Tree breeding model to assess financial performance of pine hybrids and pure species: deterministic and stochastic approaches for South Africa

Financial performance of the P. patula × P. tecunumanii, P. greggii × P. tecunumanii, P. taeda × P. tecunumanii hybrids and their parental species was studied for South Africa. A model was developed for use in determining the profitability of a tree-breeding program (TBP) with pine hybrids in commercial plantations. Growth measurement data were collected in four, 12-year-old genetic trials on Mondi and Sappi land holdings in South Africa. Growth models developed for P. patula and P. taeda in South Africa were used to infer models for the other taxa and to calculate the optimal financial rotation age at discount rates of 6 and 8%. Financial data on pine plantations were collected from different sources in South Africa. Optimal rotation lengths in this study were found to be between 12 and 16 years for pulpwood and 17 years for sawtimber. The model output shows the net present value (NPV), the internal rate of return, and the minimum area that a tree grower has to plant every year in order to justify the investment in a TBP. A stochastic approach with Monte Carlo simulation showed that the sensitivity of NPV to uncertainty in the wood price was greater than that for the planting, harvesting, and transport costs.