Forest Management


Fiscal Management

Financial Management:
SFMA 2011 wood product volumes and buyers.
SFMA 2011 wood product volumes and buyers.

It is important to remember that the SFMA is not a part of a processing facility, and in accordance with the Trust communications, never will be. Consequently, the earning potential of the SFMA is based on the ability to increase the yield and quality of wood products available on the SFMA. The wood products resulting from current harvesting are primarily sold on a weight basis with the SFMA retaining ownership over the wood until it is purchased by a mill or other entity. Harvesting and trucking contractors are compensated through a payment for services arrangement also on a weight basis. The harvest of 20+ million pounds of wood products per year, generates considerable cash flow, with most income passing through to pay for harvesting service costs. Gross revenues from a typical year of SFMA operations equal roughly 30% of the annual expenditure levels of the Baxter State Park operating budget. Until 1995, the SFMA was operating primarily on a stumpage basis and collected only revenues from the harvest contractor. These revenues were deposited directly into the Park’s operating account and were reflected in the year-end financial reports. After the shift to a service cost contract in 1995, the large amounts of gross revenues inflated the Park’s overall budget by 50%, mostly with pass-through money. To alleviate this situation, in fiscal year 1996 the Bureau of Budget established a new “Enterprise Fund” account to gather and distribute gross wood products revenues from mills and distribute service cost and road toll payments. At the end of each operating season and near the end of each fiscal year (usually in May) net revenues from SFMA operations are transferred from the Enterprise Fund to Baxter State Park’s operating account. In both 2011 and 2012 a $30,000 balance is left in the account to provide an operating cushion until cash flows resume with summer harvesting activities.

Wood Product Markets and Sales:
SFMA wood markets by 2010/11 net revenue values.
SFMA wood markets by 2010/11 net revenue values.

A variety of markets are available for SFMA products. The profitability of these markets is often marginal given the long haul distances from stump to mill and the cost harvesting and transportation. The principle markets for the SFMA in 2012 are: Pleasant River Lumber in Dover, Gardner Chipping in Dolby, the East Millinocket Paper Mill, the Premium Lumber concentration yard in Brownville, Huber Engineered Wood Products in Easton, and the Huber Resources Hardwood Log Processing facility in Dolby (Figure C.6). Spruce and fir saw logs are the dominant product in terms of net revenues (Figure C.8) and volumes delivered (Figure C-7). Harwood pulp volumes are substantial, but the net revenues from these products are just above break-even levels. Softwood pulp volumes are below those of hardwood pulp but net revenues are greater.