Summary of the Shelterbelt Economic Analysis

 
 
 

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The aim of the economical analysis conducted with the respect to shelterbelts is to calculate the break-even corn yields within the sheltered zone that are necessary to offset the costs of establishing and managing the shelterbelts. We assumed that if the shelterbelt project is to be economically feasible, financial revenues received from the increased corn yields (yields that are obtained above normal yields in unsheltered field) have to cover the costs of establishing and managing the shelterbelts.

Four types of shelterbelts were taken into consideration: a poplar shelterbelt (Populus spp.), two types of spruce shelterbelt (Picea spp.) and a mixed shelterbelt consisting of poplar, silver maple (Acer saccharinum) and shrubs.

The basic designs are as follow. Poplar shelterbelt has four rows with a spacing of 10 feet between rows and four feet within a row. One of the spruce shelterbelts has two rows with a spacing of 15 feet between rows and 10 feet within a row. The other spruce shelterbelt has four rows with a spacing of 10 feet between rows and 10 feet within a row. The mixed shelterbelt is L-shaped and has three rows; one row each of poplar, silver maple and shrubs. Trees have been planted in spacing of 11 feet between rows and five feet within a row. On the other hand, shrubs have been planted with five feet between rows and five feet within a row.

Every shelterbelt was analyzed using two management scenarios: extensive and intensive. The extensive management scenario included costs of site preparation, planting, replanting, maintenance, tree removal and land rent. On the other hand, intensive management scenario included all the costs mentioned above and additionally costs of site preparation and establishing a new shelterbelt. The intensive management scenario assumes that a shelterbelt will be cultivated in perpetuity. In addition, management scenarios were evaluated assuming low and high costs. Further, each shelterbelt was evaluated at five rotation lengths: 10, 20, 30, 40 and 50 years.

After the costs of establishing and managing the shelterbelt had been identified, net present value costs were calculated across five rotation lengths. In each rotation length, shelterbelts were evaluated with respect to both management scenarios and with respect to both cost options.

Calculations reveal that the least expensive shelterbelt project was the mixed shelterbelt planted at low cost option with extensive management scenario and a 50-year rotation. In this case, the shelterbelt requires the lowest break-even corn yields in each of three lengths of the sheltered zone. To illustrate, the break-even corn yield within the 5H sheltered zone (H refers to the height of the shelterbelt) is 3.23 bushels acre^-1 year^-1, within the 10H sheltered zone is 1.62 bushels acre^-1 year^-1 and within 15H sheltered zone is 1.08 bushels acre^-1 year^-1 (see Figure 1). On the other hand, the most expensive shelterbelt project is a spruce shelterbelt planted in four rows at high cost option in the intensive management scenario and a 10-year rotation. Within the 5H sheltered zone, the break-even corn yield is 86.54 bushels acre^-1 year^-1. Within the 10H sheltered zone, the break-even corn yield elevates to 43.27 bushels acre^-1 year^-1, whereas within the 15H sheltered zone, the break-even corn yield is 28.85 bushels acre^-1 year^-1 (see Figure 2). All break-even yields were based on a corn price of $2.52 per bushel.

On a balance, it has been observed that the highest break-even yields are required within the shortest length of the sheltered zone (5H). This takes place because the present value cost is spread over relatively few acres. As the sheltered zone extends, because of height growth of the trees, the number of sheltered acres increases and the break-even yield is lowered. Thus, it is clear that break-even yields depend not only on the cost of the shelterbelt, but also on size of the sheltered zone. The size of the sheltered zone is in turn determined by the height growth rate of the shelterbelt. Further, the length of the rotation has a significant impact on the minimal required break-even yield to cover the shelterbelt cost. The highest break-even yields were required within the shortest rotation (10 years), while the lowest were required within the longest rotation length (50 years). Finally, fluctuations in price of corn have significant impact on break-even yields. Higher prices provide greater financial returns and, therefore, required break-even yields would be lower. On the other hand, a lower corn price would result in required higher break-even yields.