ECONOMICS OF REDBERRY JUNIPER CONTROL
IN THE ROLLING PLAINS
Phillip Johnson, Alfonso Gerbolini, Don Ethridge, Carlton Britton, and Darrell Ueckert
Introduction
The infestation of redberry juniper
(Juniperus pinchotii) is a major problem on
Texas rangelands, particularly in the Rolling
Plains and Edwards Plateau regions. The
occurrence of redberry juniper reduces the
capacity of these lands to support livestock and
wildlife, as well as reduces the amount of water
that may be recharged into underground
aquifers. As rangelands have become infested
with redberry juniper, the livestock carrying
capacity of these lands has decreased as forage
production has decreased. The 1982 Texas
Brush Inventory (TBI), conducted by the
National Resource Conservation Service
(NRCS) identified 99.3 million acres of Texas
rangelands infested by 50 noxious brush
species. Ansley, Pinchak, and Ueckert (1995)
showed evidence of a substantial increase in the
distribution of redberry juniper in a specially
defined area of Texas. This area constituted a
65-county area in northwest Texas, including
counties in the High Plains, Rolling Plains, and
the Edwards Plateau regions of Texas.
Redberry juniper infestations in this 65-county
region had increased from 6.0 million acres in
1948 to 9.9 million acres in 1982. This
indicates a 61% increase in the distribution of
redberry juniper over the 34-year interval, with
the percentage of the 65-county area infested by
redberry juniper increasing from 16% to 26%.
The 1987 National Resources Inventory (NRI)
indicated that moderate and dense infestations
of redberry juniper in the Rolling Plains and
Edwards Plateau regions had increased by 16%
from 1982 to 1987 (USDA, 1990). A
comparison of the 1982 and 1987 brush
inventories indicate an increase in the severity
of the brush problem in Texas. The general
objective of this study was to evaluate the long-run economic feasibility and effects of
biological and economic conditions on
economic feasibility of redberry juniper control
in the Rolling Plains Region
Analytical Framework
The control of redberry juniper should be
considered as an investment in the long-term
productivity of rangeland. The costs of control
are incurred at the time of initial treatment and
periodically thereafter for maintenance of the
control level, with benefits being realized
throughout the treatment life. The combined
treatments of initial control by chaining,
followed by prescribed burning two years later,
and a sequential re-introduction of fire is the
treatment regime used in this analysis.
Increased revenues from greater forage
production occur each year after the initial brush
control treatment, while added costs are realized
only in years when brush control treatments are
applied. For the control practice to be feasible,
the present value of added revenues from
increased livestock production must exceed the
present value of added brush control costs over
the period of analysis. A 30-year time frame
was used to evaluate the investment in brush
control as a long-term investment. This
planning horizon was chosen for two reasons:
(1) it allowed for a more realistic scenario,
considering the life of the investor, and (2) it
ensured at least two maintenance burns 13 years
apart, which is the biological maximum time
interval recommended between maintenance
burns on flat areas to obtain a high kill
percentage (Steuter and Britton, 1983).
Two time periods are important in the analysis, the time following the start of the analysis (represented as t) and the time following the last brush treatment (represented as tw). Because these two time periods occur simultaneously, canopy cover is measured in two simultaneous time-frames, CCt and CCt,tw. The function CCt represents the percentage canopy cover through time with no brush control, and CCt,tw represents the percentage canopy cover through time when brush control is applied to the rangeland. The relationship between canopy cover and time may be expressed as:
where CCt is the percent canopy cover in year t
without brush control, CCt=0 is the percent
canopy cover at time t=0, r(t) is the percent
canopy cover increase per year without brush
control, and t is as time following the start of
the analysis. CCt,tw is the percent canopy cover
at year t from the beginning of the analysis and
year tw from the last brush control treatment,
CCt,tw=0 is the level of canopy cover in years t
and tw=0, and r(tw) is the percent canopy cover
increase per year following brush control.
To understand the effects of redberry juniper
control on forage production and income,
several relationships need to be addressed. The
brush problem involves both biological and
economic phenomena. It is therefore important
to understand both the physical and financial
relationships associated with the control of
redberry juniper.
Redberry juniper is a re-sprouter; meaning
that it exhibits basal sprouting following top
removal (Steuter, 1982). Therefore, the initial
control of redberry juniper must be followed
periodically with maintenance treatments using
prescribed burning or individual tree treatments.
Figure 1 illustrates the relationship between
redberry juniper canopy cover and time. The
line labeled CCt represents the level of canopy
cover through time if brush control treatments were not
applied, while the lines CCt,tw represent the
levels of canopy cover through time with brush
control treatments being applied. The level of
canopy cover is reduced by the initial treatment
and maintained below the level of canopy cover
without control, CCt by periodic re-treatments
using prescribed burning.
Redberry juniper canopy cover and forage
production are inversely related. The forage
production relationship shown in Figure 2
represents the estimated forage production in
lb/ac with respect to percent canopy cover of redberry juniper on very shallow range sites in
the Texas Rolling Plains near Roscoe, Texas
(Gerbolini, 1996). This relationship was
estimated using data from 23, thirty-meter
transects which were randomly laid out to
measure canopy cover percentage and forage
production. Forage production was estimated at
each transect's level of canopy cover by
randomly placing 0.25 m2 quadrants along the
transect. The effect of redberry juniper canopy
cover reduces forage production at an increasing
rate up to 33.67% canopy cover. Beyond this
point forage production continues to decrease at
a decreasing rate as canopy cover increases.
The expected level of forage production at a
zero level of canopy cover is 1,148 lbs/ac.
Forage production decreases to 13.95 lbs/ac at
100% canopy cover.
The functional form of the estimated forge
production equation without brush control
treatment is expressed as:
where FPt is the production of forage in lbs/ac in year t, e is the euler's coefficient (defined as 2.718282), CCt is percent canopy cover in year t, and eBO' is the forage produced in lbs/ac when CCt =0. The functional form of the estimated forge production equation with brush control treatment is expressed as:
where FP, CC, and eBO' are as defined before,
and t,tw represents year t from the beginning of
the analysis and year tw from the last brush
control treatment.
The added forage production associated with redberry juniper control is the additional forage produced with treatment compared to that on untreated rangeland. Additional forage produced was calculated as the difference between the production of forage on treated rangeland and untreated rangeland and is expressed as:
where AFPt is the added forage production from
brush control on redberry juniper infested
rangeland in lbs/ac in year t, FPt,tw is the forage
produced on the treated rangeland in lbs/ac in
year t, and FPt is the forage produced on the
untreated rangeland in lbs/ac in year t.
Forage production was converted to livestock production using the following equation:
where ALPt is the additional livestock
production in lbs/ac in year t, and K is the
pounds of marketable livestock produced per lb
of forage, and AFPt is the additional forage
production in lbs/ac in year t. The conversion
factor K (0.020054) was estimated for the
Texas Rolling Plains region assuming 26,098
lbs of forage are required annually to sustain
one cow producing unit.
Methods and Procedures
The profitability of an investment in redberry juniper control can be evaluated using the net present value capital budgeting technique. The net present value (NPV) of the investment is the discounted cash flows at the ranch's discount rate. The net present value is expressed as:
The added revenue from livestock production was calculated as follows:
where ARt, is the value in $/ac of the additional
livestock revenue produced in year t, PL is the
weighted average price of livestock in $/lb,
AVC is the added variable cost in $/lb
associated with producing additional marketable
livestock, LS is labor savings in $/ac realized
from the brush control, and ALPt is as
previously defined. Livestock price was
estimated using the price of heifers, steers, and
cull cows weighted according to the percent
contribution of each to a marketable animal
unit.
The additional cost from control of redberry juniper was estimated by considering the cash outflows incurred from the brush treatment practices and the cost of deferment of rangeland to build up fuel for the prescribed burns. Added cost of the investment was estimated as:
where ACt is the added cost in $/ac in year t,
TCb,t is the cost of treatment b in $/ac in year t,
b is the type of brush control treatment used,
and DCt is the deferment cost of the land in $/ac
in year t. The type of brush control treatment
used was either chaining or prescribed burning.
Deferment costs were the costs associated with
accommodating livestock from the treated
rangeland on leased pastures during the
deferment period, six months prior to and six
months following a prescribed burn.
In addition to the NPV, the internal rate of
return (IRR) was used to evaluate the brush
control investment. The IRR is the discount
rate necessary to equate the present value of all
future returns to the investment costs.
Therefore, the IRR will be greater than the
discount rate used to calculate the NPV if the
NPV of the investment is positive.
The burning cycle was the time in years
between prescribed burns on the treated
rangeland. Thirteen years represents the
maximum number of years between burns that
fire can be used as a successful control measure
on redberry juniper re-establishment on flat land
(Steuter and Britton, 1983). Therefore, burning
cycles were evaluated between 2 and 13 years.
The optimum burning cycle was the burning
cycle that resulted in the highest NPV for the
investment over the 30-year time horizon.
Sensitivity analysis was performed to
determine how the economic feasibility of
redberry juniper control responded to
biological and economic variables. Net present
value was calculated at the optimum burning
cycle for the biological and economic variables
at baseline conditions and variations from
baseline conditions. Biological variables that
were changed include the percent redberry
canopy cover increase per year (r) and the initial
percent redberry canopy cover (CCt = 0) of the
rangeland. The economic variables were price
of livestock (PL), real discount rate (I), and
treatment cost (TCt). The values of the
variables at baseline and variations from
baseline values are given in Table 1. Values of
the variables at baseline conditions are: r =
2.5%, CCt = 0 = 20%, PL = $1.810/lbs, I =
10.753%, TCchain = $37.58/ac, and TCburn =
$8.73/ac. The level of redberry canopy cover
following treatments was assumed to be 5%.
Table 1.
| Variables | High | Baseline | Low |
| r in % | 5.0 | 2.5 | 1.6 |
| Cct=0in % | 30 | 20 | 10 |
| PL in $/lb | 0.895 | 0.823 | 0.750 |
| I in % | -- | 10.753 | 4.926 |
| TCchain in $/ac | 18.251 | 15.208 | -- |
| TCburn in $/ac | 4.238 | 3.533 | -- |
Results
Net present values of an investment in
redberry juniper control on very shallow range
sites in the Texas Rolling Plains were estimated
at baseline conditions for the biological and
economic variables using burning cycle lengths
from 2 to 13 years. These results are presented
in Table 2 and show positive NPV at baseline
conditions for all burning cycles. The NPV
under baseline conditions was highest at
$90.48/ac with a 7-year burning cycle, which
represents the optimal burning cycle. The effect
of variations from the optimal burning cycle on
NPV were small, which indicates that the
introduction of prescribed burns at intervals
shorter or longer than the optimum did not
decrease the NPV by a great amount. The IRR
under baseline conditions at the optimum
burning cycle was 27%. The present value
payback period at baseline conditions was 8
years, which is the period required for
cumulative net present value to become
positive, and gives an indication of the required
period to recover the investment in the brush
control treatments.
The sensitivity of NPV to changes in the biological and economic variables may be evaluated by the information shown in Table 2.
Table 2. Net present value of redberry juniper control for very shallow range sites with biological and economic variables at various values and burning cycles from 2 to 13 years.
| Biological and Economic Variables | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Burning | Baseline | ||||||||
| Cycle | Values | r low | r high | CCt=0 low | CCt=0 high | PL low | PL high | I low | TC high |
| years | $/ac | ||||||||
| 2 | 24.15 | 10.80 | 45.49 | 3.53 | 44.87 | 16.80 | 31.46 | 70.28 | 18.46 |
| 3 | 31.61 | 18.59 | 51.71 | 10.99 | 52.34 | 24.35 | 38.83 | 85.05 | 26.73 |
| 4 | 34.66 | 22.03 | 53.23 | 14.03 | 55.38 | 27.50 | 41.77 | 90.64 | 30.16 |
| 5 | 35.95 | 23.78 | 52.79 | 15.33 | 56.68 | 28.91 | 42.95 | 92.72 | 31.68 |
| 6 | 36.52 | 24.85 | 51.51 | 15.90 | 57.24 | 29.60 | 43.40 | 93.84 | 32.40 |
| 7 | 36.62 | 25.50 | 49.65 | 15.99 | 57.34 | 29.83 | 43.37 | 94.11 | 32.62 |
| 8 | 36.16 | 25.58 | 47.43 | 15.54 | 56.88 | 29.50 | 42.78 | 92.67 | 32.23 |
| 9 | 35.69 | 25.77 | 44.94 | 15.06 | 56.41 | 29.18 | 42.15 | 91.57 | 31.83 |
| 10 | 35.09 | 25.63 | 43.10 | 14.47 | 55.81 | 28.69 | 41.45 | 90.40 | 31.27 |
| 11 | 34.25 | 25.35 | 40.93 | 13.63 | 54.97 | 27.99 | 40.48 | 88.28 | 30.47 |
| 12 | 33.25 | 24.95 | 38.57 | 12.63 | 53.97 | 27.14 | 39.33 | 85.37 | 29.49 |
| 13 | 32.16 | 24.48 | 36.18 | 11.53 | 52.88 | 26.20 | 38.09 | 81.91 | 28.42 |
Two important variables regarding the
economic feasibility of redberry juniper control
are the initial canopy cover (CCt=0) and the rate
of re-infestation of the brush over time ( r). The
conditions for these variables influence the
optimal burning cycle and the level of NPV of
the treatments. As the level of CCt=0
increased, the NPV increased because higher
levels of initial canopy cover mean a greater
advantage in income with the removal of the
brush. Yet, the optimal burning cycle remained
at 7-years for all levels of CCt=0. The rate of
re-infestation had an effect on the length of
optimal burning cycle. As the re-infestation rate
increased the length of burning cycle decreased.
These results were as expected, with the lower
rate of re-infestation resulting in a longer period
between maintenance burns.
The sensitivity analysis revealed that under all
conditions specified, the NPV of an investment
in redberry juniper control was positive. The
investment was most attractive when the
discount rate is low and least attractive when the
initial canopy cover is low. An optimum
burning cycle of 7-years was found under most
conditions. The optimum burning cycle was
most sensitive to the re-infestation rate,
decreasing to 4-years with a high re-infestation
rate and increasing to 9-years with a low re-infestation rate. The present value payback
period varied from 5 years when the rate of re-infestation was at the high value of 5.0% per
year or the initial canopy cover was at the high
value of 30%, to 16 years when the initial
canopy cover was at the low value of 10%.
Conclusions
This study identified the conditions under
which control of brush on redberry juniper
infested rangelands is economically feasible on
very shallow range sites in the Texas Rolling
Plains Region. The control of redberry juniper
appears feasible under all conditions
considered, with the investment in brush control
increasing range productivity and net revenues
over the 30-year time horizon assumed for the
study. The NPV for all combinations of
conditions for the specified variables was
positive.
The optimal burning cycle for maintenance
burns was found to be approximately 7-years
under most conditions. The optimal burning
cycle was found to be most sensitive to the rate
of brush re-infestation, with a higher rate
indicating a shorter optimal burning cycle. The
sensitivity of NPV to the length of burning
cycle was low which indicates that if range
conditions should cause the need for a shorter or
longer burning cycle, the effect on NPV would
not be significant. The recommended
reintroduction of fire at 4-years for the high
level of re-infestation may be delayed a couple
of years to make the burning schedule
ecologically sustainable without realizing a
significant decrease in NPV.
Redberry juniper control is a long-term
investment that requires periodic retreatment to
maintain the benefits over an extended period of
time. The evaluation of the investment using a
30-year time horizon was intended to recognize
the need to evaluate this type of investment over
several maintenance cycles. The results
indicated that the investment is feasible over
this time period. The present value payback
periods under baseline conditions and variations
from baseline conditions ranged from 5 to 16
years, with the present value payback period
under baseline conditions being 8 years.
The returns to investment in brush control on
redberry juniper infested rangelands may be
compared to the capitalization rate of rangeland
income into rangeland values. Historically,
capitalization rates (expected rates of return) for
rangeland have been relatively low when
compared to other types of agricultural lands
and non-farm real estate. The capitalization rate
for native pasture in the Texas Rolling Plains
for 1994 was estimated at 3% (Gilliland, 1995).
A rancher with redberry juniper infested
rangeland who is considering expansion of their
operation should consider investment in brush
control to increase production instead of
additional land because the expected returns for
brush control (IRR of 27%) is higher than the
expected returns to additional land investment.
Literature Cited
Ansley, R. J., W.E. Pinchak, and D.N. Ueckert. 1995. Changes in redberry juniper distribution in northwest Texas. Rangelands. 17:49-53.
Gerbolini, A. J. 1996. Economic evaluation of redberry juniper control in the Texas Rolling Plains. Unpublished Masters Thesis, Dept. of Agricultural Economics, Texas Tech University, Lubbock, TX.
Gilliland, C. E. 1995. Texas rural land prices. Technical Report 1087. Real Estate Center. Texas A&M University.
Steuter, A.A. 1982. Ecological role and potential use of fire in redberry juniper-mixed grass habitats. Ph.D. Diss., Dept. of Range and Wildlife Mange., Texas Tech University, Lubbock, TX.
Steuter, A. A., and C. M. Britton. 1983. Fire-induced mortality of redberry juniper: Juniperus pinchotii. J. Range Mange. 36:343-345.
U. S. Department of Agriculture. 1990. National Resources Inventory Database 1982-1987. Soil Conservation Service. Temple, TX.