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1

Assessment of Export Potential of Canadian White Spruce Saplings to the


United States

Lindsay Forbes
University of Guelph
AGR*1110*0104
Nov, 23, 2017
2

Table of Contents

Introduction..Pg 3

Part I -Product Information and Benefits to Canada


Product Description..Pg 3
Production Method....Pg 4
Inputs Pg 5
Requirements and Restrictions..Pg 7
Environmental Sustainability.Pg 8
Market Competition...Pg 9
Benefits to CanadaPg 12

Part II - Critical Analysis and Export Potential of Canadian White Spruce Saplings to the
United States
Marketing Strategy.Pg 14
Benefits to the United States..Pg 15
Environmental Benefits..Pg 16
Transportation Logistics ....Pg 16
Required DocumentationPg 17
Cost Analysis..Pg 17
Yield Evaluations and Recommendations ..Pg 19

ReferencesPg 21
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Introduction

This paper was prepared to examine the potential benefits of and market opportunities to

export White Spruce Saplings from Canada to the United States. These advantages and

production methods are outlined in detail in the two main sections. Specifically, a comprehensive

description of White Spruce trees is followed by a coherent investigation of its prospective

benefits to the United States. An analysis of possible production substitutes in global markets is

provided after these two sections. Lastly, the data outlined in this report is culminated into a

summary and rationalized as recommendations. These are directed to enhancing the

opportunities related to the exportation of Canadian White Spruce Saplings to the United States.

These opportunities have a substantial potential to be applicable to future Canadian exporters as

well as to countries facing increased yield losses due to soil erosion.

Part I - Product Information and benefits to Canada

Product Description

The Picea glauca (White Spruce) is a medium-sized to large evergreen coniferous tree in

the Pinaceae (Pine Family) that is widely distributed in the boreal and northern regions of North

America (Nienstaedt, Zasada, Barnes, Wagner, & Juday, 2004). This North American native tree

has a fairly broad, pyramid silhouette when young, but matures into a dense, 40-60 foot tall

column (Gilman & Watson, 1994). White spruce grows from sea level to about 1520 m (5,000 ft)

elevation, with a transcontinental range, from Newfoundland and Labrador west across Canada

along the northern limit of trees to Hudson Bay, Northwest Territories, and Yukon (Nienstaedt,

Zasada, Barnes, Wagner, & Juday, 2004). Given its wide ecological amplitude, White Spruce is
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excepted to harbour large amounts of genetic variation (Li, Beaulieu, & Bousquet, 1997). This

variation among White Spruce populations does not follow micro-geographical gradients (Li,

Beaulieu, & Bousquet, 1997). The distribution of this species is consistent throughout Canada

with potential planting range throughout the United States excluding the Southern most climates

(White Spruce, 2017). White spruce forests have significant value in maintaining soil stability

and watershed values. (White Spruce, 2017). The short, silver-green needles densely clothe the

upright branches, making it ideally suited to use as a windbreak (White Spruce, 2017).

Figure 1: Figure 2: Potential planting range for White


White Spruce grown to desired export height Spruce within the United States

Production Method

To efficiently produce White Spruce saplings , conditions must be met to ensure that the product

is being grown in areas that complement its optimum growth patterns. White spruce grows best

in well-drained, moist, silty loam and clay soils (McLallen, 2003). It can also grow on many

different soil types and can withstand flooding during the growing season (McLallen, 2003).

Seedling establishment is most successful in mineral soils and rarely occurs on deep organic
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layers (McLallen, 2003). A clear-cut patch of land should be no smaller than 0.5 hectares in size

(McLallen, 2003). This is large enough to

allow direct sunlight to warm the soil and

stimulate seed germination and seedling

growth (McLallen, 2003). Fields should be

prepared a year in advance of initial planting

and a soil test must be completed to determine

the fertility of the soil (Kessel & Llewellyn,

2015). Seed trees should be uniformly

distributed amongst intended planting area to

allow for optimum growth rates (McLallen,


Figure 3: Minimum soil fertility standards for planting
2003). Planting rates vary from 1200 to 2000

trees/hectare (McLallen, 2003). With proper maintenance, these trees are capable of the life span

ranging from 250-300 years (White Spruce, 2017).

Inputs

The inputs required to produce White Spruce trees, with the intention of exporting them

to establish protective shelter belts, include various production departments to ensure optimum

results. Nursery crop production requires highly technical and specialized production skills,

particularly with respect to propagation (White Spruce Management, 1999). New entrants can

learn from existing operations, as well as from published materials to assist in developing
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production processes (White Spruce Management, 1999). The amount and types of inputs

required to

maintain suitable

plant growth for

the White Spruce

saplings is

dependent on the

chosen type of

production. For

this exportation

evaluation, these

saplings will be

grown by field
Figure 4: Advantages and Disadvantages to Field and Container Production
production. Plants

commonly grown in the field consist of bare root seedlings, liners, shrubs, conifers and caliper

trees (shade and flowering trees) dug either as field-potted, ball and burlap (B&B) or wire basket

(WB) (Kessel & Llewellyn, 2015).

The equipment required for nursery operations include; irrigation equipment, field

equipment such as tractors, trailers and cropping equipment, sprayers for control of weeds,

insects and diseases (White Spruce Management, 1999). Irrigation practices have an effect on

plant growth and timing (White Spruce Management, 1999). Plants require an adequate supply

of water at all stages of growth. Factors such as type of crop (container or field crop), stage of
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development, temperature, sunlight, air movement, soil or media, and drainage all influence the

water requirements for nursery crops (White Spruce Management, 1999).

Most equipment and machinery from existing farm operations can be easily adapted to

field and container growing operations (Kessel & Llewellyn, 2015). Depending on specific

production needs, some additional equipment may be required such as bed diggers, U-blades (for

digging and root pruning), tree spades, transplanters and potting machines (Kessel & Llewellyn,

2015). Fertilization is a critical element is nursery crop production (White Spruce Management,

1999). For the saplings, growers must determine their desired growth rates and how the fertilizer

formulations will be adjusted at each stage of development (White Spruce Management, 1999).

Requirements and Restrictions

While initial capital investment may be lower than container production, the annual

investment in supplies and land during the production cycle does not necessarily mean that field

production is cheaper than container growing (Kessel &Llewellyn, 2015). Field production has a

higher demand for labour in the spring and fall since planting and harvesting must be done in a

relatively short time (Kessel & Llewellyn, 2015). The White Spruce market has been strongly

dependent on seasonality, especially due to their popularity as a Christmas tree species. The

marketing and harvesting seasons are strongly intertwined with the uncontrollable weather

patterns associated with the increase climate change rates (Kessel & Llewellyn, 2015).

The lack on control over environmental factors for the marketing and harvesting season

prompts the need for an increased labour force during specific times of the year, suggesting that

the need for part-time employment in specific areas of the industry is necessary. Due to the
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increased duration to produce a single unit of this potential export product, it is difficult to

determine the market conditions during the market and harvest season (White Spruce

Management, 2017).

Producers must be aware of the consumer demographics and trends for purchasing

nursery stock, production requirements for producing the desired product, and production costs

in comparison to their profit margins (White Spruce Management, 2017). Tree nursery operators

also need to monitor ongoing regulatory issues such as; changes in pesticide legislations, changes

to plant breeders rights, changes to municipal taxation and changes to trade regulations that may

restrict exports of nursery crops or increase competition (Commercial Tree Nursery Industry,

2017). The saplings are harvested during the colder season to ensure their dormant state, the state

in which photosynthesis production is limited due to reduced resources (Heron,1986). Ideal

storage conditions for the harvested saplings can be found in refrigerated units that range from

33-35 degrees Fahrenheit, with 95 percent relative humidity (Heron, 1986). Fall lifted dormant

hardwoods can be successfully stored over winter for up to eight months (Heron, 1986).

Environmental Sustainability

Soil fertility, soil moisture, and physical properties are interrelated (Nienstaedt & Zasada,

2004). Moisture alone will not improve yields unless it is associated with increased fertility

(Nienstaedt & Zasada, 2004). White spruce stand development can significantly affect forest

floor composition and biomass and mineral soil physical and chemical properties (Nienstaedt &

Zasada, 2004). The magnitude of these effects will vary with site conditions and disturbance

history of the site (Nienstaedt & Zasada, 2004). Acidity of the mineral soil in spruce plantations
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established on abandoned farmland in Ontario decreased by 1.2 pH units over a 46-year period

(Nienstaedt & Zasada, 2004).

Market Competition

Table 1: Analysis of Potential Product Substitutes for Shelter-belt Implementation

Species of Tree Description Range Growth and Tolerance

Black Spruce Short dark bluish-green -Transcontinental -Between 20-30 metres


needles, which are blunt species (Black Spruce, tall, between 23-26
on the end. When 2017) centimetres in diameter
grown on high and dry (Black Spruce, 2016)

ground, black spruce -Tolerates dierent


trees are taller and moisture levels and
thicker. When it grows in partial shade (Black
wetlands, the tree is Spruce, 2016)

much smaller. Trees -Grows in a variety of


grown in wetlands can soils (Black Spruce,
reach 200 years of age. 2016)

(Black Spruce, 2017) -The Black Spruce is an


adaptable tree that
grows in a variety of
soils, moisture levels
and light conditions
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Species of Tree Description Range Growth and Tolerance

Eastern Hemlock Its shape is conical, with -Distributed throughout -Reach heights of
a wide trunk that tapers Southern Ontario approximately 30
into a thin top (Eastern (Eastern Hemlock, metres (Eastern
Hemlock, 2017) 2017)
Hemlock, 2017)

-Skinny flexible -Potential planting -Prefers moist and cool


branches grow straight range across northern areas and grows in a
out from the trunk and parts of the United range of dierent soil
then droop at the ends States (Eastern types (Eastern
(Eastern Hemlock, Hemlock, 2017) Hemlock, 2017)

2017) -Very shade tolerant


-The eastern hemlocks (Eastern Hemlock,
bark is scaly when the 2017)

tree is young and cracks -


deeply as the tree gets
older (Eastern Hemlock,
2017)
-Its needles are 1 to 2
centimetres long and
are shiny green on top
and paler underneath
(Eastern Hemlock,
2017)
-The cones of the
eastern hemlock are
oval shaped, and are 12
to 20 millimetres long
(Eastern Hemlock,
2017)
-In the late fall and
winter, the seeds fall out
of the cones and onto
the ground (Eastern
Hemlock, 2017)
-Potential life span of
600 years (Eastern
Hemlock, 2017)
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Species of Tree Description Range Growth and Tolerance

Red Pine -The red pine can grow -Distributed across -Reach heights of
to be 35 metres tall, with most of Ontario, from approximately 20-30
a trunk 75 centimetres Lake Nipigon across to metres, with diameters
in diameter (Red Pine, Quebec, and South to ranging between 30-75
2017) the Great Lakes centimetres (Red Pine,
-Its shiny dark green 2017)

needles grow in -Tolerant to a variety of


bunches of two and are moisture levels (Red
between 10 and 16 Pine, 2017)

centimetres long (Red -Prefers full sun and


Pine, 2017) can tolerate poor, rocky
-Wood from the red pine and sandy soils (Red
has been used to make Pine, 2017)

poles and pilings and as -Not tolerant of air


structural timber pollution and salt
because of its strength damage ( Red Pine,
(Red Pine, 2017) 2017)
-Deep and widespread
root structure, able to
withstand blow down
(Red Pine, 2017)

White Spruce -The white spruce Distributed throughout -Reach heights of


usually grows to be 24 Canada, approximately 24
metres tall, but under transcontinental meters with a diameter
ideal conditions can planting range (White of 60 centimetres (White
grow to more than 30 Spruce, 2017)
Spruce, 2017)

metres tall (White -Potential planting -Can survive in a


Spruce, 2017)
range throughout most diverse range of soils
-It usually lives between of the United States and moistures (White
250 and 350 years, but (White Spruce, 2017) Spruce, 2017)

trees up to 1,000 years


have been seen (White
Spruce, 2017)

-Its needles are about 2


centimetres long and
bluish green or green in
colour, with a whitish
powdery, waxy layer
(White Spruce, 2017)

-Cones from the white


spruce are 5 to 7
centimetres long and
are light brown (White
Spruce, 2017)
12

In reference to Table 1, the White Spruce is as strong candidate for the exportation

purpose due to its extended potential planting range. Although there are many species of trees

native to Canada, the White Spruce has the most resilient and adaptable planting specifications.

Benefits to Canada

The exportation of White Spruce Saplings would allow for increased infrastructure within

the agroforestry sector. The nursery/landscape business has experienced an 8.7 per cent growth

over the past 10 years (Commercial Tree Nursery Industry, 1999). This continuous growth within

the market for nursery saplings identifies the constant and increasing demand for this product in

various sectors of Canada.

Traditionally the resource sectors (agriculture, fishing, forestry, mining and energy) have

employed a relatively large share of the rural work force (Bollman, 1986). In recent decades the

resource sector has shifted from primary commodity production to manufacturing and then to the

service sector (Bollman, 2010). Similar to the patterns in other sectors, employment in resource

sectors has become more knowledge intensive (Bollman, 2010). Thus, there is a need for

technical training which is not always available in the rural areas (Bollman, 2010). The proposed

targets for these start up nurseries are Harrow, Ontario and Alvinston, Ontario. These rural

communities operate close to the United States Boarder, allowing for decreased transportation

requirements and costs. The rural communities also posses the land necessary to create the scale

of nursery required for exportation purposes.


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The development of these nurseries within the rural communities of Canada would allow

for increased job opportunities in varying fields of skill sets. Due to the lack of availability of

training in rural communities in the manufacturing industry, the placement of these nurseries

would aid in supporting the local infrastructure. Establishing a nursery requires construction of

various structures to support sapling growth, along with continuous land and plant maintenance

during the growth cycle (Robbins, 2015). The establishment of these nurseries would also aid in

combating the increased soil erosion rates currently occurring amongst Canadian crop land. By

implementing the practises associated with the Shelter belt program, Canadian farmers would

have an economically stable and lasting management practise integrated into their operations.
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Part II - Critical Analysis and Export Potential of Canadian White Spruce Saplings to the
United States

Marketing Strategy
Erosion Occurs in all areas of the United States, but is more concentrated where the

percentage of total area in cropland is the highest (Magleby, Sandretto, Crosswhite, Osborn,

1995). Susceptibility to erosion is the main limitation on more than half the nations cropland

(Magleby, Sandretto, Crosswhite, Osborn, 1995). Currently the United States is loosing soil 10

times faster than the natural replenishment rate (Lang, 2006). The vast majority- 99.7%- of

human food comes from cropland, which is shrinking globally by more than 10 million hectares

a year due to soil erosion (Lang, 2006). The economic impact of soil erosion in the United States

costs the nation approximately $37.6 Billion annually in productivity losses (Lang, 2006).

These figures identify that the United States requires a solution to aid in the reduction of

soil erosion across

the nation. By

directly marketing

the benefits

associated with

implementing White

Spruce shelter belts

to current

agricultural

practises, the Figure 5: Arable Land per Capita Reduction


15

operators would be able to efficiently address any uncertainties they may posses. This would

allow the operators to become better associated with the management requirements, potential

issues, and develop a comprehensive understanding of the product.

Benefits to the United States

The implementation of White Spruce Saplings into shelter belt practises across the United

States have the ability to greatly impact soil erosion as well as improving crop yields and

environments. Crop yield increases in fields adjacent to shelter belts have been documented in

multiple studies (Benefits of Agroforestry ,2014). These increases occur because of improved

microclimates and better snow (moisture) retention, reduced wind speeds and thus reduced wind

erosion and damage to crops (Benefits of Agroforestry, 2014). Studies conducted across Canada

and the United States indicate that fields protected by mature shelter belts develop an average

yield increase of three and a half precent for wheat and up to six and a half precent for alfalfa

(Benefits of Agroforestry, 2014). These figures include land taken out of production for shelter

belt establishment and the competition of the shelter belt with the crop, two factors which can

partially offset gains in yield (Benefits of Agroforestry, 2014). Generally, tall, long-lived trees

planted in rows perpendicular to prevailing winds combined with narrow fields can be expected

to provide the greatest yield increases (Agriculture and Agri-food Canada, 2014). Shelter belt

practices are designed to establish a strong foundation to control soil erosion caused by wind and

reduced root structure with optimum effectiveness (Agriculture and Agri-food Canada, 2014).
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Environmental Benefits

The development of this product, along side the exportation value associated with the

environmental sustainability, harbour increased potential in sequestering climate change and self

sustainability. This non-competitive species of tree has a life expectancy of 250-330 years with

proper maintenance and recourse availability (White Spruce, 2017). In addition to the extended

life span, White Spruce trees are able to capture 143kg of Carbon annually (Benefits of

Agroforestry, 2014). These figures don't include the amount of carbon that will become

sequestered in the trees roots, which may equal roughly 50 to 75 per cent of these amounts

(Benefits of Agroforestry, 2014). These figures do not include the carbon stored in the roots,

which may be equal to 50 to 75 per cent of the carbon stored above ground (Benefits of

Agroforestry, 2014). White Spruce trees do have a longer time requirement to reach maturity, but

due to this longevity, these trees are able to act as carbon sinks for longer periods of time

(Agriculture and Agri-food Canada, 2014).

Transportation Logistics

The same principles of sapling care during storage apply to transporting the saplings

(Heron, 1986). The saplings should be protected form heat and drying (Heron, 1986). The

saplings should be moved as quickly as possible post harvesting the intact root system (Heron,

1986). The root systems should be wrapped in burlap to allow oxygen flow and enclosed within

wire cages to ensure root structure (White Spruce Management, 2017). Flat bed trucks are the

most effective way to transport the harvested saplings (Transporting Trees to the Landscape,

2015). This allows the trees to remain in an upright position, maintaining truck structure and
17

health (Transporting Trees to the Landscape, 2015). The trees should be secured to the truck so

they do not roll around during transport (Transplanting, 2015). Rolling or increased movement

during shipping can crack the root ball and break roots (Transplanting, 2015).

Required Documentation

In order to export the White Spruce saplings to the United States, appropriate

documentation must be secured in order to assure the health and safety of the product. The

CNCP is a phytosanitary certification program for Canadian nurseries and greenhouses that ship

nursery stock to the United States (U.S.) or to other Certified Facilities (CF) within Canada

(Horticulture Exports, 2016). The CNCP uses a Phytosanitary Management System (PSMS) to

minimize pest risks so that plants consistently meet U.S. import requirements (Horticulture

Exports, 2016). This documentation assures the importing country of the quality of the product.

It also assures the consumers that the product has passed safety standards, allowing for reliability

on the product to preform its intended task.

Cost Analysis

Production planning should be based on planting sufficient trees each year to sustain

target sales and revenues (Tree Nursery Establishment, 2004). White Spruce trees will require 15

acres with 1 acre (600) trees planted each year (Tree Nursery Establishment, 2004). Saplings

grow for 5 years and are then harvested and marketed at various sizes for the next 6 years (Tree

Nursery Establishment, 2004). This growth period requires continuous labour, property, plant,

and equipment costs and capital investments.


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Figure 6: Projected Capital Investments for Nurseries

Figure 7: Projected Cost Analysis for Nursery Equipment

Figure 8: Projected Cash Flow Statement for Initial 6 years of Establishment


19

In regards to the projected Equipment Cost Analysis in Figure 7, the purchasing of

transportation equipment would significantly reduce costs for export transit of the saplings.

Although the growth period for marketable saplings is substantial in terms of fluctuating market

signals, the proposed exporting plan would allow for bulk purchasing in a single interval. The

exporting plan would be to sell directly to the consumers to promote the implementation of the

shelter belts throughout their operations. The shelter belt would require several saplings planted

over equal increments bordering the perimeter of the fields. These dense rows allow for

increased protection of prevailing winds and snow cover (Benefits of Agroforestry, 2014). With

the intention of bulk ordering from multiple buyers, the initial capital investments would quickly

gain returns and ensure revenue for the Canadian exporters.

Yield Evaluations and Recommendations

When implementing this export plan, it is recommended that consumers record yield

evaluations prior to and post the addition of the shelter belt. The documentation of these reports

allows for consumer to see first hand the significant

results of this program. In areas of increased soil loss

and crop land production, these figures are extremely

important in terms of soil reserves. The establishment

of this exported product allows for increased soil

erosion management. These methods also have the Figure 9: Topsoil Loss in the United States

potential to be implemented into various countries

experiencing identical losses. It is also recommended that after reviewing the results from the
20

first year of crop yields, in relation to the

adapted shelter belt practises, that the

consumers implement the practise into their

remaining crop operations. This would allow

for uniform yields throughout various regions

across the United States.

Figure 10: Crop Land Intensity in the United States


21

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Figure References

Figure 1: http://www.thetreecentre.com/white-spruce/

Figure 2: hort.ufl.edu/database/documents/pdf/tree_fact_sheet/picglaa.pdf

Figure 3: http://www.na.fs.fed.us/spfo/pubs/silvics_manual/volume_1/picea/glauca.htm

Figure 4: www.omafra.gov.ab.ca/english/crops/facts/info_newgrowers.htm#site

Figure 5: http://www.businessinsider.com/chart-of-the-day-arable-land-per-capita-2011-2

Figure 6: www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/agdex8433

Figure 7: www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/agdex8433

Figure 8: www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/agdex8433

Figure 9: http://www.seafriends.org.nz/enviro/soil/erosion1.htm

Figure 10: http://www.pintrest.se/pin/633387417110276/

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