White Pine For Tipping

Virginia's greenery industry consumes more than 14 million pounds of white pine tips each year, according to a recent publication from Virginia Tech. This harvest requires more than 2,600 acres of quality white pine stands, primarily plantations, each year. According to people involved in the industry such stands are becoming harder and harder to find. Since plantations are tipped, only two or three times between the ages of 7 to 11, a continuous supply of new plantations is needed.

White pine tips are an excellent income opportunity for landowners. Tipping income can more than offset the cost of site preparation, planting, and maintenance. By tipping, a landowner can recoup all establishment costs, and gain a net profit, within the first 11 years. If done properly, tipping has little or no impact on plantation growth. The plantation can be left to grow after the tipping to a sawtimber rotation, providing considerable income again upon harvest. Another option would be to clear the plantation after tipping and replant for a new stand for another tipping rotation.

Growers of white pine tips may market their product in a variety of ways. The simplest is to sell unharvested tips by the tract or boundary to wholesalers. Landowners may instead harvest their own tips and sell to wholesale buyers by the pound. Alternatively, landowners may harvest their own tips and produce their own finished greenery products for sale directly to local outlets or the public.

A study by the High Mountain Rangers Team found an average yield of 13.5 pounds of tips per tree, or more than 5,000 pounds per acre. The average price per pound to the landowner ranged from three to 10 cents. Price per pound for rolls of garland was in the range of 40 to 62 cents. Thus, a single tipping can provide an income of $150 to $600 to the landowner who sells by the tract or $2000 - $3000 to landowners who harvest their own tips.

A few larger wholesale buyers offer a Plant/Tip/Keep Contract with landowners. The tip buyer plants pines, pays for all site preparation and maintenance, and later has exclusive tipping rights for three to four years. In return, the landowner receives approximately $100 per acre (for the total length of contract), keeps the growing pines after the four-year tipping cycle is complete, and has no further obligations to the tip buyer. After the contract, the owner may allow the pines to grow to sawtimber age, may cut the pines and begin a new tipping cycle, or cut the pines and convert the site to another land use. This arrangement requires no outlay of capital, and no assumption of risk. Landowners who favor a hands-off land management approach may prefer this approach.

How good an investment can white pine grown for tips be? We have developed a spreadsheet (English; Excel format) that allows you to compute economic returns under various assumptions.

As an example, we used the spreadsheet with the assumption that sod control, trees and planting cost us $155 per acre in the first year. Maintenance mowing in years 1-4, 7 and 9 cost us $25 per acre per year. Tips harvests at age seven and nine each yielded 4,400 pounds per acre, and sell at 5 cents per pound, for a price of $220 per acre each harvest. After tipping, the stand is grown to sawtimber and harvested at age 35 at a price of $100 per thousand board feet. Even with these conservative assumptions, the annualized rate of return was 13%. For a more optimistic scenario, with yields of 5300 pounds per tipping and a price of 10 cents per pound, the rate of return was an amazing 25%.

Does it pay more to keep the stand for a sawtimber rotation or to cut it and start a new tipping rotation? With the first set of assumptions above, starting a second tipping rotation reduces the rate of return to 9%. With the second, more optimistic, assumptions, the rate of return for either rotation choice is equal at 25%. The short answer may be that short tipping rotations may be preferred if you think you can get top dollar for your tips and that the good market will continue. Otherwise, sawtimber rotations may be preferred.

This economic analysis is an example for educational purposes. Your results may vary due to changes in the market for white pine tips, or if assumed yields are not realized due to survival, disease, insect or weather problems.