesting and thought he was practicing good forestry; he didn’t understand why log quality was declining with each harvest. What was going on, he asked me? Some disease or insect? Weird weather?

I had to tell him the hard truth: the real reason for the decline in tree – and hence log – quality with each succeeding harvest was that he was practicing diameter-limit cutting.

In its simplest form, diameter-limit cutting is the practice of harvesting all of the trees on a parcel that are larger than a certain diameter. In forestry terms, tree diameter is measured at breast height, defined as 4 ½ feet above ground level, leading to the term, diameter at breast height (dbh). All trees below a chosen dbh, usually in the range of 10 to 14 inches dbh that haven’t been cut, broken off, nor uprooted during the harvesting operation are left for future growth. The target dbh for a given logging job is dependent on the species, the markets, and harvesting costs. As a rough rule, the diameter limit is generally set with the objective that every tree harvested should pay its way out of the woods; in other words, the value of the wood it contains should exceed the costs of harvesting it.

While some logging jobs are conducted with a single diameter limit regardless of species, others set a different diameter for each species. Log markets may suggest the diameter limit for hemlock and lower-value hardwoods be 14-inch dbh, with 12-inches the target dbh for white pine and high-value hardwoods such as cherry, sugar maple, and yellow birch, while it drops to 8-inch dbh for spruce and fir. The tree diameters selected generally correlate with sawlog values, with lower diameters chosen for higher-value species or, as in the case of spruce and fir, where the log value is the same for all diameters above the minimum.

On the other end of the diameter spectrum, some loggers won’t cut large-diameter trees that have “over-matured” and have little or no merchantable wood.

Diameter-limit cutting – and its variations – also go by other names. “Selective cutting” is a non-technical term often used to describe the practice; it sounds comforting and has an air of authenticity because it’s similar to a legitimate silvicultural term for the techniques of group selection and single-tree selection, which are used in uneven-aged management. The practices are similar in name only. Two other terms, “cutting off” or “logging off” a woodlot are more to the point, since they mean harvesting everything of value. “Highgrading” is a more general term, referring to any harvest where only the most valuable trees are harvested; it is often characterized as “cut the best and leave the rest.”

What’s Wrong with Diameter-limit Cutting?
 

Diameter-limit cutting has been and continues to be very widely practiced in the Northeast, despite foresters’ frequent railings against it. For diameter-limit cutting to be so commonplace, there must be some strong arguments for it; let’s take a look at the arguments and their problems.

You’ll get the most money. Assuming that the landowner gets paid full value for the trees cut, it makes sense that diameter-limit cutting will produce the most money right now. After all, if only the trees that can be harvested profitably are cut, how could one possibly make more money? And furthermore, it is often argued, the landowner can save the money that would otherwise be paid to a forester to mark the stand and oversee the harvest, since you needn’t be a trained forester to identify trees larger than, say, 12 inches in diameter.

The basic problem with this argument is the timeframe. While diameter-limit cutting may yield the most money now, it reduces income significantly over the long term. A diameter-limit cut typically harvests many trees that are increasing rapidly in volume and value (remember that log diameter is an important factor in the value-per-unit-volume for most species). Cutting these trees now means that future harvests will be of lower value than they otherwise could be, as happened with the logger in the introductory story, because the trees were cut before they reached the higher value classes.

As an example, a 12-inch-dbh hardwood tree cut today might yield a 10-inch diameter log (log diameters are measured inside the bark at the small end) that is 12 feet long with a volume of 45 board feet according to the International ¼-inch log rule. If the tree grew to an 18-inch dbh, the same 12-foot log would be likely to have a diameter of 16 inches and a volume of 130 board feet – a four-fold increase (and there would probably be additional sawlogs higher in the tree). Sixteen-inch diameter hardwood logs are typically worth two to three times as much per board foot as 10-inch-diameter logs are, so the 12-foot-long log would be worth 8 to 12 times more simply by growing the tree – increasing its diameter – by 50 percent. At an average growth rate of 10 rings per inch, this would take 30 years. And if the log is of excellent veneer quality, its value at 16 inches diameter could increase by an additional two to six times. Studies comparing diameter-limit cutting with high-quality forest management confirm that diameter-limit cutting gives a lower total return over the long term.

image
This table illustrates the increase in value as trees grow. Value increases not just because there’s more volume in a larger tree. Mills pay at higher rates for larger logs; note the difference in price for small sawtimber and quality sawtimber. In a diameter limit cut, some well-formed trees are removed long before they reach their highest value.
 





A short timeframe is probably the biggest reason for the prevalence of diameter-limit cutting. People often face pressure to come up with money now – medical bills, taxes, loss of job – so that longer-term considerations of forest value are of relatively little importance. Furthermore, people’s time horizons are much shorter than the forest’s: if one doesn’t expect to live until the next harvest, or expects to sell the land before the next harvest, the financial incentive to be concerned about the future value of the trees disappears. The fact that the selling price of forested land is largely independent of the value of the trees growing on it (with the exception of industrial forestland measured in thousands of acres) means that the future value of the land is not usually a consideration in a decision to get as much money as possible right now.

The trees are financially mature. This is a more sophisticated version of “you’ll get the most money.” Someone making this argument assesses the woodlot to determine the annualized percentage of value increase expected if the trees are allowed to continue growing, and this percentage is compared to what could be expected with alternative investments. If the alternative investment yields a higher percentage of return, then one should harvest the trees now and invest the proceeds elsewhere.

I remember my introduction to this type of analysis in a forestry class in the early 1970s. For a lab, we took increment cores of trees to determine their recent growth rates, projected their diameters and volume increases into the future, made assumptions about future stumpage values, calculated the rate of return expected from the trees, and compared it to what the stock market was doing. For trees that were rapidly growing, or that realized significant jumps in value per unit volume with increases in diameter (as occurs with high-quality hardwood sawlogs for many species), this method generally prescribed growing trees to larger diameters than those of a diameter-limit cut, where the sole question is “can the tree be profitably harvested now?”

From a forest management perspective, it is impractical to perform financial maturity calculations for each individual tree on a parcel; but financial maturity computations have been created to suggest diameter limits for different species, with the forester who marks the stand making tree-by-tree decisions based on the tree’s condition, quality, and competition with neighboring trees. Sometimes, however, trees are claimed to be financially mature simply on the basis of their size, without any woodlot-specific measurements and computations.

The computations needed to make a determination of financial maturity contain many assumptions: the rate at which trees will grow in the future, future markets for wood, future stumpage values, and the returns of alternative investments. At best, such computations are rough approximations; at worst, they can be manipulated to show predetermined results. Also note that this method of calculating the diameter at which to harvest trees is also affected by the timeframe in that it doesn’t consider the financial return (or lack thereof) of the trees that will grow on the land after the current trees have been harvested. Once again, the question being asked relates to maximizing financial return over the near term, not over centuries.

Make room for the little trees to grow. This argument for diameter-limit cutting is based on the assumption that the small trees on a woodlot would rapidly grow to become big ones if only they had room to grow. The reality of forests is that some trees need to die in order for there to be enough resources – light, water, nutrients – for others to keep growing. In a forest that isn’t harvested, the competition means some trees will be “winners” while most of the others will die. There is a strong correlation between the relative diameter of trees of the same age and species and how well each is doing in the competition; in other words, the stronger trees are bigger. In a diameter-limit cut, we are typically harvesting the winners and leaving behind the losers, the “little trees,” in the hope that they will then grow rapidly.

The problem with this thinking is that the “little trees” are often about the same age as larger trees nearby. They’re not necessarily young trees waiting for their opportunity; they’re old trees that haven’t flourished. Whether or not these trees can respond to their greater access to resources and start growing rapidly depends on many factors, including their species, age, and condition, and the site’s characteristics. In many cases, they respond slowly or not at all. In high-quality forest management, the future growing potential of all trees (seedling through canopy) is assessed when making management decisions about what trees to harvest. Making a blanket assumption that the small trees will grow is a formula for disappointment.

Another consideration is the genetic implications for the future stand, as trees will usually reclaim a woodlot in the Northeast no matter how it was cut. The biggest trees produce the most pollen and seeds, and some of the seeds will certainly carry the genetic characteristics that helped make their parents winners in the competition for resources. Surely, for the long term, we’d prefer to have the progeny of these trees rather than the progeny of trees that were losing the competition.

Is Making the Most Money a Good Basis for Forest Management Decisions?
 

A common thread in the above discussions is money, with the implicit assumption that maximizing money should be at the heart of forest-management decisions. After all, money is the common denominator by which we make “rational” decisions in the modern world. And, since money has time value, a dollar today is worth more than a dollar tomorrow.

But is making the most money, over whatever timeframe you want to use, a good basis for forest-management decisions? How central a role should financial considerations have in these decisions?

There are both philosophical and practical dimensions to this question. We recognize that forests provide many priceless benefits for which the landowner receives no financial compensation: ecological services such as clean water, clean air, flood control, carbon sequestration, and weather amelioration; recreational opportunities; wildlife habitat; and a beautiful place to take a walk. A free-market capitalist might argue that this is just fine – if the markets decide that these things are worth paying for, then they will be paid for, and in the meantime, they should be ignored in making management decisions. But should these values really be ignored just because the markets don’t reward the landowner for them? Do we have responsibilities beyond our own near-term financial well-being?

The answer to this is tied directly to the reasons why landowners choose to own land rather than doing other things with their money. For major timber companies, the primary reason for owning land has been to ensure a reliable supply of raw material for their mills. As they’ve discovered in recent decades, they can often realize a better return on their investment by selling the land and restructuring their companies, so they’re doing just that: selling the land, primarily to timber investment management organizations (TIMOs) and related entities. The primary motivation of these new landowners is to make money for their stockholders and clients, over relatively short timeframes.

image
These two sugar maples are both 16 inches in diameter. The tree on
the left is old and growing slowly, which you can tell from the
appearance of its bark. The tree at right is young and
vigorous and is putting on growth so quickly it looks like it’s growing
right out if it’s bark. Tight bark like this is a sign that a tree is thriving
and can put on much more growth. If everything else
were equal, it would make more sense to cut the older tree and let
the younger tree grow to its full potential.
 

For those of us who own “non-industrial” woodlots – and collectively we own a huge portion of the Northeast – the motivations are mixed. There are the feel-good aspects of simply owning a piece of land, having a place for private recreation, and securing a firewood supply. There are investment aspects of diversifying a portfolio, having a hedge against financial problems (by selling timber or even the land), and securing a source of retirement income. There are also the hobby aspects of working with the land and learning about and managing the forest. For almost all landowners, financial considerations are a part of the equation, including the eventual sale of timber (even if only to pay for the costs of owning and managing the land) and, perhaps, the land itself.

Thus there is a continuum of landowners: from those harvesting their forest to maximize immediate financial gain (characterized by diameter-limit cutting and high-grading); to landowners looking to maximize financial gain over a longer time period; to landowners looking to receive (and provide to others) a multitude of benefits from the forest over the very long term. This last category includes people who make management decisions based more on ecological considerations than financial ones, though not necessarily devoid of financial considerations altogether. Ecologically based forest management can yield excellent financial returns over the very long run.

From the perspective of our society as a whole, there is good reason to discourage any timber harvesting whose primary aim is to maximize immediate financial gain. When carried out on a wide scale, such harvests reduce the long-term availability of high-quality logs from the region – the very logs that form the basis for the value-added businesses that are an important part of the region’s economy. They also diminish the ecological services the forests provide.

To counter this short-sighted harvesting, the states in the Northeast have enacted a variety of laws, such as those limiting large clearcuts to where it is silviculturally appropriate and controlling “liquidation cutting,” and others providing reduced property taxes to landowners who manage their forestland in accordance with an approved forest-management plan.

There’s no denying that short-term financial considerations sometimes dictate harvesting valuable trees prematurely. For generations, people have held onto woodlots as a safety valve against financial catastrophe. That’s understandable, but it’s a whole different matter when the prevailing way of doing business dictates short-sighted harvesting as a matter of course. In that case, when people unwittingly remove value before it has really come to fruition, there are no winners. Diameter-limit cutting is a tool of the past, not of the future.

Irwin Post is a forest engineer living in Chester, Vermont. He chooses to manage his own land, much of which has suffered from past high-grading, in an ecologically-based manner.

 
Discussion
  1. Paul Catanzaro → in Amherst, MA
    Dec 05, 2008

    Diameter limit cutting and its more common relative, high-grading, come with impacts landowners should understand.  UMass Extension recently developed a pamphlet about high-grading based on the scientific research surrounding diameter-limit cutting to help inform landowner decisions.  To see a PDF of the pamphlet, visit: http://www.masswoods.net/pdf/High_Grade_Harvesting.pdf.  Send email to .(JavaScript must be enabled to view this email address) if you would like hard copies.

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