Kentucky’s forest industries generate over $13 billion a year to the state’s economy and employ more than 59,000 Kentuckians. That includes over 2,500 Master Loggers who help Kentucky be the largest Southern producer of hardwood sawlogs and veneer.
Unfortunately, COVID-19 continues to impact this important sector of our economy, particularly loggers and log trucking. According to the Kentucky Center for Statistics, our state’s logging industry has weathered a 35% decline since the same time last year.
This hits small, family-owned logging businesses that typically employ four or five individuals especially hard. They have high operational costs and low margins. So even a few months of diminished production can have serious effects on solvency. These impacts are in addition to Chinese trade retaliation against wood products that had already slowed demand.
While many in the forest products industry have applied for and received assistance under the Paycheck Protection Program, payroll is a small part of total operating costs in logging and log hauling businesses. Fixed costs such as equipment notes and insurance as well as consumables such as fuel, oil, tires, hydraulic components and equipment repair costs often account for 75% or more of overall production costs. These fixed costs continue whether the business is producing or not.
That’s why we are calling on Congress to provide this sector some form of “bridge” relief. A low-interest loan, for example, could help our companies pay our monthly bills on equipment until logging and manufacturing levels stabilize. We are seeking parity with other agricultural commodity producers that have already received assistance in other stimulus funding packages.
The wood products industry is one of the top manufacturing industries in Kentucky, and without the logger and raw material supply the industry will come to a standstill. The Kentucky Forest Industries Association supports the wood industry and forestry interests throughout the commonwealth and urges the inclusion of logging in any future funding packages to prevent the shortage of the many products that are vital to the economic recovery including paper products, personal protective equipment and building materials.
Kentucky Forest Industries Association