Sharply increasing timber prices in Minnesota reflect an imbalance in the ageclass distribution of the cover types that are most important to the forest industry. This paper examines the potential contributions that short-rotation forest crops grown on marginal agricultural lands can make in producing biomass for wood-base power plants and in supplying wood to the forest industry. A large-scale regional scheduling model was used to allocate forest and agricultural lands in order to minimize wood production costs for forest industry as well as power plant uses. Alternative potential sites for a wood-based power plant were examined in terms of wood production costs and of transportation implications. Preliminary recommendations as to the most appropriate agricultural lands and sites for power plants are made. The higher productivity of agricultural lands leads to reduced harvesting of forest lands. The associated indirect environmental benefits and the direct environmental benefits from putting agricultural lands under tree cover are the subject of additional research.