In 2020, the Kentucky forest sector remained regular to 2019 ranges and added an estimated $13.97 billion to the state’s financial system.
“Tree species variety inside our forests helps buffer the sector from unknown ecologic and financial impacts, which was actually necessary in 2020,” stated Jeff Stringer, chair of the College of Kentucky Division of Forestry and Pure Assets. “The financial influence of Kentucky forests is distributed throughout the state and contributes to the vitality of each city and rural economies.”
Kentucky’s forest sector is comprised of six sub-sectors: logging, major wooden manufacturing, secondary wooden manufacturing, pulp and paper, paper converters and wooden residue. The vast majority of the wooden utilized by these sectors comes from Kentucky forests, which comprise a number of the largest variety of tree species within the nation and are largely household owned.
UK School of Agriculture, Meals and Atmosphere forestry specialists estimate that every acre of harvested woodland contributes greater than $23,000 to the state’s financial system. Most of this quantity comes from value-added wooden merchandise produced by the secondary wooden trade, however every step within the provide chain from the landowner to the ultimate product provides to the acre’s complete financial influence.
“Nearly no wooden is wasted within the provide chain. Even wooden residues like sawdust, chips and bark, are offered or utilized in different industries,” Stringer stated.
As with many industries, the COVID-19 pandemic created provide chain points within the trade. As an important enterprise, forest and wooden manufacturing workers continued to function all through the pandemic.
The forest trade harvested an estimated 779 million board toes of hardwood in 2020, which is a decline of 11 million board toes in comparison with 2019. For most of the state’s wooden species, U.S. tariffs with China imposed since 2018 negatively impacted the export market throughout 2020, however because the 12 months progressed, export demand elevated as these tariffs lessened.
“Sluggish markets, COVID-related points and normal uncertainty made 2020 one other powerful 12 months for a lot of logging operations and sawmills,” Stringer stated. “If markets proceed to stabilize in 2021, there are indicators of enhancing circumstances and pricing traits.”
The state’s forests don’t produce the wooden species wanted for the development trade, which noticed dramatic worth swings all through 2020 and at instances, report lumber costs.
The demand for bourbon continues to supply a robust market for top of the range white oak logs. These logs are made into barrels for the distilling and wine industries. The export marketplace for used bourbon barrels continues to be robust. It was the state’s largest wood-related export in 2020 and accounted for $112 million.
Decrease high quality logs in all species declined in worth as pricing softened for hardwood railroad ties. Whereas costs dropped 13% in 2020 for top of the range black walnut logs, that are probably the most precious hardwood species, these stay at close to record-high costs.
The reopening of the paper mill in Wickliffe supplied an necessary increase to the pulp and paper trade.
“All through 2020, the mill ramped up manufacturing, and we’re seeing a resurgence in pulpwood demand in Western Kentucky. Because of this, that is offering alternatives and elevated revenues for landowners in that a part of the state,” Stringer stated.
New to this 12 months’s report is a breakdown of the sector’s financial influence by U.S. congressional district, which permits policymakers and the general public to see the sector’s influence on every of the state’s area. The whole report is offered on the UK Forestry and Pure Assets Extension web site https://forestry.ca.uky.edu/economic-report/.