This study compares equivalent annual rents for two alternative land uses in a region where farming and timber plantations coexist. The comparison is motivated by the possibility that rising timber prices may stimulate timber processors to compete for farmland. Prices, costs, and market rents are assumed to first follow existing trends and then to reach steady state values. Market rents are projected and capitalized for agriculture. Internal soil rents are capitalized for timber. The results show timber to have a comparative advantage on high fertility sites and suggest that timber might become a competitive land use at the intensive margin of the region's farmland base.
