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Economic analysis of different models of shelterbelts used to protect hog barns

Economic analysis of different models of shelterbelts used to protect hog barns. André Vézina, forest engineer, M. Sc. Christian Rivest, technologist Frédéric Lebel, rural economist. Breakdown of the presentation. History of the project

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Economic analysis of different models of shelterbelts used to protect hog barns

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  1. Economic analysis of different models of shelterbelts used to protect hog barns André Vézina, forest engineer, M. Sc. Christian Rivest, technologist Frédéric Lebel, rural economist André Vézina, ITA campus La Pocatière

  2. Breakdown of the presentation • History of the project • Description of windbreaks and the farm that is seeking protection • Description of the economic parameters • Results André Vézina, ITA campus La Pocatière

  3. Why conduct an economic study? • Arguments to convince the producers • Lack of information on the subject • Great demands for windbreaks • Momentum needed to adopt this new way of doing things André Vézina, ITA campus La Pocatière

  4. History of the project • Project conducted by the Syndicat des producteurs de porc de la Mauricie • Evaluate the economic stakes of planting windbreaks around livestock buildings • Evaluate various windbreak models • Develop a decision-making tool for consultants André Vézina, ITA campus La Pocatière

  5. Collaborators • Guy Beauregard, MAPAQ • Serge Dupond, MRC de Maskinongé • Camille Caron, MAPAQ • Jean-Pierre Hivon, Le groupe Envir-Eau-Sol inc • Steeve Lampron, Syndicat des producteurs de porc de la Mauricie • Raymond Leblanc, Fédération des producteurs de porc du Québec • Patrrick Lupien, Syndicat des producteurs de bois de la Mauricie • Alexandre Tourigny, UPA de la Mauricie Project paid for byCDAQ express André Vézina, ITA campus La Pocatière

  6. Methodology • Collection period: period required to recover investment • Discounted margin:Revenues – expenditures The resulting margins have been adjusted to constant dollars using a year of reference while keeping in mind the historic discounting rate. André Vézina, ITA campus La Pocatière

  7. Methodology • The inflation rate is based on historic price indexes at time of purchase • Opportunity cost for the rent for money based on a historic discount rate • Simulations over 40 years to take into account the harvest of the hardwood trees André Vézina, ITA campus La Pocatière

  8. Reduction in heating costs • Hedgerows aged 0 to 10 years: 0% • Hedgerows aged 10 to 20 years: 2,5% • Hedgerows aged 20 to 40 years: 10% These savings apply to the models with at least one row of non-deciduous trees. For the hedgerows made up of deciduous trees only, the reduction is only 40% of the rates listed above. André Vézina, ITA campus La Pocatière

  9. Reduction in snow removal costs • Hedgerows aged 0 to 5 years: 0% • Hedgerows aged 5 to 10 years: 10% • Hedgerows aged 10 to 40 years: 20% These savings apply to the models with at least one row of non-deciduous trees or one row of shrubs. André Vézina, ITA campus La Pocatière

  10. Revenues • Wood prices listed by the buyers in June 2006 • Wood volumes from windbreaks were validated by field measurements during the summer of 2006 • Harvesting revenues from lumber • The tops of hardwood trees are also sold as firewood André Vézina, ITA campus La Pocatière

  11. Revenues • Fruit harvest: • Yields and prices have been calculated using data on white elderberry from the CEPAF (1.25 kg/stem/year) André Vézina, ITA campus La Pocatière

  12. Establishment costs • For a 700 m hedgerow planted on plastic mulch (70% grant included): • Costs for purchasing and vegetation transportation • Costs for material (plastic mulch, broches and collerettes) • Labour costs associated to preparation and plantation • Soil preparation André Vézina, ITA campus La Pocatière

  13. Maintenance costs • Replacement of trees that have died during the first year • Mowing during the first 5 years • Shearing from 2 to 10 years • Pruning from 10 to 30 years André Vézina, ITA campus La Pocatière

  14. Loss of harvesting land • 50% of the establishment area • Width of the hedgerow adjusted according to the age and the number or rows • Loss of revenue from one rotation • Corn-grain/corn-grain/soya André Vézina, ITA campus La Pocatière

  15. Windbreak models to protect livestock buildings • 6 models recommended in eastern Canada • 1 to 3 rows of trees or shrubs • Height of vegetation at planting stage: 30-60 cm (except for one model where it measures 1.5 to 2 m) • Length of the hedgerow: 700 m • Plantation on plastic mulch André Vézina, ITA campus La Pocatière

  16. Single-row models • Non-deciduous trees • Spruce and hybrid poplar • Hardwood species and shrubs • 2 metre spacing between vegetation André Vézina, ITA campus La Pocatière

  17. André Vézina, ITA campus La Pocatière

  18. André Vézina, ITA campus La Pocatière

  19. Hybrid poplar-spruce with 2 m spacing, 2 years, La Pocatière André Vézina, ITA campus La Pocatière

  20. André Vézina, ITA campus La Pocatière

  21. André Vézina, ITA campus La Pocatière

  22. Red ash – Red oak (17 years, 2.5 m) Sandy loam, St-Aubert de l’Islet André Vézina, ITA campus La Pocatière

  23. 2- or 3-row models • 2 rows: Hybrid poplar/non-deciduous trees • 2 rows: Hardwoods/non-deciduous trees • 3 rows: Hybrid poplars/non-deciduous trees/hardwoods André Vézina, ITA campus La Pocatière

  24. André Vézina, ITA campus La Pocatière

  25. White spruce with 3 m spacing FRR-phyo-CHGF-viburnum with 2 m spacing Hybrid poplar with 2 m spacing 2 years, sandy loam, St-Pascal de Kamouraska André Vézina, ITA campus La Pocatière

  26. After 5 years André Vézina, ITA campus La Pocatière

  27. Description of the farm seeking protection • Start-to-finish type of farm • 150 sows producing 2924 swine • 915 swine at finishing stage • maternal pig house - 766 m2 • finishing pig house - 945 m2 • farm road - 300 m • heating costs: $10 000/year André Vézina, ITA campus La Pocatière

  28. Results • Collection period: period required to recover investment. • Discounted margin: Revenues – expenditures. The resulting margins have been adjusted to constant dollars using a year of reference while keeping in mind the historic discounting rate. André Vézina, ITA campus La Pocatière

  29. André Vézina, ITA campus La Pocatière

  30. Distribution of cumulative discounted margin for a single-row windbreak of hybrid poplar and spruce Revenues from heating savings Revenues from snow removal savings Revenues from timber harvest André Vézina, ITA campus La Pocatière

  31. Distribution of cumulative discounted margin for a 3-row windbreak of hybrid poplar, spruce and hardwoods Revenues from heating savings Revenues from snow removal savings Revenues from timber harvest André Vézina, ITA campus La Pocatière

  32. hardwood poplar collection period snow removal heating André Vézina, ITA campus La Pocatière

  33. Impacts of grants and large trees André Vézina, ITA campus La Pocatière

  34. Distribution of cumulative discounted margin for a single-row windbreak of hybrid poplar and spruce Costs of establishing the hedgerow Costs due to loss of harvesting land Maintenance costs André Vézina, ITA campus La Pocatière

  35. Distribution of cumulative discounted margin for a 3-row windbreak of hybrid poplar, spruce and hardwoods Costs of establishing the hedgerow Costs due to loss of harvesting land Maintenance costs André Vézina, ITA campus La Pocatière

  36. Summary (discounted margin) • Flips to the plus side in 10 to 20 years • Between $35 000 and $40 000 at the end of 40 years • Main revenue: reduction in heating and snow removal costs • Main cost: maintenance André Vézina, ITA campus La Pocatière

  37. Summary • A single row of non-deciduous trees provides a slightly lower discounted margin than those of 2 or 3 row hedgerows also including hardwoods or poplars that can be harvested. • However, the maintenance, harvest and wood tranformation required for hedgerows with two or three rows generate more economic activity. André Vézina, ITA campus La Pocatière

  38. Summary • Furthermore, it is much easier to ensure long-term protection with the models using two or three rows rather than just one. • Finally, the benefits to biodiversity and carbon sequestration are generally superior in the models with more than one kind of vegetation. André Vézina, ITA campus La Pocatière

  39. Conclusion • Have to quantify the other EGS (ecological goods and services) stemming from shelterbelts • Carbon sequestration • Biodiversity • Landscapes André Vézina, ITA campus La Pocatière

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