Forestry as an investment 2018 (provisional)

In 2018, the increase in stumpage prices raised investment returns on wood production higher than in years. According to preliminary data, returns on non-industrial private forestry were more than 13 per cent in real terms. Compared to the previous year, returns doubled and were 10 percentage points higher than the ten-year average. The last time returns exceeded 10 per cent was in 2010 when stumpage prices recovered after the 20 per cent decline in 2009.
The increase in stumpage prices accounted for 8.8 percentage points of the returns, profit from the sale of wood made up 4.3 percentage points, the value of net increment comprised 0.5 percentage points and wood production subsidies covered 0.1 percentage points. Total wood production costs reduced total returns by 0.6 percentage points.
The impact of net increment on returns was negative in eight regions in Southern Finland and in the Kainuu region. This means that the value of felled trees was higher than the value of trees that grow in their place.
In terms of regions, returns were 10–17 per cent in Mainland Finland. The impact of the increase in stumpage prices on total returns was relatively stable, i.e. 8.6–9.0 percentage points from one region to the next.
The wood calculation includes the results of the most recent National Forest Inventory (VMI12) that are based on measurements conducted in 2013–2017.
In the calculation of returns, income, costs and the value of net increment are proportional to the stumpage value calculated on the basis of timber volumes and stumpage prices. In 2018, the stumpage value was approximately EUR 50 billion.

Investment return in wood production (deflated using the cost-living index)

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