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Business Plan January 2006
Executive Summary: A versatile, fast-growing hardwood is chosen as the centerpiece of Abundance Farms’ horticultural enterprise. The Paulownia tree, grown extensively in China, yields a superior quality timber product and provides an ideal environment for ‘intercropping’ other lucrative plants. Within five years, a 10 acre Paulownia crop (1000 trees) may be selectively harvested for 50,000 board-feet (bdft) of highly prized hardwood. This yield is increased to 250,000 bdft in the tenth year, which doubles to 500,000 bdft when fully mature at 15 years. Among its many advantages, Paulownia cultivation has been shown to increase yields from other plants grown in tandem with it. As a function of their thin canopy, these trees admit considerable light to the ground in the first three years. Their deep root systems draw ample moisture from the soil, increasing local humidity. This creates a ‘micro-climate’ very conducive to the growth of adjacent flora. Abundance Farms intends to raise several types of medicinal herbs and other organic crops to serve the ever-expanding Health and Wellness industry. Projected income from these products will bolster profitability prior to the first timber harvest. Land has been offered for the venture on a profit-sharing basis, considerably reducing overhead costs and risk to investors. The strength of our team rests upon the combined expertise of ecological design specialists, professional landscape architects and a real-estate developer. We also bring unique knowledge of soil dynamics that will ensure exceptionally robust products and equally strong profits. COST STUDY: 10 acre Paulownia Tree Forest Farm The following study outlines estimated setup and operating costs and potential yield for a 10 acre Paulownia tree forest farm located within central California. This model is based on an initial planting of 200 trees per acre and sets harvest times at 5, 10 and 15 years. Larger acreage will reduce overall cost due to the economy of scale. (An example is: 1,000 acres yielding 80 million bdft in 15 years.) 1st Year Set-up and Maintenance Costs for 10 acres: The number of trees per acre will vary depending on the quality of soil, climate conditions and space requirements for the various forms of intercropping (e.g., some crops require more sunlight than others).
x $38 per acre ft = $76 x 10 = $760) Total 2nd year cost 3rd Year—on-going yearly cost Bud Removal (second and third years only) Fertilizer (5 tons of compost per acre + amendments) Weed & Insect Control (organic) Water: (2 acre ft per yr.500 2.360 $ 17. planed) 1.000 Perimeter fencing: (protection from animals is required) 3.000 Perimeter Wind-break Trees: (700 trees @ $1.000 Fertilizer: (including folio feed) 2.000 500 760 $4. disked.00 per tree) $6.000 Soil Testing: 150 Soil Preparation: (ripped.500 2.50 + planting) 1. x $38 per acre ft = $76 x 10 = $760) Total 3rd year cost 4th Year—on-going yearly cost Bud Removal (second and third years only) Fertilizer (5 tons of compost per acre + amendments) Weed & Insect Control (organic) Water: (2 acre ft per yr.760 1.000 Tree Planting: (10' x 20' spacing allows room for windbreak trees) 2.760 $17. x $38 per acre ft = $76 x 10 = $760) Total 4th year cost 1.000 trees @ $3.1st Year Set-up and Maintenance Costs (Tree Cultivation Only): 200 trees per acre Tree Acquisition: (2.360 2 .000 500 760 $4.200 Drip Irrigation: (parts and installation) 750 Water: (2 acre ft per yr.000 500 760 $4.500 2.760 1. x $38 per acre ft = $76 x 10 = $760) 760 Weed & Insect Control: (organic substances only) 500 Total 1st Year Set-up and Maintenance Costs: 1st 5 YEARS: 1st Year—on-going yearly cost (see 1st year set-up and maintenance cost) Total 1st year cost (see details above): 2nd Year—on-going yearly cost Coppicing (restarting each tree from the year old developed roots) Fertilizer: (including folio feed & amendments) Weed & Insect Control (organic) Water: (2 acre ft per yr.
market for rough-sawn basswood boards is over a $1. as the trees are thinned new trees start to re-grow over and over.500 trees harvested) _________________________________ Projected Profit (Timber Harvest Only)—at 10 years Total Harvest Volume—at 15 years (500 trees x 1. x $38 per acre ft = $76 x 10 = $760) Maintenance: mowing etc. 250.760 $35.000 bdft 2.000 bdft respectively.000 bdft) (last 500 of the original 2000.000 bdft 300.000. Regrowth cycles can run for at least three cuttings over a 35 year period from the first planting.000 $727.760 per year TOTAL COST 11th–15th years @ $3. 10 years old) TOTAL at the end of 10 years (1. 15 years old) TOTAL at the end of 15 years _________________________________ TOTAL PROJECTED PROFIT (Timber Harvest. the price is expected to rise higher.00 500. These harvests can yield 50.00 Note: The trees regrow from the stump.00 per bdft. first growth cycle) Total Harvest Volume—at 5 years (1.000 trees x 50 bdft) Total Harvest Volume—at 10 years (500 trees x 500 bdft) (500 of the original 2000. The above numbers are based on “first tree growth cycles only”.000 bdft 250. as basswood becomes less available.5th Year—on-going yearly cost Fertilizer (5 tons of compost per acre + amendments) Weed & Insect Control (organic) Water: (2 acre ft per yr.760 per year TOTAL OVERALL COST—1st 15 years Projected Tree Harvest Volumes (10 acre model. Second growth harvest will start the 10th year and run through the 15th & 20th years.800.800 $18. Over the next ten to fifteen years. Total 5th year cost TOTAL COST 1st–5th years TOTAL COST 6th–10th years @ $3.400 $18.000 bdft 800.S. & 500. The current U.000 bdft $245.800 $73. 3 . First-Cycle Only): 50. In this way the forest canopy will always remain standing.000 500 760 500 $3.
800 C. growing. it is not intended to be a financial projection of future results of operations.Cover Crop Intercropping w/Alfalfa—Sample Case Study One possibility which addresses both the costs of watering trees and mowing or weeding is to grow a cover crop along with the trees. and serves as a natural weed control system. This Sample Case Study is intended illustrate the potential of planting and harvesting an intercropped forest using Paulownia trees.) Alfalfa Yields 6.500 Note: The figures discussed in this Sample Case Study are based upon a compilation of historical results and certain assumptions by Abundance Farms concerning the planting. A. 10 acres x 75% alfalfa (7. 10 acres x 75% alfalfa (7. we are projecting an even greater income from these intercropped specimens. it secondarily waters the trees resulting in an efficient double use of the water. However. weather conditions. There can be no assurance that the assumptions used by Abundance Farms in preparation of this Sample Case Study will ever come to pass. as it is our intention to grow much more lucrative crops. 6 to 12 tons per acre per year. 10 acres x 75% alfalfa (7.000) Weed Control (organic) ($10 per ac per year x 10 ac = $100) Insect Control (organic) ($10 per ac per year x 10 ac = $100) Harvesting Estimates (San Joaquin Valley) industry standards equal 6 to 8 cuttings per year. maintenance and harvesting of crops and trees. cutting and harvesting crops and trees.).400 B. that the economic results projected herein would actually occur as a result thereof. Paulownia requires 2 acre-feet of water per growing season (March through October). The alfalfa cover crop can pay for the irrigation system and annual cost of water for both trees and crops as well as create a supplemental annual income for the first three years.5 acres) 7.5 acres) 7.5 acres) (25% is lost to tree rows) 7. (Sales value = $120 to $150 price per ton. levels of care and varying methods of planting.5 ac x 12 tons per acre = 90 tons x $150 = $13.800) Fertilizer ($200 per ton x 0.5 tons per ac x 10 ac = $1. Further information on the superior benefits of Paulownia trees may be found below: 4 . such as Chamomile (currently selling at $35/lb. climate and other natural factors.5 ac x 6 tons per acre = 45 tons x $120 = $5. or if they do. 8 and 12 tons per acre. Alfalfa water requirements for optimum yield are 6 acre-feet per year (6 cuttings to 8 cuttings equaling 12 tons per acre). Initial Set-up Cost Per Acre Water Cost (pumping cost) ($30 per acre foot x 6 acf x 10 ac = $1. Using alfalfa as a cover crop enriches and strengthens the topsoil.5 ac x 8 tons per acre = 60 tons x $130 = $7. other crops that are more light and heat sensitive can be planted in the cooler. feeding. protects it from erosion due to wind and rain. more shade protected environment created by the trees. Actual results of planting operations may vary substantially as a result of numerous factors. As the Paulownia canopy starts to develop in the third year. including land conditions. As the alfalfa is irrigated and the water soaks into the soil beneath.
Forestry: • Fast growing hardwood is light. such as hog. • Provides shade for homes starting the second summer. • Regenerate from the stump after harvesting. musical instruments. • Can reduce the spread of odors. moldings. • Hardwood is fire resistant and water repellent. • Peels 20% faster than conventional hardwood. or twist. poles. 5 . window frames. doors. • Animal fodder: Leaves contain 18–20% protein and are high in nitrogen. turkey. Food Source: • Leaves make a nice tea. does not warp. • Produces a beautiful lightly scented lavender bloom the third spring. • Kiln dries in 24–48 hrs. that lasts 6–8 weeks. and paper. • Makes great veneer and plywood. pulp. A mature tree will produce 85 lbs of dried fertilizer or animal fodder. air dries in 30–60 days. • Fast growing hardwood that is used for furniture. is the best fertilizer for the trees and in turn the leaves are an excellent food for the animals. • Intercropping for food staples and specialty crops. • Honey Production: Most of the honey from China comes from the Paulownia tree.Intercropping Food/Forest/Farming Paulownia Trees Primary Benefits For: Ornamental Use: • Fast growing hardwood tree that reaches approximately 10'–15' the first year. and chicken farms. • Excellent windbreak and screen • Increased return per acre • Waste from feed lots. crack. • Lightweight with excellent weight/strength ratio. and flowers are a beautiful addition to your salad. Waste Water Control: • Increased nitrogen uptake per acre • Erosion control • Waterway contamination can be significantly reduced. forestry trees grow 70'–80' in 10–15 years. • Ornamental trees grow 25'–30' in three years. • Excellent external an internal cladding for energy efficient homes. • Paulownia can be commercially harvested in five to seven years.
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