Estimating cost for integrated harvesting and related forest management activities

Often the deciding factor in the economical recovery of wood fuel is its relationship with some other objective such as stand establishment, stand improvement, or forest access. The costs and benefits arising from these related management activities are discussed. Two different approaches to estimating the cost of producing conventional products and fuel wood with integrated harvesting systems are also examined. With a marginal cost approach, the cost of common harvesting activities such as felling, forwarding and processing/sorting are fully allocated to the conventional products. Under a joint product approach, the cost of production is distributed among conventional products and fuel wood. A model is developed showing the distribution of cost under both approaches for seven integrated harvesting systems. The results suggest that production costs are highly variable depending on the harvesting system used and the ratio of conventional products to fuel wood. The estimated cost of fuel wood varies from $6.74 (U.S. dollars) gt−1 to $37.05 gt−1 using joint product costing and from nil to $11.04 under the marginal cost method.