Introduction
The Brooks and Neil Tree Investment Chart (BANTIC) is a Microsoft Excel spreadsheet that computes the volume, value, and annual rate of return of standing trees. The user enters current log prices by top end diameter (dib) and grade (2, 3, 4 clear faces). The spreadsheet automatically computes volume, value, and annual rate of return for trees from 10 to 30 inches diameter breast height (DBH) having logs with 2, 3, and 4 clear faces (CF). The user can create a separate sheet for any number of species by using the COPY SHEET feature in Excel. The spreadsheet uses the International 1/4-inch volume table to compute volume; however, the user can enter any desired volume table for 10-foot logs and the spreadsheet will use those volumes.
BANTIC computes volume and value of the first two 10-foot logs in the tree. Ten feet is commonly the minimum length for veneer log specifications, thus it becomes the shortest length log that can bring the premium veneer log prices. Most hardwood trees contain very little, if any, quality sawtimber or veneer above 20 feet. Also, for hardwood trees that contain veneer logs, most of the value is contained in the butt 20 feet. Including the value of logs above 20 feet would not increase the value substantially and would not change the rate of return.
Description of the Spreadsheet
An example of a BANTIC spreadsheet is shown in figure 1.
Log prices are found in cells C5 to E14 and H5 to J14. The log prices that come with BANTIC are actual prices being paid by a hardwood mill in Vermont. The user can enter any set of log prices. Stumpage price log values can be used by entering mill prices less logging and transportation costs.
The log rule volume table used in the spreadsheet computations is found in cells M2 to P14. BANTIC comes with the International 1/4-inch volume table. The user can enter any volume table.
The computations are found starting in row 20 of the spreadsheet. There are nine sets of computations for trees from 10 to 30 inches DBH, one for each combination of the three log grades (4CF, 3CF, and 2CF) for the butt and upper 10-foot logs. The first set is for butt log grade 4CF and the upper log 4CF. The second set is for butt log grade 4CF and the upper log grade 3CF, and so on.
The headings found in the computations are as follows.
DBH is the diameter outside bark at breast height (4.5 feet).
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| Figure 1. Example of BANTIC spreadsheet |
DBHIB is the diameter inside bark at breast height. We simply subtracted 1.5 inches from DBH (outside bark) for trees 10 to 17 inches DBH and 2 inches for trees over 17 inches DBH.
SCAL.DIB or scaling dib is the top end diameter inside bark rounded down to the nearest inch. It was computed using a form class of 79. Top diameter inside bark of the butt 16-foot log was computed as 0.79 times DBH. Top end diameter inside bark of the bottom 10-foot log was computed assuming a uniform taper from DBHIB to the top of the butt 16-foot log. The same taper was assumed from 16 feet to the top the second 10-foot log.
LOG VOL is the log volume and is computed using the log rule volume table found in cells M2 to P14. BANTIC comes with the International 1/4-inch log rule entered in these cells. The user can enter any desired log volumes in this section of the spreadsheet.
LOG VALUE is simply the log volume times the price for the appropriate scaling dib and grade log.
TOTAL TREE VALUE is the sum of thb values of the two 10-foot logs.
ANNUAL RATE OF RETURN is computed using the total tree value compared to the total tree value of a tree with DBH 2 inches smaller. The growth rates used to compute the annual rate of return are 3, 5, 7, and 10 years to grow 2 inches DBH. This equates to 3,5,7, and 10 rings per inch of radial growth, respectively. Looking at figure 1, we can see that an 18-inch DBH tree with the first two 10-foot logs grade of 4CF and growing at a rate of 2 inches every 7 years has an annual rate of return of 5.3 percent. In other words, the total tree value of a 16inch DBH tree is $138; an 18-inch DBH tree has a value of $197. Increasing in value from $138 to $197 in 7 years equates to an annual rate of return of 5.3 percent.
RATE OF RETURN CALC, an annual rate of return calculator, is found in row 17, just below the Log Prices and Log Volume Table sections. This line simply calculates the annual rate of return for any time period, any beginning value, and any ending value. The annual rate of return calculator shown in figure 1 uses the values for a 16-inch DBH and a 20-inch DBH tree ($138 and $318). If the tree grew from 16 to 20 inches DBH in 10 years, it would have an annual rate of return of 8.7 percent. The user can change any of the three variables (years, beginning value, and ending value) in cells E17, 117, or M17 and the spreadsheet will automatically compute the annual rate of return in cell 017.
The spreadsheet is protected so that the user cannot make any changes in the part of the spreadsheet that computes values and annual rate of return (below row 19). Only the log prices and log volumes (rows 6 through 15) and the values in the rate of return calculator (row 17) can be changed.
Those cells that can be changed are displayed in red on a color monitor.
Applications
We will discuss three applications of BANTIC: determining financial maturity, calculating stand value, and evaluating cultural treatments.
The rate of return calculations can be used to determine when to cut trees that are financially mature. The user simply compares the rate of return found in BANTIC to an alternative rate of return. Those trees that are making less than the alternative rate of return are financially mature and are eligible to be cut. For example, using an alternative rate of return of 6 percent, figure 1 shows that for a DBH growth rate of 2 inches in 7 years, trees would generally be making at least a 6 percent rate of return until they reach 26 inches DBH. The growth rate of the trees needs to be accurate and can best be determined by remeasuring DBH of permanently identified sample trees.
Stand value can be estimated from stand inventories by using the values for various species computed by BANTIC. As previously mentioned, most of the value in sawlog-sized trees is contained in the lower 20-foot portion of the trees. This is especially true when trees contain veneer logs that command prices three or four times that of sawlogs. A range of stand values can be estimated using different log grades.
BANTIC can also be used to evaluate cultural treatments. For example, consider the cost of removing low value trees from a sawlog-sized hardwood stand that would result in increasing the residual tree growth rate from 2 inches in 10 years to 2 inches in 5 years. Figure 1 shows the value of 16-, 18-, and 20-inch trees as $138, $197, and $318, respectively. The 10-year value increase of 16-inch trees in untreated stands would be $59, while that in treated stands would be $180. The treatment resulted in an increased value of 16-inch trees of $121. Data from an inventory of the stand could be used to compute the treated and untreated future stand values and evaluate the profitability of the treatment.
Summary
The Brooks and Neil Tree Investment Chart (BANTle) is a Microsoft Excel spreadsheet that can be used to determine financial maturity of standing trees, estimate stand value, and evaluate cultural treatments. It automatically computes volume, value, and annual rate of return for trees from 10 to 30 inches DBH having logs with 2, 3, and 4 clear faces. BANTIC is a very powerful tool because the user enters current local log prices, which makes the results applicable for any species in any geographic region. The user can also change the log volume table, and the spreadsheet will use those volumes in its computations.
Copies of the program are available from the Forest Service at the following address:
Use one of the following links to download the program: BANTIC.xls the spreadsheet in Microsoft Excell Office97 version BANTIC4.0.xls the spreadsheet in Microsoft Excell v4.0 README - BANTIC.txt Description of the distribution disk in text format The user must have Microsoft Excell installed on the computer in order to use the spreadsheet. To use the spreadsheet, OPEN the Microsoft Excell program and OPEN the appropriate version
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USDA Forest Service
Northeastern Area State & Private Forestry
PO Box 640
Durham, NH 03824-0640
phone: (603) 868-7692
fax: (603) 868-7604