Forestry as an investment 2023

The real return on investment in wood production in non-industrial private forests was 10.4% in 2023. The return was boosted by the rise in wood prices, which has a large impact on the return index calculated by the Natural Resources Institute Finland (Luke). Returns excluding the change in stumpage prices were 4.1%.

• Return on wood production in non-industrial private forests was 10.4% in 2023 in real terms, up by four percentage points from the previous five years’ average.
• Earnings from wood sales accounted for +3.4, wood production subsidies for +0.1 and the value of net increment of the growing stock for +1.0 percentage points of returns. The increase in the stumpage price level increased the felling value of private forests used as capital value, affecting the total return by +6.3 percentage points. In contrast, total wood production costs reduced returns by 0.4 percentage points.
• In terms of regions, return on investment in wood production ranged from 8.2% to 12.1% in Mainland Finland.
• The change in stumpage prices increased returns in all regions. In other words, the prices paid for wood increased more than the monetary value decreased. Returns excluding the change in stumpage prices were 4.1%.
• In the whole country, the impact of the net increment of the growing stock had an impact of 1% on returns. This means that the value of the growing stock was higher than that of removals. The net increment had a negative impact on returns in five regions. In other words, the value of the growing stock was lower than that of removals in the region.
• In the calculation of returns, earnings, expenditure and the value of net increment are proportional to the stumpage value calculated on the basis of the volume of standing trees and stumpage prices. In 2023, the stumpage value increased to EUR 71 billion.

Background information about the statistics

Return on investment in wood production published in the statistics on forestry as an investment is a return index calculated on the basis of felling, standing sales prices, state forestry subsidies, wood production expenditure and growing stock data. The calculation relates income and costs to the stumpage value of the stand, calculated based on the volume of trees and standing sale prices.

The data are based on Luke’s statistics and data on the growing stock in forest land for wood production in the National Forest Inventory (NFI). Results based on NFI measurements conducted for 2018–2022 were used in the growing stock calculations for 2020–2023. In the statistics, data on the most recent three years are preliminary, as new inventory data are used to specify the growing stock data in the calculation.

Changes in the monetary value are based on the cost-of-living index (1951:10=100).