Assessing the economic viability of loggers operating tree-length harvest systems in the Northeast

Abstract

Economic sustainability of logging businesses is critical to successful forest management. Rising expectations and negative market trends can increase logging costs. This study seeks to examine factors influencing logger profitability across a variable forested landscape. Interviews were conducted with loggers across New York and Northern Pennsylvania. Throughput accounting was used to calculate operating expenses, profit margin, and return on investment (ROI) of individual jobs. Regression analysis identified significant variables influencing profit and ROI. Almost half of the logging operations observed were losing money on individual jobs. Loggers required increases in contract rates between 5% and 95% to achieve a positive ROI. The correlation between contract rates and profit margin showed no statistically significant relationship. Total harvest site acreage, total access system distance, harvested volume per acre, and hours spent implementing BMPs were found to be statistically significant when predicting profit.