How to Successfully Invest in a Pine Plantation

pine plantation

One of the greatest resources found in the southeastern United States is pine trees. This is why there's been a thriving timber industry in this region for more than a hundred years. It's an industry that not only provides jobs and stimulates the economy: It also provides a key resource in building homes and furniture.

At the beginning of the timber industry, trees were simply harvested. Not much thought went into sustainability by replacing what was taken with new growth. But a conservation mindset replaced that model and trees were replanted following a harvest so that the growing process can be repeated.

During this same time, the industry also saw an influx of loblolly pine (Pinus taeda). Or, as it is also commonly referred to in the Southeast, a southern yellow pine. It is considered softwood and grows faster than a longleaf pine. The red clay soil of this region is also quite acidic and provides a great place for these trees to thrive.

What Is a Pine Plantation?

Pine plantations consist of pine trees planted in rows for the purpose of producing wood in a high volume for the timber industry. The seedlings are planted in orderly rows and consist of about 500 trees per acre. The ultimate goal is to harvest the trees to be sold and then repeat the process. Since wood is a renewable resource, a pine plantation is both a timberland investment and a land investment.

The Growth Cycle of Pine Trees

Before any planting is done site preparation may be needed. Depending on the abundance of quality soils within your timberland tract, the ground may need to be prepped. This process can involve spraying herbicides, utilizing controlled burns, or even till the surface. The saplings will need to be sourced via large nurseries that specialize in selective breeding for trees. Next, the saplings are planted either by hand or machine.

Once tree growth is underway, the key to maintaining a healthy pine plantation for a solid return on your investment is the process called "thinning." When you thin out the trees during the growth cycle, you are able to remove less desirable trees. These can be sold for pulp while also making sure your dominant trees have access to more sunlight and soil nutrients. This usually takes place about 10 to 15 years following the initial planting, and the landowner can make hundreds of dollars per acre depending on the amount of thinning needed, as well as the price of wood pulp.

Because the remaining trees will compete for sunlight, you have to think about the top canopy. It is important to utilize a registered forester to help you with this process as well as a logging contractor with a good reputation. In the end, will you want more tall straight trees or shorter trees with larger diameters? Be sure to consult with your forester on your goals.

The trees will continue to grow and may even crowd each other again. At about 20 years, they will approach the time where they can possibly be processed for lumber. Sections of the tree will be large enough for sawmill use, with the remainder being used in pulp. That is when you should consider either an additional thinning for a longer-term goal or go ahead and clear-cut it.

If you opt for the long goal, you may need an additional thinning before the final clear-cut. But if you wait 35 years or so for full maturity, you should end up with a good harvest of sawlog and pole trees. It's all a balance to make sure that you do what is best for the plantation and you, the landowner. The best management practices involve consulting with a forester during the key points within the process.

Is a Pine Plantation Investment a Good One to Make?

The great thing about timberland investments is that wood is a renewable resource. Forest owners are able to sell the timber to lumber and pulp mills while still retaining the land and being able to repeat the process again in the future. It's an investment that can create both revenue and value on a multi-generational level.

If you base your investments on a minimum acceptable rate of return, you can generally expect a return of 10%. This is close to the average for the stock market and higher than the average of bonds. See more information on investments within our "is land a better investment than stocks?" page.

Getting Started with Investing in Pine Timberland

Always start with the soil. This is a key aspect of a good pine plantation investment. The ground needs to be conducive to the growth of loblolly pine trees. This is why site preparation is such an important foundation.

While there may be a lot of land plots available for purchase, you'll want to find one with a good county site index best suited for pine plantations. The site index is essentially a soil map, and measures the land's fertility and ability to support pine plantations. We can help you evaluate a potential property based on this.

Choosing a Profitable Property

Location is always important in any kind of real estate. And it is no different for pine plantations. Ideally, for timber sales, you should look for property that is within a 30-mile range of a sawmill or pulp mill. You'll also want land that can handle water well and has a good road. These are all aspects that a logging crew will take into account when thinning or cutting your pine plantation. Manageability for harvesting can be just as important to consider as soil fertility in choosing the best sites for pine plantations.