Journal of Forest Economics > Vol 11 > Issue 3

Can wood storage be profitable? French experience after the windstorms in 1999

Sandrine Costa, , costa@nancy-engref.inra.fr Lisette Ibanez, , ibanez@nancy-engref.inra.fr
 
Suggested Citation
Sandrine Costa and Lisette Ibanez (2005), "Can wood storage be profitable? French experience after the windstorms in 1999", Journal of Forest Economics: Vol. 11: No. 3, pp 161-176. http://dx.doi.org/10.1016/j.jfe.2005.08.001

Published: 01 Dec 2005
© 0 2005 Sandrine Costa, Lisette Ibanez
 
Subjects
 
Keywords
JEL Codes:L730L800Q120
WindfallSparklingCostProfitability
 

Article Help

Share

Download article
In this article:
Introduction
Methodology
French experience
Cost analysis
Benefit analysis
Concluding comments

Abstract

The windstorms in 1999 have thrown down about three times the French annual roundwood harvest. In order to reduce the amount of roundwood coming on the French market, the French government promoted storage by funding it partly. An economic analysis has been carried out to estimate the profitability of wood storage. In the first part, the cost calculation distinguishing recurring and non-recurring costs is exposed. Data highlighted scale economies for investment costs, which are more important for long-term sites. On average, windfall has been stored for 3.5 years for a global unit cost of 17.2€/m3. In the second part, we propose a profitability calculation method. From an individual point of view, storage has not been profitable. Governmental aids have played down the global losses. Still more than 85% of created storage area had negative outcomes. In most cases, wood has not found 1999 prices which explain our results.

DOI:10.1016/j.jfe.2005.08.001