Official website of the New Zealand Farm Forestry Association


Economic comparison of traditional and genomics breeding for Douglas-fir

By Damian Corbett, Heidi Dungey, Mari Suontama, June 2017.

Download SWP-T033 (pdf)

Executive summary

An economic analysis was undertaken to compare the value of the genomic and traditional breeding programmes for Douglas- fir in New Zealand. This report also attempts to demonstrate the value realised at different points in the value chain. The work was undertaken using NPV analysis for both the forest owners, and the end processors of the wood resource.

The analysis shows that there is the potential for substantial value gain form employing a genomic breeding programme compared with employing a traditional breeding programme for Douglas-fir. This value gain is present for both forest owners, and processors.

Assuming a 6% rate of return, a traditional breeding programme was shown to have the potential to deliver a benefit of $36.2 million to both the forest growing and processing sectors. Results showed that a genomics programme delivers a potential additional $11.6 million, representing an additional $290 per ha over the predicted 40,000 ha of new plantings.

Genomics delivers a potential $2.8 million to forest growers alone, with the traditional programme forecasting an overall negative NPV of $4.5 million assuming a 6% rate of return. Genomics therefore presents an NPV gain on per ha basis of $184, over the predicted 40,000 ha of new plantings. Traditional breeding with the current modelled genetic gains delivered a potential loss of NPV of $4.5 million.

Genomics delivers a potential $4.3 million (assuming a 6% rate of return) to forest processors alone, over and above the traditional breeding programme’s potential delivery of $40.7 million. Genomics therefore presents an additional NPV gain on per ha basis of $106, over the predicted 40,000 ha of new plantings.

The greatest challenge for Douglas-fir is the very long time frames, both overall and until the programs reach positive cash flow, 60 years and 40 years respectively, due to the long rotation cycle of Douglas- fir. This means the modelling takes into account 60 years of planting and management costs, including 40 years without harvesting, and only 20 years of harvest income.

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